Startups can Replace Car Dealers
2023.01.08 02:16
Startups can Replace Car Dealers
Budrigannews.com – People who live in cities are accustomed to switching between apps when deciding which mode of transportation is best for getting from point A to point B. What about a city bike or a taxi? Which provider offers the e-scooter closest to you?
It can be time-consuming and inconvenient. Consequently, the Finnish startup MaaS Global decided to combine all of these services into a single app known as Whim. Taxis, buses, bikes, e-scooters, and rental cars are all accessible to users in more than ten European and Asian cities.
According to CEO Sampo Hietanen, who speaks with CNN Business, “Whim’s sole purpose is to compete against car ownership.”
The International Energy Agency says that transportation is responsible for 24% of global CO2 emissions related to energy, most of which come from passenger cars. According to Hietanen, the environmental impact could be enormous if Whim can convince users to exchange their car keys for a single app that provides multiple transportation options.
He acknowledges that this is challenging. Whim must be more cost-effective and convenient than owning a car in order to succeed. According to Hietanen, “the car represents freedom of mobility”—even if a city dweller barely uses it, they still park it outside as “freedom insurance.”
A pay-as-you-go option and a 30-day season ticket for unlimited public transportation and short taxi rides cost €62 ($73) in Helsinki, where the app is most well-known. Users can select from multiple service levels. Additionally, the ticket offers day rental of a car for €55 ($65).
While driving alternatives are well-developed in Helsinki, this is not the case everywhere. According to Maria Kamargianni, associate professor of transport and energy at University College London, it will be challenging to persuade individuals to give up their automobiles in a city that “does not have a wide public transport system or a lot of rental cars or taxis in place.”
She adds that the availability of alternative modes of transportation is likely to increase as the market matures, and that apps like Whim are the first step in luring people away from car ownership. The global mobility service market, according to MarketsandMarkets, will increase from $4.7 billion in 2020 to $70.4 billion by 2030.
Citymapper, which introduced a travel pass for Londoners in 2019, and Moovit, which introduced an all-in-one mobility app in Israel last year, are two additional providers.
One of the earliest providers, Whim was founded in 2016 and has raised more than $60 million from investors like BP (MBFJF) and Toyota Financial Services. Since its launch, it has been used on 18 million trips worldwide and is available in several European cities as well as Tokyo.
However, according to Hietanen, the company has been affected by the Covid-19 pandemic; Revenues are lower as fewer people travel, preventing the company from expanding into additional cities.
According to a recent report in the Finnish newspaper Helsingin Sanomat, the company had invested €50 million (59 million dollars) in unsuccessful expansion projects. According to Hietanen, the funds were used to integrate multiple transportation providers, establish market readiness in a number of nations, and develop the app’s intricate technology.
He says, “We’ve known from the beginning that the investment required to create this would be substantial,” and the company has recently secured additional funding.
Hietanen is confident that there will be demand for the product even though the industry is still in its infancy. According to a recent report from the International Transport Forum (ITF), mobility services will be essential for meeting the requirements of a rapidly expanding global population and urbanization. However, “people must choose it over other travel options,” such as private motor vehicles, for growth to occur.
Hietanen asserts that this is already taking place. A survey conducted by the company in Helsinki found that 12 percent of its users claimed that Whim had led them to sell their cars. He states, “People want the freedom of being able to go anywhere, anytime, but they still want the more sustainable solution.”
