A $500 investment in transport set a young Andrew Carnegie on the way to becoming the world’s richest man. It was the mid 19th century, and railways and steel helped create his $310 billion fortune – more than that of Bill Gates, Warren Buffet, Carlos Slim and Mark Zuckerberg combined.
That was then. What about today? Could exciting new developments in today’s transport industry create fresh investment opportunities on a similar scale?
Mobility in our hands
In Finland’s capital Helsinki, an exciting pilot is underway. Whim, described as being “the world’s first all-inclusive mobility service”, is looking to transform urban travel by “taking care of everything”. The app offers users access to every single type of transport – bus, taxi, train, bike, car and, in the future, autonomous vehicle –calculates the best routes to take, and manages your tickets and payments. Its name says it all: Mobility as a Service (MaaS)
The concept of MaaS, along with many other clever digital-led services – from traffic apps Citymapper and Waze, to ride-share platform Uber and car club Zipcar – are creating a modern transport revolution.
The concept of MaaS is creating a modern transport revolution
Combined with population growth in our cities, the search for new energy sources and consumer demand, new transport solutions are helping uncover new investment possibilities not seen since Carnegie’s day.
New travel, new investment
Catapult Transport Systems, a UK technology and innovation centre, suggests as new businesses grow and enter into partnerships, the global intelligent mobility market could soar from £140 billion a year today, to over £900 billion by 2025.
That’s roughly the same size as Norway’s entire Sovereign Wealth Fund.
Data is key to making MaaS a reality
Andrew Everett, chief strategy officer at Catapult Transport Systems, says: “Data is key [to making MaaS a reality]: how to utilise data and managing it to make it valuable. It’s a small market now but the growth rate is going to be significant.”
Everett sees the main obstacles to MaaS as: “Sharing data that might be commercially sensitive, and sharing vehicles. People think nothing of standing in a packed tube [but] they’re less keen on sharing a taxi with a stranger.
“They might need time to realise that by allowing other things to make decisions for us, they get quality and service.”
Many players, countless opportunities
Sampo Hietanen, CEO of Maas Global, developers of the Whim app, believes there’ll be many players, partnerships and investment opportunities in future transport.
“I don’t think anyone is big enough to do a complete ‘mobility with service’ promise and offer their own transportation services. That’s too costly,” he says. “So there’ll be many partnerships.”
Susan Shaheen, a co-director of the Institute of Transportation Studies’ Transportation Sustainability Research Center at the University of California, Berkeley, agrees that specialist tech businesses will forge partnerships with today’s transport giants.
“When airlines first enabled online booking and reservations, you couldn’t compare prices, routes, or pair flight legs from multiple carriers,” she explains.
“However, the airlines realised they could better manage demand and reduce excess capacity by enabling this type of functionality. A similar evolution could occur with MaaS providers, with increased support for open data, data sharing, and interoperability.”
Investing in the future
Could investing in intelligent mobility and transport providers now deliver significant returns?
“The implications are huge,” says transport consultant Dr George Hazel, smart mobility advisor to Scottish Enterprise.
“Emerging companies with clever bits of kits, software and hardware that fit [into the] Mobility as a Service [concept] are a great investment: they are small and will grow rapidly given their product.
“For investors, there’s a lot of potential.”