Business Case Queenstown/Auckland Airport Mobility as a ......Queenstown MaaS Pilot The purpose of...

Business Case Queenstown/Auckland Airport Mobility as a Service Pilot

20 March 2017

VERSION 2.12

Report: Mobility as a Service Economic Business Case

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Business Case Queenstown/Auckland Airport Mobility as a Service Pilot

NZ TRANSPORT AGENCY 20 March 2017 i

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NZ TRANSPORT AGENCY 20 March 2017 1

CONTENTS

BUSINESS CASE QUEENSTOWN/AUCKLAND AIRPORT MOBILITY AS A SERVICE PILOT ......... 1

Contents ........................................................................................................................ 1

Introduction and Context ............................................................................................... 2

Auckland Airport MaaS Pilot .................................................................................. 2

Queenstown MaaS Pilot ......................................................................................... 3

Options Analysed .................................................................................................. 3

Overview of Economic Business Case Evaluation Approach ............................................. 5

Overarching Business Case Assumptions ............................................................... 5

Costs Assumptions ............................................................................................... 6

Benefits Assumptions ............................................................................................ 7

Business Case Outcomes ................................................................................................ 9

Sensitivity Analysis .............................................................................................. 10

Commercial Considerations ......................................................................................... 12

Business model components ............................................................................... 15

Commercial Delivery ........................................................................................... 17

Broader Considerations ................................................................................................ 19

Data Policy, Privacy and Security .......................................................................... 19

MaaS Queenstown and Auckland Airport Pilot Risks ............................................ 22

Benefits Realisation ............................................................................................. 23

Further New Zealand Inc Benefits and Costs ........................................................ 23

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INTRODUCTION AND CONTEXT

The New Zealand Transport Agency (NZTA) is undertaking a pilot study into enabling a National Mobility as a Service (MaaS) platform (see the Strategic Case for a “National Mobility as a Service Marketplace in New Zealand”). MaaS is a transport delivery model that embraces a system-wide approach to mobility through a customer journey planning applications (“apps”).

Utilising digital technology, public, private and active mobility services, as well as broader informational services are combined through an app, unifying multimodal journey planning and travel information and payment into a single user account. MaaS connects consumers to optimal (time, cost and preference-based) travel choices, and enables mobility suppliers to leverage data to better meet the demand needs of the travelling public.

The MaaS approach is centred on real-time exchange of information between consumer and transport providers, facilitating the matching of consumer mobility needs, preferences and willingness to pay with the efficient provision of travel services.

Various consumer research has been undertaken to further understand the mobility needs of the New Zealand communities1. The key findings of this research suggest:

• Customers are seeking digital forms of journey planning information, usable by novices or experienced travellers, pre and in-trip, with easy to understand, reliable and real-time multimodal information from trustworthy sources;

• Real-time information on journey planning and updates within journey, particularly regarding disruption are the highest priority for future improvements to information. This was followed by the priority of being able to compare route specific information across travel mode options (integrated multimodal travel);

• Digital-based information currently has the highest penetration: 95% of respondents currently access information via this medium. Ubiquitous digital information is the way forward; and

• Customers are open to data sharing: 77% of customers are willing to share their travel data and 70% of travellers want this information to be available.

Based on these findings, there are opportunities for the NZTA to facilitate a MaaS platform nationally. To embrace these opportunities and wider socio-technology trends, NZTA plan to undertake two pilot schemes, enabling a MaaS platform for land transport access at Auckland Airport and to the ski villages accessible via Queenstown. To contain scope and risks, the analysis provided in this paper is limited to the Auckland Airport pilot.

Auckland Airport MaaS Pilot

The objective of the MaaS pilot at Auckland Airport is to facilitate seamless ground transport planning for travel to and from the airport. Auckland International Airport is a major contributor to New Zealand. Further to this, Auckland Airport has faced ongoing congestion and accessibility related challenges, such as the recent gridlock experienced in December 2016 which resulted in many passengers and airline crew missing flights and causing significant delays to airline services. A task force has been established to address these congestion and accessibility challenges, including accelerating various initiatives that would improve travel times to the airport. The delivery of a MaaS

1 NZTA Customers' requirements of multimodal travel information systems 2013; NZTA Detailed customer requirements of travel information services 2015

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platform will form part of a broader suite of initiatives that will improve airport travel times, by ameliorating challenges in accessibility, information and journey choice optimisation. In addition, should direct pricing be considered as part of the travel demand management package for the airport, the MaaS platform will readily be able to support any such proposal.

