The emergence of disruptive business models is gradually transforming the mobility sector. Traditionally, Original Equipment Manufacturers (OEMs) have been primarily focused on manufacturing and sale of vehicles, however, the rise of these multi-modal mobility solutions is exposing new business opportunities for OEMs.

Based on these different multi-modal mobility solutions, OEMs are developing new strategies to tap in the opportunities unfolded by as-a-Service business models. For instance, European car-sharing market is estimated to witness 75,000 to 100,000 cars on its road by 2020. And to take the benefit from this growing car-sharing market of the continent, German based Daimler and BMW are offering Car-as-a-Service (CaaS) with Car2Go and DriveNow, respectively.

Besides CaaS, there are other as-a-Service models which are responsible for the paradigm shift of mobility sector. Such business models are Mobility-as-a-Service, Software-as-a-Service, Hardware-as-a-Service, etc.

Mobility-as-a-Service (MaaS): It is almost a complete package with connected and personalized service contents. As per requirement, it offers mobility solutions to both—travelers and goods. The public and private conveyance providers enable MaaS through single channel which creates and manages trips for beneficiaries.

Software-as-a-Service (SaaS): This model is extensively used by mobility sector at present. Generally, a third party is involved in providing applications like cloud services, creating telematics platform, etc. for OEMs. This is likely to reduce IT operating costs for the OEMs significantly as third-party bears expenses related to hardware acquisition, licensing of software, maintenance, installation, etc.

Hardware-as-a-Service (HaaS): The OEMs normally use this model for testing equipment for vehicles. Tire-as-a-Service and Battery-as-a-Service are some its examples. Normally, Managed Service Providers install hardware in customers’ (OEMs) site and responsibilities of both parties—beneficiaries and service providers—are defined according to service level agreement.

Car-as-a-Service (CaaS): Probably, it is the most popular as-a-Service model which disrupted urban mobility. The increasing penetration of internet and proliferation of smart devices are enabling people with easy availability of this service. It (CaaS) ensures personalized experience for beneficiaries.

The evolving as-a-Service models are enormously triggering the growth of shared mobility. These disruptive models are expected to dent the growth rate of traditional car sales in mid and long term. Whereas, as-a-Service models are predicted to generate over US $1.3 trillion revenue for mobility sector by the end of 2030.


Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at subarna.poudel@frost.com


Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830