MaaS & Rebound Effect

Mobility as a Service (MaaS) integrates various forms of transport into a single mobility service, accessible on demand. Ideally MaaS makes transport faster, cheaper, more convenient and causes less emissions. This is true per ride. But what happens if cheaper and more convenient rides lead to more rides in total? Will people take more rides or drive more cars and bottom line cause more traffic and emissions?

In economies this effect is called “rebound”, “take back” or “boomerang” effect. It describes that improved efficiency can lead to a higher use of a good. Common rebound effects in the energy sector eat up 10-30% of the efficiency gains. In the worst case this effect could even overcompensate the efficiency gains completely and “backfire”, i.e. things could get worse.

This rebound effect has been seen for many improvements, partially or fully eating up their benefits. A classic example was an efficiency improvement in steam engines in the early days of industrialization. Instead of an expected decrease in the demand of coal, the coal demand increased significantly. Reason were the lowered costs for steam power, which made if attractive for further uses. This caused the total coal consumption to increase.[1]

Can this happen in mobility as well? Yes, it does! And we can see it already in several occasions:

• Lower oil prices and higher efficiency of aircraft engines and air travel-related processes led to lower prices per flight. Instead of increasing the margins for airlines it led to the disruption of conventional airlines through low-budget airlines, which caused a significant increase in air traffic.[2]
• Ride hailing, i.e. low fare taxi-like on-demand car services offered by so called TNCs (Transport Network Companies) such as Uber or Didi, have not led to people abandon their cars and so reduce traffic – but instead likely caused significant increase of car traffic in many cities. The likely reason is that not car drivers switched from their own vehicles to these “shared cars” but rather passengers of public transport and cyclists could afford the rides and abandoned their more efficient vehicles in favor of more comfort.[3]
• Wider roads are often justified by transport planners to reduce congestion. In fact they often cause more congestion. The supposed reason is that wider streets initially allow for higher speed and so for a longer range to maximize opportunities within their given travel cost and travel time budgets. This so called Braess’s paradox or “induced demand effect” leads to more travel often overcompensating the higher road capacity.[4]
• Fuel efficiency of vehicle motors should lead to lower emissions. Unfortunately the opposite is true as it has just led to stronger engines and longer distances driven.[5]
• The so called “travel time budget” for daily commute has not changed over time, just the distances increased when the average speed increased.[6]

Given these related and recent developments it is likely that the efficiency gains through MaaS might also lead to an increase in traffic via a rebound effect – unless countermeasures are taken. Depending on which type of the rebound effect is present, the counter measures differ:

• Direct rebound effect (more use of the same, e.g. more/brighter/longer use of LED lights)
• Indirect rebound effect (the savings from the efficiency gains get used for more other goods using the same resource – also called: income effect, e.g. savings from more efficient cars get used for flying)
• Psychological rebound effect: sometimes efficiency gains are just perceived and not real – but still lead to a higher use. So communication plays an important role.
• Economists also see a long-term economy-wide effect through increased production capabilities, which is hard to measure and cannot directly be influenced – and so not be considered here.

Both the direct and the indirect rebound effect take place if the user profits from the efficiency gains and can “re-use” the savings for other goods. At least for monetary savings this can be avoided by skimming the savings and using it for other purposes.

In a recent thinking circle at the Future Mobility Camp in Dresden, Germany a group of more than 30 mobility experts and enthusiast outlined opportunities to reduce the rebound effect for Mobility as a Service. It might not cover all aspects and mechanisms but could already avoid some of the expected rebound effects. Here is the essence on how rebound effects of increased transport efficiency could be reduced –

