IDEAS home Printed from https://ideas.repec.org/a/eee/ecotra/v22y2020ics2212012219300735.html
   My bibliography  Save this article

MaaS economics: Should we fight car ownership with subscriptions to alternative modes?

Author

Listed:
  • Hörcher, Daniel
  • Graham, Daniel J.

Abstract

Proponents of the Mobility as a Service concept claim that subscriptions to alternative modes can effectively reduce car ownership and the adverse effects of underpriced car use. We test this hypothesis in a microeconomic model with endogenous mode choice as well as car and subscription ownership. The model contains congestible urban rail and car sharing options as substitutes of underpriced private car use. We find that aggregate car ownership is not a reliable proxy for road congestion: subscriptions may reduce car ownership while increasing the vehicle miles travelled by remaining car owners. Subscriptions induce welfare losses for two reasons. First, pass holders overconsume the alternative modes, as the marginal fare they face drops to zero. Second, non-pass holders tend to shift to car use due to the crowding induced by pass holders, causing additional distortions. We illustrate numerically that differentiated pricing is more efficient in achieving the goals of MaaS.

Suggested Citation

  • Hörcher, Daniel & Graham, Daniel J., 2020. "MaaS economics: Should we fight car ownership with subscriptions to alternative modes?," Economics of Transportation, Elsevier, vol. 22(C).
    • Handle: RePEc:eee:ecotra:v:22:y:2020:i:c:s2212012219300735
    DOI: 10.1016/j.ecotra.2020.100167
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2212012219300735
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecotra.2020.100167?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ian W. H. Parry & Kenneth A. Small, 2009. "Should Urban Transit Subsidies Be Reduced?," American Economic Review, American Economic Association, vol. 99(3), pages 700-724, June.
    2. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    3. Leonardo J. Basso & Hugo E. Silva, 2014. "Efficiency and Substitutability of Transit Subsidies and Other Urban Transport Policies," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 1-33, November.
    4. Mulley, Corinne & Nelson, John D. & Wright, Steve, 2018. "Community transport meets mobility as a service: On the road to a new a flexible future," Research in Transportation Economics, Elsevier, vol. 69(C), pages 583-591.
    5. Hayne E. Leland & Robert A. Meyer, 1976. "Monopoly Pricing Structures with Imperfect Discrimination," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 449-462, Autumn.
    6. De Borger, Bruno, 2001. "Discrete choice models and optimal two-part tariffs in the presence of externalities: optimal taxation of cars," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 471-504, July.
    7. Guidon, Sergio & Wicki, Michael & Bernauer, Thomas & Axhausen, Kay, 2020. "Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 91-106.
    8. Brown,Stephen J. & Sibley,David Sumner, 1986. "The Theory of Public Utility Pricing," Cambridge Books, Cambridge University Press, number 9780521314008, October.
    9. Jorge, Diana & Molnar, Goran & de Almeida Correia, Gonçalo Homem, 2015. "Trip pricing of one-way station-based carsharing networks with zone and time of day price variations," Transportation Research Part B: Methodological, Elsevier, vol. 81(P2), pages 461-482.
    10. John K. Dagsvik & Anders Karlström, 2005. "Compensating Variation and Hicksian Choice Probabilities in Random Utility Models that are Nonlinear in Income," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 57-76.
    11. De Borger, Bruno & Proost, Stef, 2015. "The political economy of public transport pricing and supply decisions," Economics of Transportation, Elsevier, vol. 4(1), pages 95-109.
    12. Arnott, Richard, 2007. "Congestion tolling with agglomeration externalities," Journal of Urban Economics, Elsevier, vol. 62(2), pages 187-203, September.
    13. Wang, Judith Y.T. & Lindsey, Robin & Yang, Hai, 2011. "Nonlinear pricing on private roads with congestion and toll collection costs," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 9-40, January.
    14. Jara-Díaz, Sergio & Cruz, Diego & Casanova, César, 2016. "Optimal pricing for travelcards under income and car ownership inequities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 470-482.
    15. Tirachini, Alejandro, 2014. "The economics and engineering of bus stops: Spacing, design and congestion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 37-57.
    16. Piet Rietveld & Stefan van Woudenberg, 2007. "Second-best Decision Making of Railway Operators: How to Fix Fares, Frequency and Vehicle Size," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 363-385, September.
    17. Graham, Daniel J. & Gibbons, Stephen, 2019. "Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    18. Storme, Tom & De Vos, Jonas & De Paepe, Leen & Witlox, Frank, 2020. "Limitations to the car-substitution effect of MaaS. Findings from a Belgian pilot study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 196-205.
