Investors on board for evolution of transport
Fund manager Nathan Field has never ridden a Lime scooter to work, but the company and other ‘‘mobility as a service’’ businesses are among his favoured investments.
Field runs Kiwi Wealth’s Global Thematic Fund, and the transformation in the way city dwellers get around is among the most promising of investment themes.
The fund is heavily invested in companies transforming traditional industries, including Amazon and Netflix, but the growth in mobility-as-a-service, or MaaS as fund managers dub it, is among the next of the next big things.
‘‘It’s a broad term that encompasses everything from ride-hailing apps and robotaxis to e-bikes and those headlinehogging Lime scooters,’’ Field said.
‘‘But at the heart of these modern transport solutions is a central idea: owning and driving a car is becoming increasingly impractical and uneconomic in major urban centres around the world.’’
Field is looking to move into Auckland from Matakana, where he currently lives, and said he was likely to ditch one of the two family cars, and get to work using a portfolio of transport options, all owned by other people.
‘‘The UN estimates that two-thirds of the global population will live in megacities (cities with more than ten million people) by 2050. This creates two major headaches for policymakers: the lost productivity associated with traffic congestion, and the negative impact on pollution levels and air quality.’’
Individually-owned cars are not only costly, but they will increasingly not be an option for city-dwellers.
‘‘China has already acted on this front, controlling vehicle numbers in cities through a lottery system for licence plates. In Beijing, the odds of a new applicant getting a licence plate are worse than 1 in 2000, and many would-be drivers are kept in limbo for years,’’ he said.
In Auckland, increasing apartment living, and reductions in on-street parking make car ownership more difficult.
‘‘While Auckland is hardly on the scale of Beijing or London, it has the congestion problems of a much larger city,’’ Field said.
‘‘And in keeping with global policy trends, Auckland Council appears determined to reduce the number of cars entering the CBD. Given the propagation of bus and cycle lanes, petrol tax increases, and price hikes in council-owned parking buildings, drivers can be forgiven for thinking they are being unfairly targeted. Auckland’s limited public transport network doesn’t give them many other options.’’
Into the breach is stepping privatelyowned MaaS companies, with Lime, Cityhop, Uber and Onzo being the bestknown, and it is the young who are driving their uptake.
‘‘It’s the younger generations that will ultimately fuel the MaaS theme.’’
Ultimately, the evolution of MaaS will involve people using whatever form of collectively-owned transport is most efficient to get them to their destination at any point in time, Field said, with journeys planned using artificially intelligent systems via phone apps.
‘‘The dream goes something like this: a commuter uses an app to hail a driverless shuttle to her street, which takes her to a train leaving for the CBD, where she then hires an e-scooter for the final leg to the office. While that might sound crazy to traditional car commuters, many young people think sitting in traffic for two hours a day is even more insane.
‘‘As thematic investors, it’s the future we’re interested in. We’re not saying Auckland Council’s approach is right or wrong, only that change is happening, and there’s likely no turning back. MaaS is a global trend, and it’s almost certain to continue. Even Toyota, the largest car company in the world, is attempting to rebrand itself as a mobility company.’’
Investing in Maas requires scale, and giant global companies have taken stakes in the likes of Lime, Uber and automated vehicles.
The biggest players are Alphabet, which owns Google and is the leader in automated vehicles; Toyota, which has taken stakes in Uber as well as in Finnish company MaaS; and Alibaba, which has a big stake in Didi (the Uber of China).
More direct investment opportunities are coming to market.
‘‘We will have a better idea of how investors value MaaS when two ride-hailing companies list on the US share market this year. First up is Lyft, little known here, but a significant player in the US where it has a 30 per cent market share. Next comes the global leader, Uber, which has quickly become a household name in New Zealand since it launched in 2014.’’
Mobility as a service threatens to make some people richer, and some people poorer.
Collectively, fewer cars mean less household money spent on owning them, fuelling them, and keeping them on the road.
The car industry, and the service industries like mechanics, insurance and collision-repair, would all see their revenues fall, if private ownership of cars declined.