The Auckland Airport MaaS pilot will feature an integrated network-wide mobility service into one digital service, interfacing with airport customers via a journey planning app or website. The MaaS platform will have the following features:

• End-to-end journey optimisation: user friendly app that shows occupancy, real-time arrival notifications and in-journey notifications for distance and alerts to destination

• Real-time information: for congestion both within the airport and on surface access around the airport

• Supports all modes of transportation (multimodal), including on-demand services • Front-end: The front-end app for customers will be provided by Auckland Airport and

potentially by Air New Zealand as well

• Payments: Customer will use mobility providers’ “native” payments and ticketing solutions • At the discretion of mobility app providers, enable advertising and other commercial services

The Airport MaaS pilot will service the information, accessibility and journey planning needs of airport passengers, airport employees and the broader workforce surrounding the airport. While this business case has primarily focused on quantifying the impacts on airport passengers (due to the availability of robust airport passenger data), the improvements for the broader workforce on the Auckland Airport footprint will be significant and represent further upside to the business case analysis presented in this paper.

Queenstown MaaS Pilot

The purpose of the proposed Queenstown MaaS pilot is to better facilitate improved planning and mobility information between Queenstown and the surrounding ski villages. Queenstown is New Zealand’s premier snow sports destination and has access to a range or ski villages between 20 and 90 minutes from the town centre. Today, there is no single source of information that allows customers to organise their mobility needs for their winter vacations. Rather customers are required to self-source a fragmented set of travel options to understand mobility choices across various modes, travel time, costs and mobility preferences (e.g. vehicles catering for ski bag luggage requirements).

The extension of the MaaS platform from the Auckland Airport pilot to a Queenstown pilot will enable those travelling to and from Queenstown to places like the Remarkables, Coronet Peak, Cardrona or Treble Cone to identify in a personalised journey planning app, a range of modes and the costs of available transportation, such as car rental, on-demand vehicles, bus services (private and shuttle), hired private transfers and taxis. The app will also help to facilitate parking and other mobility related purchases such as ski pass hire, ski village bus shuttle times and more. As with the Auckland Airport MaaS pilot, an app will be available to customers and partnership suppliers to plan, book and pay for their travel. The app’s detailed features will be similar to those described for Auckland Airport.

Options Analysed

The business case quantitatively evaluates the introduction of a MaaS pilot at Auckland Airport only and does not include Queenstown in the pilot. Our understanding of the Auckland Airport market and data availability supported the quantification of the airport pilot. In contrast, publicly available data

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on Queenstown mobility is limited, with the pilot itself needing to source the key data inputs required to establish the business case. The following two options are assessed by the economic business case:

“Do minimum”: assumes a continuation of the current information, planning and payments offering, with minimal investment in enhancing this service.

Option Case: A MaaS platform is delivered for Auckland Airport land transport customers in October 2017 and operates until 30 June 2018.

A second option case was considered in the pilot business case. The option cogitated was for a private operator to produce the MaaS platform as in the case of Whim in Helsinki, Finland2. This option has been dismissed due to the closed nature of the system platform and the limitations this would put on creating a single system mobility marketplace.

2 http://whimapp.com/fi-en/

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OVERVIEW OF ECONOMIC BUSINESS CASE EVALUATION APPROACH

The methodology is consistent with the NZTA Economic Evaluation Manual (EEM) effective from the 1st January 2016. Further input from NZTA stakeholders was gathered to refine the approach where existing guidelines were insufficient (e.g. evaluation periods for technology projects). The remainder of this section outlines the approach and assumptions used as an input to the evaluation of the pilot business case. We note that this is a preliminary cost benefit analysis on a pilot airport scheme and there are potentially further benefits that could be quantified under a detailed evaluation for the Auckland Airport pilot and the Queenstown pilot. These are identified in the section on Broader Considerations.