    19. Xu, Min & Meng, Qiang & Liu, Zhiyuan, 2018. "Electric vehicle fleet size and trip pricing for one-way carsharing services considering vehicle relocation and personnel assignment," Transportation Research Part B: Methodological, Elsevier, vol. 111(C), pages 60-82.
    20. De Borger, Bruno, 2000. "Optimal two-part tariffs in a model of discrete choice," Journal of Public Economics, Elsevier, vol. 76(1), pages 127-150, April.
    21. Boyacı, Burak & Zografos, Konstantinos G. & Geroliminis, Nikolas, 2015. "An optimization framework for the development of efficient one-way car-sharing systems," European Journal of Operational Research, Elsevier, vol. 240(3), pages 718-733.
    22. Ho, Chinh Q. & Mulley, Corinne & Hensher, David A., 2020. "Public preferences for mobility as a service: Insights from stated preference surveys," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 70-90.
    23. Panayotis Christidis & Juan Nicolás Ibanez Rivas, 2012. "Measuring road congestion," JRC Research Reports JRC69961, Joint Research Centre.
    24. Hörcher, Daniel & Graham, Daniel J., 2018. "Demand imbalances and multi-period public transport supply," Transportation Research Part B: Methodological, Elsevier, vol. 108(C), pages 106-126.
    25. Paulley, Neil & Balcombe, Richard & Mackett, Roger & Titheridge, Helena & Preston, John & Wardman, Mark & Shires, Jeremy & White, Peter, 2006. "The demand for public transport: The effects of fares, quality of service, income and car ownership," Transport Policy, Elsevier, vol. 13(4), pages 295-306, July.
    26. Mayeres, Inge & Proost, Stef, 2013. "The taxation of diesel cars in Belgium – revisited," Energy Policy, Elsevier, vol. 54(C), pages 33-41.
    27. Hörcher, Daniel & Graham, Daniel J. & Anderson, Richard J., 2017. "Crowding cost estimation with large scale smart card and vehicle location data," Transportation Research Part B: Methodological, Elsevier, vol. 95(C), pages 105-125.
    28. Walter Y. Oi, 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(1), pages 77-96.
    29. Caiati, Valeria & Rasouli, Soora & Timmermans, Harry, 2020. "Bundling, pricing schemes and extra features preferences for mobility as a service: Sequential portfolio choice experiment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 123-148.
    30. Polydoropoulou, Amalia & Pagoni, Ioanna & Tsirimpa, Athena & Roumboutsos, Athena & Kamargianni, Maria & Tsouros, Ioannis, 2020. "Prototype business models for Mobility-as-a-Service," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 149-162.
    31. De Borger, Bruno & Mayeres, Inge, 2007. "Optimal taxation of car ownership, car use and public transport: Insights derived from a discrete choice numerical optimization model," European Economic Review, Elsevier, vol. 51(5), pages 1177-1204, July.
    32. Smith, Göran & Sochor, Jana & Karlsson, I.C. MariAnne, 2018. "Mobility as a Service: Development scenarios and implications for public transport," Research in Transportation Economics, Elsevier, vol. 69(C), pages 592-599.
    33. Mark Wardman, 2014. "Price Elasticities of Surface Travel Demand A Meta-analysis of UK Evidence," Journal of Transport Economics and Policy, University of Bath, vol. 48(3), pages 367-384, September.
    34. Becker, Henrik & Balac, Milos & Ciari, Francesco & Axhausen, Kay W., 2020. "Assessing the welfare impacts of Shared Mobility and Mobility as a Service (MaaS)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 228-243.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hörcher, Daniel & Tirachini, Alejandro, 2021. "A review of public transport economics," Economics of Transportation, Elsevier, vol. 25(C).
    2. Ramos, Raúl & Silva, Hugo E., 2023. "Fare evasion in public transport: How does it affect the optimal design and pricing?," Transportation Research Part B: Methodological, Elsevier, vol. 176(C).
    3. Benjamin Maas, 2022. "Literature Review of Mobility as a Service," Sustainability, MDPI, vol. 14(14), pages 1-28, July.
    4. Lopez-Carreiro, Iria & Monzon, Andres & Lopez-Lambas, Maria E., 2021. "Comparison of the willingness to adopt MaaS in Madrid (Spain) and Randstad (The Netherlands) metropolitan areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 275-294.
    5. Ho, Chinh Q. & Tirachini, Alejandro, 2024. "Mobility-as-a-Service and the role of multimodality in the sustainability of urban mobility in developing and developed countries," Transport Policy, Elsevier, vol. 145(C), pages 161-176.
    6. Bahamonde-Birke, Francisco J. & Frowijn, Luuk & van Gils, Coco & Helmink, Rutger D.W. & Henkus, Sophie & van der Hoeven, Sanna & Mathilde Kolkman, O. & van Onzen, Tim & Ronteltap, Lisette & Wehl, Dina, 2023. "Am I willing to replace my car with a MaaS subscription? An analysis of the willingness of Dutch citizens to adopt MaaS and the triggers affecting their choices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    7. Iria Lopez-Carreiro & Andres Monzon & Elena Lopez, 2023. "MaaS Implications in the Smart City: A Multi-Stakeholder Approach," Sustainability, MDPI, vol. 15(14), pages 1-27, July.
    8. Koki Arai & Shuya Hayashi, 2021. "Business diversification and multifaceted markets," International Journal of Economic Policy Studies, Springer, vol. 15(2), pages 235-255, September.
