Regulatory frameworks and MaaS developments in Finland and Norway

VTT and TØI have investigated the role the regulatory frameworks have played in the Mobility as a Service (MaaS) developments in Finland and Norway in the REGSMART project.

Emerging technologies and services, often bundled within “smart mobility”, represent a new transformation of the mobility system, which has the potential to disrupt existing transport markets entirely. Existing legal and regulatory frameworks in Europe do not seem well prepared for accommodating new and innovative services while considering the sustainability of the transport system. It is therefore critical to gain more knowledge on how new smart mobility services should be governed. In the Regulating smart mobility (REGSMART) project, VTT and TØI investigated the role the regulatory frameworks played in the Mobility as a Service (MaaS) developments in Finland and Norway. We focused on two different MaaS initiatives as cases of our study: the privately owned Whim in Helsinki, Finland, and the public transport authority (PTA) Kolumbus in Stavanger, Norway.

The regulatory settings for smart mobility services are quite different in Finland and Norway.  In Finland, The Act on Transport Services (2018/2019) provides a harmonised regulation across modes and focuses on data sharing and interoperability of different systems. The Act promotes free competition and aims at lowering the threshold for transport market entry. Norway has a traditional approach with sectoral acts for e.g. railways, vocational transport, and supplementary regulations. Rail and scheduled public transport have data sharing obligations to the national travel information agency Entur.

Inspired by Docherty et al. (2018), the developments in the two countries were reflected against the elements and challenges of the smart mobility transition with the following results:

The short-term versus the long-term game

The tension between the short-run benefit of supporting new services versus the longer run sustainability targets is recognizable in MaaS initiatives, but the relation is not straightforward, since it is still unclear how MaaS influences the provision of physical transport services as such. Most recognized externalities from transport systems are related to physical services (pollution, congestion, etc.), not the aggregation of these services, or which actor is the MaaS operator. However, there are many potential cases where this assumption is challengeable. This can be if the MaaS operator has clear commercial incentives to favour one mode over another, or on a general note if the MaaS operator’s incentives do not align with the wider objectives of society.

Data as a critical asset to control and gain power over the mobility marketplace

Lacking standards, insufficient interoperability of the individual systems, data and interfaces have been technical challenges faced by both the public actors and businesses in the Finnish case. The service providers often want to host the customer interface and get valuable activity information. For future Maas developments, it is critical for different organisations and public authorities to collaborate as bodies overseeing transitions by communicating and supervising the requirements and market situations.

Business models, equity and inclusion

The MaaS market entrants have been predominantly private companies in Finland and publicly owned PTAs in Norway. Privately owned MaaS may benefit from easier access to private high-tech resources, may have an easier job in integrating new services, and less of a challenge related to existing service provision.

The PTA-led approach seems to reduce the scope for private initiatives when they are allowed to enter the MaaS market due to public funding and an established customer base. In the past few years, the development of the Norwegian frontrunner PTAs to become full-scale providers of MaaS has been fast in comparison to other PTAs internationally, but slow compared to IT businesses. Both of the approaches share challenges related to the increasing need for digital competence in the population and equity in terms of regional and socio-economic accessibility.

Conclusions

A transferable lesson from the two cases is that both privately owned and publicly owned MaaS operators may provide successful MaaS. However, neither can overcome all the challenges and regulatory frameworks do have an impact on the dynamics of the smart mobility market. The Finnish regulatory framework is very friendly for new market entrants, but may have long-term challenges in keeping the objectives of the MaaS operators and society aligned. The Norwegian regulatory framework is less open to innovations due to the strong market position of the PTAs limiting the scale and scope of alternative offers. On the other hand, it may well solve the problem of aligning the objectives of operators and society.

References

Docherty, I., Marsden, B., Anable, J., 2018. The governance of smart mobility, Transportation Research Part A. http://dx.doi.org/10.1016/j.tra.2017.09.012  

Ydersbond, I.M., Auvinen, H., Tuominen, A., Fearnley, N., Aarhaug, J., 2020. Nordic Experiences with Smart Mobility, Transportation Research Procedia, Vol 49, pp. 130-144, https://doi.org/10.1016/j.trpro.2020.09.012

Text: Anu Tuominen, VTT and Nils Fearnley & Margrete Ydersbond, TØI.

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