Overarching Business Case Assumptions

The following assumptions were used as the structure for the Auckland Airport pilot business case:

• Evaluation period: 1 year (July 2017 until June 2018), which includes 3 months of MaaS platform development, testing and commissioning, and 9 months of platform operation. This evaluation period was advised by NZTA3

• Pilot commencement date: October 2017. It is assumed that the pilot does not continue beyond the initial trial period

• Discount Rate: No discount is applied due to the short evaluation period4 • All costs in this report are quoted in NZD as at 22 February 2017 (unless otherwise stated)

based on the following exchange rates: o 1.0 NZD = 0.718 USD o 1.0 NZD = 0.936 AUD

• The value of time (VoT) assumed for occupants travelling for work purposes is higher than those travelling for non-work purposes. The base VoT for vehicle occupants is sourced from Table A4.1(a) in the EEM, and these values are escalated from FY03 values to FY17 using the latest EEM update factor of 1.45. The VoT for business and leisure passengers quoted in 2017 NZD are as follows5:

o VoT business

: 34.58 o VoT

leisure: 10.01

• The base Auckland Airport passenger volumes used to identify the benefits of the pilot include 5.7 million for international traveller long haul, 3.6 million international short haul (trans-Tasman) and 8.4 million for domestic travellers in 20166. Each market is forecast to grow by 4%, 4% and 3% respectively over the evaluation period7

• International visitor data from New Zealand Statistics indicates that business passengers account for 15% of trans-Tasman passengers and 7% of international passengers. It was assumed that business passengers (inbound and outbound) account for 30% of all domestic passengers8

3 NZTA advised assumption 4 NZTA Economic Evaluation Manual 5 NZTA Economic Evaluation Manual 6 NZ Statistics 7 L.E.K. assumption 8 L.E.K. assumption

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Costs Assumptions

The overall cost assumptions were gathered by the NZTA from Machine Zone Inc. Further costs assumptions were developed based on input from the NZTA Connected Journeys Team. The key cost assumptions in NZD for the option case include:

• Maas platform development and operating costs: $1 million9 • NZTA development and other costs: $1.2 million10

Total present value cost = $2.2 million

9 Connected Journeys Team based on Machine Zone Inc. quotation 10 NZTA advised assumption

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Benefits Assumptions

The overall benefits assumptions for the pilot Auckland Airport economic business case are estimated based on improving the customer experience, improvements in service planning and reduced environmental externalities. The benefits are as follows:

Customer amenity benefits: improvements in end-to-end journey planning and real-time information

• The mobility service app will generate customer amenity benefits associated with easier real-time multimodal journey planning, information relating to all aspects of their journeys (e.g. travel time, cost, etc.). To estimate the amenity benefits we have used a Willingness to Pay (WTP) approach, which takes stated preference research and asks customers how much they would pay for a multimodal information platform with a range of trip-planning options: real-time information; multiple-proposals of itineraries; travel time computation; and location services. Evidence has been gathered on airport land transport in Europe which suggests customers experience an equivalent WTP time saving benefit of 21 minutes per trip for real-time information and multiple itinerary planning11

• These time savings have been equated to an improvement in amenity benefits in the Auckland land transport environment by multiplying by the value of time for business and leisure travellers going to and coming from the airport. In the Auckland context, this is estimated to drive a 15 percentage point change in mode share for public transport and new on-demand ride-share services. It is estimated that over a first three year period airport bus mode share would increase from 6% to 15% and on-demand ride-share would increase from zero to 6% mode share. The rate at which mode shift grows is assumed to reflect that technology has a different impact on mode shift behaviour relative to new infrastructure build/new services – there is essentially no lag. It was assumed that users have an economically rational response to mode choice directives by the MaaS app (i.e. when real-time information advises customers that the most effective way to get to the airport is by bus, they take the bus). There are other decision making considerations involved in customer mode shift, such as party size, luggage and the party responsible for payment, but it is implicitly assumed that these factors are incorporated into the core app decision making capability. However, with a conservative estimate of the consumer (mode shift) response to integrated planning and journey optimisation, the realisation of the full mode share shift would only come in year FY18/19, one full year after launch (see table 1 below). Notably, the improvement in mode share for airport bus usage is consistent with benchmarks in similar international contexts, such as at Melbourne airport. Melbourne Airport bus services have a 15% mode share and share similar modal competition from other on-road mobility providers12