Overall suggestions to reduce rebound in MaaS

• Cities must shape the future of their mobility. If left to the open market, MaaS will be optimized for the profit of the respective companies, which is not the optimum regarding security of supply nor minimal climate impact. So MaaS requires local regulations to assure system efficiency and full coverage also of remote areas. These effect can be seen in many areas e.g. where new mobility providers focus on the dense city centers but completely ignore the outskirts and rural areas or where ride hailing cannibalizes traffic from more efficient mass transit bus or train systems. With the upcoming autonomous vehicles this effect is expected to increase even further.
• Regulate locally. As every city and region has different circumstances to be taken into consideration, regulations should be applied on a city/region level. Cities need to be enabled to shape, continuously adjust and enforce these regulations. On the re:publica 2019 conference mobility scientist Prof. Stephan Rammler explained that municipalities are the place where mobility transition happens”, which is in line with the approach of the C40 cities[7].
• Skim efficiency gains and keep prices constant in order to avoid higher demand through lower prices. Instead municipalities should invest the gains for other mobility projects, e.g. in better rural transport options, which would otherwise be underserved, when let to open market.
• Charge users the real costs of car usage including costs for infrastructure (streets, parking lots), accidents and environmental damage (so called internalization of external effects[8])
• Offer subsidized public transport flat rates: Public transport and MaaS have a competitive disadvantage compared to car ownership when it comes to perceived costs: Reason is that the majority of the car’s cost per mile are fixed costs for depreciation, taxes, insurance, repair and so on, whereas the variable and perceived costs per ride are rather low. So a car has almost a “flat rate”. In order to assure a level playing field, public transport and basic MaaS options should have low to no perceived variable costs.
• Increase car usage costs: one reason for high car usage is the low perceived cost per use. Cities could increase these costs and create cost awareness when they visibly charge per use either with parking fees and or a congestion fee for cars entering certain areas of the city. Pay-per-use fees like this would “unflatten” the car usage costs and reduce the competitive advantage of individual car usage.
• Apply fee-based, smart parking management without exceptions in city centers: In some cities an estimated 30% of traffic in congested city areas is due to car drivers looking for free or low-cost parking lots.[9] If it would be clear that all parking lots have the same price, there would be no motivation to search for free or cheaper parking lots. If combined with a smart parking management system indicating free parking lots, this search traffic could be significantly reduced.
• Reshape the cities’ traffic infrastructure to better support non-car traffic. Traffic infrastructure induces certain transport modes. As an example the Transport for London (TFL) traffic authority has re-purposed some of the city’s major car routes as bike lines. As a consequence car traffic got more congested but bike traffic has become a much more efficient than any mode of traffic has been before in this area. Another example would be to repurpose curbside parking lots as bike lanes. In conjunction with fee-based parking management, this could keep cars out of the city and improve inner-city mobility at once as one participant from Copenhagen on the Fluidtime Symposium 2019 answered on the question why in Copenhagen more people use a bike instead of a car to get to work: “It is not that we are green ‘tree huggers’. It is simply because it is the most efficient way to get from A to B in the city.”
• Improve safety and comfort of public transport stations and mobility hubs. In some countries public transport has the stigma of being the mode of transport for the poor. And if you use public transport in these countries, you will understand why this is the case: it is unsafe, slow, uncomfortable and sometimes disgustingly dirty. If MaaS in combination with mass rapid transit should be successful, this needs to change. And the high standards not only need to apply to the vehicles but also to the stations and their surroundings, which might require major investments and changes in security management.
• Regulate last mile logistics/the transport of goods. Joint urban consolidation centers and parcel lockers/packing stations (shared post boxes where customers can pick and ship packages in self-service) can reduce last mile delivery traffic significantly. One way to reduce last mile delivery traffic – even difficult to enforce – would be to allow only one company to deliver packages in one area. Another suggestion to straighten out traffic over time would be to allow inner-city B2B logistics at night with silent eTrucks.
• Make MaaS sexy! Tesla did not invent electric vehicles but they made them widely accepted by making EVs sexy. This positive emotional connection would also be needed for a high acceptance of intermodal mobility and more bike rides and a higher use of mass transit systems.
• Think mobility beyond transport. Mobility as the possibility to meet people and attend events could partially be met using technology and other forms of communication and participation. So the possibility spaces could conceptually be extended from being purely physical and geographical.

