Mobility-as-a-Service (MaaS) and Demand Responsive Transport (DRT) in North America versus Europe

By Ph.D. Eric Bruun, Senior Researcher, Kyyti Group 

Our largest group of prospective customers in North America are public agencies. Like all companies in our field, naturally we keep an eye out for Requests for Proposals (RFPs) and similar requests for qualifications, but we do not sit around and wait for those. We actively build relationships with stakeholders by utilizing our existing relationships and long-time contacts in the US transportation sector, through our work with the MOD Alliance, and at trade shows. In fact, we will be attending LA CoMotion on 14.-15.11., so please drop by our booth N28 for a chat or a demo. But what is it like being a European company seeking to do implementations in North America? There  are a couple of things that come to mind.

In the USA it is quite common that one must have a US mailing address to even download an RFP, to speak nothing of the requirements about a local presence needed to participate. Fortunately, we have a close strategic partner DemandTrans Solutions, Chicago based veteran of the DRT field with operations across the US. I wonder how many other European companies  have been dissuaded from applying since they don’t have such a partner. 

Another difference has to do with the operating labor costs in the transportation sector. We are finding that the differences between US agencies can be huge. Generally speaking, the bigger city agencies have very generous salaries and very high benefit costs due to giving Nordic health benefits at US price levels. There is little latitude for negotiation for operating smaller vehicles. This makes filling the gap between the 40 foot (12 meter) bus and the single party taxi impractical to fill in-house. An agency can’t justify almost the same expenditure for a lower productivity smaller bus. So smaller city agencies and those who plan to use a private operator for new DRT tend to be more active. Furthermore, without such gap-fillers in place, MaaS seems much less useful. Indeed, scholars who reviewed the Kutsuplus experiment in the Helsinki region noted that elected officials said that something like Kutsuplus would need to be reinstated if the local transport planning agency decides to host a MaaS platform. 

Another sector which seems to be moving faster in Europe are the private taxi companies. Our experience in Finland shows that they can up their game against Uber and Lyft that have currently enjoy a significant advantage from the largess of their company’s investors. To compete, they use fully accessible 10+ vehicles without subsidies of their own. They can use differential pricing so that lucrative trips to the airport offset less lucrative shared trips that are charged at a lower rate.

If they can show reliable operations, they may even be able to receive contracts from public agencies for subsidized operations. This would give them a financially stabilizing base. They could prove to be very cost-effective in replacing large buses at night, serving outlying less dense areas, and other tasks not suited to fixed routes. We shall see in the next few years if taxis that can operate in a variety of DRT “flavors” catches on and expands in a big way.   

The one area where there seems to be strong similarities between Europe and North America is the rural transport with no larger cities nearby. This is a difficult situation as there is no strong base of many-to-one demand with perhaps only a small base of demand to the nearest town. This has created big expenses for the medical system, for schools, elderly who can no longer drive and for parents who spend time shuttling children (soccer moms, in US parlance). Many vehicles are often running to and from without coordination of trips that could be pooled, to everyone’s benefit. MaaS apps could be highly useful, especially combined with scheduling cooperation. For example Kela, the public medical agency of Finland, schedules trips to regional medical centers on a corridor basis from one day to the next when possible to make schedules more efficient for taxi dispatchers. In the US we see substantial use of volunteer drivers to fill gaps. In most countries, substantial work remains to be done to remove obstacles to combining funds and riders in order for creative solutions to be tested and refined. The important point is that technology is no longer an impediment, and this message needs to be reinforced. I try hard to let our potential clients know whenever there is the opportunity. This will be a tremendous growth area for the industry, from Lapland to Portugal, from the Central Valley in California to the Maritime Provinces in Canada. 

I am always interested to hear and discuss what has been tried in the MaaS and DRT sectors, so please don’t hesitate to come by booth N28 at LA CoMotion to meet the Kyyti team and the DRT experts from DemantTrans Solutions. You can also always contact me via email at [email protected].

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