Table 1: On-demand and public transport mode shift due to MaaS in the option case

MODE FY16/17 FY17/18 FY18/19

On-Demand 0% 3% 6%

Public Transport 6% 10% 15%

11 Dantan, S., Bulteau, J., & Nicolaï, I. (2015). Hurried or risk-adverse travelers: who will pay more for multimodal information?. Procedia Engineering, 115, 61-68. 12 L.E.K. assumption

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• The amenity benefits for those who mode shift to on-demand ride-share is reduced by a factor of 50%. This is a conservative estimate as the rationale for mode shift suggested by on-demand ride-share companies is that 50% of the mode shift is attributed to accessibility improvements through information. The remaining 50% is due to the creation of a “new style of travel” that is cheaper and more convenient than alternatives (e.g. taxi)13

Lower environmental externalities: relates to the reduction in road pollution associated with the switch from car to airport bus and the higher vehicle occupancy rates achieved by on-demand ride-share at airports from shifts from car or taxi

• The environmental externality benefit was calculated from three elements: reduction in number of cars due to mode shift and increased occupancy rates from the introduction of on-demand ride-share “pool”; weighted average journey length to/from Auckland Airport (based on airport statistics and population densities); and the average vehicle emissions cost per kilometre travelled

o The assumptions for on-demand and public transport mode shift and average vehicle occupancy rates (1.2 passengers per car and 2 passengers per on-demand vehicle) were used to derive the number of private cars shifted off the road

o The weighted average journey length was estimated using the Auckland’s population distribution per regional ward from the 2013 census. The population was used to weight the travel distance to each regional ward14

o The emissions cost per kilometre was calculated using the standard passenger car Euro V emissions rates (g/km) for CO

2, NO

x and PM

10 and the costs values ($/tonne)

were sourced from previous transportation studies15

Improved management information systems: enable better network planning and fleet optimisation

• This is a benefit achieved by using actual customer travel demand data to better manage service schedules. A benefit of 1% of reduced total pilot operating costs have been assumed each year over the project evaluation period16. Pilot operating costs have been used as a proxy for operating costs, with benefits from improved management information systems in the range of $150,000 p.a.

13 Based on L.E.K. consultation with ride-share provider(s) 14 New Zealand Statistics 15 ARUP, Auckland Transport (2013). Auckland City Rail Link Sustainability Benefit Valuation Methodology Development 16 L.E.K. assumption

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BUSINESS CASE OUTCOMES

The business case for Auckland Airport reveals a positive business case. The specific pilot business case outcomes (in NZD) include:

• Present Value (PV) costs: $2.2 million • PV benefits: $8.6 million • Net Present Value (NPV): $6.4 million • Economic Benefit Cost Ratio (BCR)17: 3.97 • Financial Benefit Cost Ratio18: 12.23

The results of the cost benefit analysis suggest that the pilot MaaS project will have significant benefit to the Auckland land transport environment, primarily from the amenity benefits (i.e. improved end-to-end journey planning and journey optimisation). The following figure shows a waterfall chart of the NPV of benefits and costs for the MaaS pilot for the project term.

Note: The amenity benefits describe the customer benefit realised when the provision of real-time journey information and itinerary planning is provided through an app or website, leading to a more efficient allocation of journeys to modes. This has been estimated using a willingness to pay approach.

