These apps are trying to get car dealers out of business

(CNN Business) – City dwellers are used to using apps to decide the best way to get from one place to another. Is it faster to take the train or the bus? How about a taxi or a city bike? Which provider has the closest e-scooter?

It can be inconvenient and time consuming. That is why the Finnish company MaaS Global decided to add all these services in an application called Whim. Users can access taxis, buses, bicycles, e-scooters and rental cars through this application, which is available in more than 10 cities in Europe and Asia.

“Whim’s sole purpose is to compete against car ownership,” CEO Sampo Hietanen told CNN Business.

According to the International Energy Agency, transportation is responsible for 24% of global energy-related CO2 emissions, most of which come from passenger vehicles.

If Whim can persuade users to swap their car keys for a single app that offers multiple transportation options, the environmental impact could be huge, Hietanen said.

Car competition

Hietanen admitted that it is not an easy task. To be successful, Whim has to be more convenient and cheaper than owning a car. “The car represents the freedom of mobility,” says Hietanen. Even if a city dweller hardly uses it, they keep it parked outside as “freedom insurance.”

Users can choose from several levels of service, including a pay-as-you-go option and a 30-day season pass, which costs € 62 (US $ 73) in Helsinki, where the app is more established, for unlimited public transport and short taxi rides. The ticket also offers car rentals starting at € 55 (US $ 65) per day.

While Helsinki has well-developed alternatives to the car, that doesn’t happen everywhere. If a city “doesn’t have an extensive public transportation system or lots of rental cars or taxis,” then it will be difficult to convince people to give up their cars, said Maria Kamargianni, associate professor of transportation and energy at the University College of London.

Additionally, he said apps like Whim represent the first step in tempting people to stop owning a car, adding that the availability of alternative transportation options is likely to improve as the market matures.

The research firm MarketsandMarkets predicted that the global mobility services market will grow from $ 4.7 billion in 2020 to $ 70.4 billion in 2030.

Growing applications

Other providers include Citymapper, which launched a travel pass for Londoners in 2019, and Moovit, which launched an app mobility all-in-one in Israel last year.

Whim, launched in 2016, is one of the first providers and has raised more than US $ 60 million from investors such as BP (BP), Mitsubishi (MBFJF) and Toyota Financial Services. It is available in several European cities and in Tokyo, and has accumulated 18 million trips worldwide since its launch.

But business has been affected by the covid-19 pandemic, Hietanen said. With fewer people traveling, revenues are lower, which slows the expansion of the company to other cities.

The Finnish newspaper Helsingin Sanomat recently reported that the company had spent 50 million euros ($ 59 million) on failed expansion ventures. Hietanen said the money was spent on integrating multiple transportation providers, establishing market readiness in various countries, and developing the complex technology that underpins the application.

“We have known from the beginning that the investment required to create this would be substantial,” he said, adding that the company has recently secured more investments.

Greener travel

Although the industry is only in its infancy, Hietanen is confident that there will be demand. A recent report from the International Transport Forum (ITF) says that mobility services will be vital to meeting the needs of a growing world population and accelerating urbanization. But for growth to occur, “people must choose it over other travel options,” such as private motor vehicles.

This is already happening, Hietanen said. According to a company’s survey in Helsinki, 12% of its users said that Whim had prompted them to give up their cars. “People want a more sustainable solution,” he said, “but they still want the freedom to go anywhere, anytime.”