    9. Mohit Tyagi & Nomesh B. Bolia, 2024. "Optimal pricing of subscription services in the restaurant industry," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(3), pages 262-273, June.
    10. Zhou, Zhengshu & Matsubara, Yutaka & Takada, Hiroaki, 2023. "Resilience analysis and design for mobility-as-a-service based on enterprise architecture modeling," Reliability Engineering and System Safety, Elsevier, vol. 229(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hörcher, Daniel & Tirachini, Alejandro, 2021. "A review of public transport economics," Economics of Transportation, Elsevier, vol. 25(C).
    2. Hörcher, Daniel & De Borger, Bruno & Seifu, Woubit & Graham, Daniel J., 2020. "Public transport provision under agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    3. Daniel Hörcher & Daniel J. Graham, 2021. "The Gini index of demand imbalances in public transport," Transportation, Springer, vol. 48(5), pages 2521-2544, October.
    4. Nikitas, Alexandros & Cotet, Corneliu & Vitel, Alexandra-Elena & Nikitas, Nikolaos & Prato, Carlo, 2024. "Transport stakeholders’ perceptions of Mobility-as-a-Service: A Q-study of cultural shift proponents, policy advocates and technology supporters," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    5. Hörcher, Daniel & De Borger, Bruno & Graham, Daniel J., 2023. "Subsidised transport services in a fiscal federation: Why local governments may be against decentralised service provision," Economics of Transportation, Elsevier, vol. 34(C).
    6. Hasselwander, Marc & Bigotte, Joao F. & Antunes, Antonio P. & Sigua, Ricardo G., 2022. "Towards sustainable transport in developing countries: Preliminary findings on the demand for mobility-as-a-service (MaaS) in Metro Manila," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 501-518.
    7. Ho, Chinh Q. & Tirachini, Alejandro, 2024. "Mobility-as-a-Service and the role of multimodality in the sustainability of urban mobility in developing and developed countries," Transport Policy, Elsevier, vol. 145(C), pages 161-176.
    8. Ho, Chinh Q., 2022. "Can MaaS change users’ travel behaviour to deliver commercial and societal outcomes?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 76-97.
    9. Zipeng Zhang & Ning Zhang, 2021. "A Novel Development Scheme of Mobility as a Service: Can It Provide a Sustainable Environment for China?," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    10. Reck, Daniel J. & Hensher, David A. & Ho, Chinh Q., 2020. "MaaS bundle design," Transportation Research Part A: Policy and Practice, Elsevier, vol. 141(C), pages 485-501.
    11. Tscharaktschiew, Stefan, 2014. "Shedding light on the appropriateness of the (high) gasoline tax level in Germany," Economics of Transportation, Elsevier, vol. 3(3), pages 189-210.
    12. Kim, Eui-Jin & Kim, Youngseo & Jang, Sunghoon & Kim, Dong-Kyu, 2021. "Tourists’ preference on the combination of travel modes under Mobility-as-a-Service environment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 236-255.
    13. Börjesson, Maria & Fung, Chau Man & Proost, Stef & Yan, Zifei, 2018. "Do buses hinder cyclists or is it the other way around? Optimal bus fares, bus stops and cycling tolls," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 326-346.
    14. Lopez-Carreiro, Iria & Monzon, Andres & Lopez-Lambas, Maria E., 2021. "Comparison of the willingness to adopt MaaS in Madrid (Spain) and Randstad (The Netherlands) metropolitan areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 275-294.
    15. Anas, Alex & Chang, Huibin, 2023. "Productivity benefits of urban transportation megaprojects: A general equilibrium analysis of «Grand Paris Express»," Transportation Research Part B: Methodological, Elsevier, vol. 174(C).
    16. Xuto, Praj & Anderson, Richard J. & Graham, Daniel J. & Hörcher, Daniel, 2021. "Optimal infrastructure reinvestment in urban rail systems: A dynamic supply optimisation approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 251-268.
    17. Lopez-Carreiro, Iria & Monzon, Andres & Lopez, Elena & Lopez-Lambas, Maria Eugenia, 2020. "Urban mobility in the digital era: An exploration of travellers' expectations of MaaS mobile-technologies," Technology in Society, Elsevier, vol. 63(C).
    18. DE BORGER, Bruno & PROOST, Stef, 2015. "Tax and regulatory policies for European transport - getting there, but in the slow lane," Working Papers 2015009, University of Antwerp, Faculty of Business and Economics.
    19. Kriswardhana, Willy & Esztergár-Kiss, Domokos, 2023. "Exploring the aspects of MaaS adoption based on college students’ preferences," Transport Policy, Elsevier, vol. 136(C), pages 113-125.
    20. Gillian Harrison & Astrid Gühnemann & Simon Shepherd, 2020. "The Business Case for a Journey Planning and Ticketing App—Comparison between a Simulation Analysis and Real-World Data," Sustainability, MDPI, vol. 12(10), pages 1-21, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecotra:v:22:y:2020:i:c:s2212012219300735. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecotra .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.