17 Excludes revenue benefits; 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝐶𝑜𝑠𝑡𝑅𝑎𝑡𝑖𝑜 𝐵𝐶𝑅 = ./01023/451563789:;37:<:1=>;5?:731@90878A B31:1/3:<45156378

18 Includes commercial financial revenue benefits

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Sensitivity Analysis

Five sensitivity scenarios were analysed against the pilot option case outcomes (described above). These scenarios include:

1. Value of Time for outbound passengers: VoT doubled. Evidence suggests that customers have a higher VoT for land transport to the airport than for typical PT VoT. The Sydney Airport Joint study19 and the Australian Transport Council20 suggest that VoT could be three to four times higher. We have therefore undertaken a sensitivity test by doubling the PT VoT for those accessing the airport for an outbound flight. This represents the risk of a delayed flight to customers

2. Varied mode share profiles (lower and higher take-up rate of MaaS app at Auckland Airport): a primary driver of the amenity benefits of the MaaS app at Auckland Airport is the absolute mode share shift to on-demand ride-sharing and airport bus. It is therefore a key determinant to the success of the MaaS app pilot project. Sensitivity testing was performed for low and high case mode share as follows:

a. Low case mode share: On-demand mode share ceiling of 3% and airport bus mode share ceiling of 10%

b. High case mode share: On-demand mode share ceiling of 9% and airport bus mode share ceiling of ceiling 20%

3. Varied Willingness to Pay equivalent time: ±20%. The WTP equivalent time is an important driver of the amenity benefits as it is derived from the amount of money customers are willing to pay for multimodal journey information provided by the MaaS app. The WTP is derived from a European study and consequently there is potential that the value will be different in the Auckland land transport context. Sensitivity testing is therefore conducted for the case where WTP equivalent time is 20% higher and 20% lower

4. Contingency Costs: given that the costs provided for the business case are sole sourced, it is prudent to undertake sensitivity analysis on the cost profile. A 20% increase in costs is assessed

5. Include revenue benefits: The MaaS commercial case identified a number of financial opportunities that are available to various third-parties (e.g. Auckland Airport, private mobility suppliers, private payments suppliers, etc.). Three revenue opportunities were quantified in the financial assessment: processing of mobility payments (commissions), in-app marketing and advertisement, and uplift in airport retail. The sensitivity test includes these financial benefits in the NPV and BCR calculations to evaluate the full potential economic and financial benefits for the mobility ecosystem

19 http://westernsydneyairport.gov.au/sydney_av_cap/files/sac_part_five_impacts_if_demand_is_not_met.pdf 20 http://transportinfrastructurecouncil.gov.au/publications/files/National_Guidelines_Volume_3.pdf

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The business case outcomes for each of the above sensitivity scenarios are outlined below.

Table 2: Results of the sensitivity analysis

Variable Sensitivity Test NPV BCR

Value of Time VoT Outbound

* 100% $ 10.6m 5.89

Mode Share Profile High: On-Demand = 9%; PT = 20% $ 9.3m 5.29

Low: On-Demand = 3%; PT = 10% $ 4.3m 3.00

Willingness to Pay High: +20% $ 8.1m 4.74

Low: -20% $ 4.8m 3.19

Contingency Costs Platform OPEX + 20% $ 6.0m 3.30

Revenue Benefits Include revenue benefits $ 7.9m 12.23

The results of the sensitivity testing show an NPV range of $4.3m to $10.6m and a BCR range of 3.00 to 12.23. The Value of Time for outbound passengers has the largest impact on the NPV and BCR as it is a primary driver of the amenity benefits of MaaS at Auckland Airport because the possibility of missing a flight represents a significant risk to passengers. The mode share profile has the second largest impact on the NPV and BCR as this is also a critical driver of the amenity benefits. However, even with a marginal change in mode share resulting from MaaS at Auckland Airport, the results suggest that there will be significant upside from airport employees, the Queenstown pilot (not quantified here) and the expansion to other geographies. There is also an argument to suggest that there are increased amenity benefits to private vehicle customers who use the MaaS app, as they are likely to better anticipate congestion impacts on their journeys to and from the airport and therefore improve the reliability of travel. These benefits have not been captured in this business case. Overall, the option case results and the sensitivity analyses support a recommendation to proceed with the pilot MaaS project at Auckland Airport.

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COMMERCIAL CONSIDERATIONS

This section outlines how the Queenstown and Auckland Airport pilot will work in practice and how it will be rolled-out from a commercial perspective. The commercial case explains how customers interact with the MaaS platform, the business models that will be piloted and technical architecture that could be implemented, as well as the various project management considerations.

