Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market

Sergio Guidon, Michael Wicki, Thomas Bernauer and Kay Axhausen investigated consumer preferences of service bundling in the passenger transportation market (“Mobility as a Service” bundles). The results were presented at the Swiss Mobility Arena by the ISTP researcher Sergio Guidon. Their research was published in Transportation Research Part A: Policy and Practice.

Mobility as a Service (MaaS)

Novel approaches to service bundling in the passenger transportation market are enabled by technology driven innovations and give rise to so called Mobility as a Service (MaaS) concepts. These approaches promise to increase the accessibility of existing public transportation services, possibly decrease car ownership rates and lower the environmental burden of the transportation system. However, the potential effects of comprehensive service bundles in the passenger transportation market are still largely unclear.

In a competitive market, the potential success of MaaS bundles follows consumer valuation of the bundles as compared to valuation of stand-alone services. Thus, the difference between the bundle and sum-of-parts willingness to pay (WTP) is an indicator for the valuation of the bundling itself (which includes service integration valuation) and effects the competitiveness of the service bundles. In this study, several discrete choice experiments were conducted to indirectly estimate consumers' WTP for stand-alone transportation services and service bundles.

The results indicate that public transportation, car sharing, and park and ride services are valuated significantly higher when offered in a bundle instead of as a stand-alone service. Bicycle-sharing, electrical bicycle (e-bike) sharing and taxi services are valuated lower. Potential consumers also exhibit a high WTP for a smartphone application that integrates the services and manages ticketing and payment.

Consequently, subscription-based pure bundles for all transportation modes may not be the optimal strategy for mobility providers. Instead, it may be better to bundle public transportation with car sharing and park and ride to exploit the higher WTP and offer (electric) bicycle-sharing and taxi services on a pay-per-use basis. In this way, profitability of a public transportation system could be increased.

For more information regarding the Swiss Mobility Arena Conference, please visit the external page Swiss Mobility Arena homepage.

For more information and the full article, please visit the external page Transportation Research Part A: Policy and Practice Journal homepage.

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