We also identified more actions to reduce traffic, which are not rebound-specific:

• Promote walking and cycling on short distances. The big fraction of car rides are in short distance up to 5 km / 3 miles. This is the ‘micro mobility’ distance where bicycles and electric scooters or sometimes even walking are most efficient. Walking and cycling also have a positive net effect on health and wellbeing.
• Enable your children to gain ‘traffic competence’ and teach them how to safely and efficiently use different mobility options. This could reduce the often cited “SUV mum” or “daddy taxi” traffic.
• Allow employees to work from home or establish a home office.
• Establish co-working at mobility hubs. The city of Hong Kong Mass Transit Railway (MTR) manages the properties of their stations with their “rail plus property” development and so became profitable.[10] German railways Deutsche Bahn will also establish coworking spaces at selected stations.[11] These coworking spaces could be located at mobility hubs in the outer periphery of cities and so reduce the need to commute into the city centers.
• Replace commuting allowance tax benefits with better public transport for rural areas and more park & ride options at the cities boarders.
• Reduce business travel: It was agreed that information deficits and trust issues can be better addressed and relationships can be better build when meeting face to face, which makes business travel sometimes necessary. On the other hand it was also agreed that many trips are not necessary and could be replaced by video conferences. So providing video conference equipment and propagating video conferences could help independently from any efficiency gains in the transport sector.
• When traveling, stay longer and make best use of being on site.
• Consolidate project teams on one location if possible. This usually increases project efficiency as well.
• Foster a cultural change to drive behavioral change, e.g. by propagating “Flygskam” (Swedish for “Flying Shame”) – being part of the “jet set” frequent flyer circle should not be seen as adorable status but rather as irresponsible behavior.
• Prohibit private use of frequent traveler “miles” – this kind of “bribery” causes unnecessary high travel costs for companies as well. In many countries tax laws clearly indicate that bonus miles from business trips belong to the company and not to the individual traveler. So the regulations are there already and just need to be enforced consequently – starting with companies’ travel policies and tax authorities auditing it and penalizing abuse.
• Provide capable video conferencing systems and train students in the use and etiquette of video conferences at universities.
• Prohibit short-haul flights up to 500 km/300 miles in the companies’ travel policy and foster train or bus usage and van-/carpooling instead. At that distance it is often faster and cheaper.
• Increase flight costs e.g. by kerosene taxation which would also reduce the competitive disadvantage the less climate impacting rail traffic has in many countries compared to air traffic.

I hope that some of these suggestions from the various mobility experts could also be applied in your area of influence. More ideas and comments are welcome.

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[1] The Jevons paradox; Wikipedia: https://en.wikipedia.org/wiki/Jevons_paradox

[2] Fuel and air transport; Air Transport Department, Cranfield University: https://ec.europa.eu/transport/sites/transport/files/modes/air/doc/fuel_report_final.pdf

[3] The New Automobility: Lyft, Uber and the Future of American Cities; Schaller Consulting: http://www.schallerconsult.com/rideservices/automobility.pdf

[4] Wider roads, more cars; Petter Næss,  Martin J. H. Mogridge, Synnøve Lyssand Sandberg: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1477-8947.2001.tb00756.x

[5] Peak car and increasing rebound; Lee Stapleton, Steve Sorrella, Tim Schwanen: https://www.sciencedirect.com/science/article/pii/S1361920917300536

[6] The link between travel Time Budget and Speed: a Key relationship for urban space-time dynamics, Iragaël Joly: https://www.researchgate.net/publication/5087272_The_link_between_travel_Time_Budget_and_Speed_a_Key_relationship_for_urban_space-time_dynamics

[7] https://mobility-as-a-service.blog/c40-together4climate/

[8] Internalisation of transport external costs, European Commission:  https://ec.europa.eu/transport/themes/sustainable/internalisation_en

[9] The high cost of free parking; Donald C. Shoup: https://books.google.com.sg/books/about/The_High_Cost_of_Free_Parking.html

[10] How public transport actually turns a profit in Hong Kong; The Guardian:  https://www.theguardian.com/cities/2019/mar/19/how-public-transport-actually-turns-a-profit-in-hong-kong

[11] Smart City Bahnhof, https://ngin-mobility.com/artikel/deutsche-bahn-smart-city-bahnhof/ (German language)