The business model below shows the high level interactions between the MaaS components and the mobility actors - being the customers, mobility service providers, mobility information providers, stakeholders and financial service providers.

the Auckland Airport Pilot has two sub models according to the sophistication and complexity of the mobility service providers. For simple mobility service providers, such as car parking or purchasing a ticket on Skybus, Model #1a as shown in Figure 1 is applicable. For more elaborate mobility service providers such as ride-share providers (e.g. Uber) Module #1b as shown in Figure 2 is applicable. The key difference between these models is the anonymity of the customer. Uber requires the customer to have established a customer account to use its service whereas a car parking provider does not have this requirement.

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Figure 1: NZTA MaaS Business Model #1a – Auckland Airport Pilot simple provider

Note: The Payment capability is out of scope for the current pilot will be considered in future scope

Customer Customer Bank

Mobility service provider Bank

Stak

ehold

ers

Mobility Service Provider

MaaS Customer

App

MaaS Back-Office (Information, travel

Records)

Travel Needs\ Travel Information


Actual Usage


Reporting and Analysis

Third Party App Developers

Third Party Mobility Service Providers

MaaS Provider (NZTA Sponsored)

Regulation & Monitoring (NZTA)

Customer

Key

Financial transactions

Information data transactions

Manual transactions

Mobility Information Provider

Third Party Mobility Information Providers

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Figure 2: NZTA MaaS Business Model #1b – Auckland Airport Pilot complex provider

Note: The Payment capability is out of scope for the current pilot will be considered in future scope

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Business mode\ components

Customer

The following points identify the key business attributes of the customer:

• The customer includes any individual or group searching for travel information and travelling on a service provided by a mobility service provider

• Customers include the full range of age demographics including infant, child, adult and senior citizens

MaaS customer app

The following points identify the key business attributes of the customer app:

• The Customer apps reside on the smartphones of customers and provide a single point for accessing MaaS

• The Customer apps will provide travel options and supporting information to customers so that they can make an informed choice for their preferred mode travel. Supporting information may include

o Real-time data on the available modes o Optimal routing o Congestion or delays o Occupancy o Vehicle locations o Arrival times o Travel times

• Once on their journey the customer will be able to choose to receive in-journey progress notifications including estimated destination arrival time

• The customer app will have support for marketing and advertising service, and other commercial services as desired by private MaaS app providers

• There may be multiple incarnations of the customer app. That is, there would be no restrictions to the number of customer apps developed by 3rd party developers, subject to NZTA MaaS guidelines21

MaaS back-office

The following points identify the key business attributes of the MaaS back-office:

• The MaaS back-office is the technology at the centre of MaaS. It processes data from/for the various mobility actors related to travel needs, journey planning, demand allocation, analytics and reporting, and marketing and advertising

• The back-office is responsible for: o Capturing the location of scheduled services in real-time o Supporting all included modes of mobility and relevant information sources o Managing on-demand dynamic routes for mobility services

• The back-office is responsible for recording customer feedback as provided via the customer app

21 The MaaS guidelines do not refer to any formal documentation

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Stakeholders

The following points identify the key business attributes of stakeholders:

• The stakeholders in MaaS include o Customers o Mobility service providers o NZTA o Government Departments such as Treasury o Commerce Commission o Disability groups o Auckland airport

• Stakeholders will need data to monitor the performance of mobility services • Stakeholders will use mobility services and usage data to plan new and improved services to

better meet customer’s needs

Mobility service provider

The following points identify the key business attributes of the mobility service providers:

• Travel purchases will use the mobility service provider existing payment methods and travel products

• The mobility service provider will provide a record of travel (i.e. origin, destination, mode, price/fare charged, etc.) to the MaaS back-office

• The mobility service provider may instigate the payment of a travel commission to the MaaS bank (Model #1 only)

• The mobility service provider may support a customer account that stores an individual’s travel history and payment preferences (Model #1 only)

• Mobility service providers are entities that provide transport or mobility related services and for the pilot may include

o Skybus o Taxis o Ride share (e.g. Uber) o Airport car parking o Auckland transport

Mobility information provider

The following points identify the key business attributes of the mobility information providers:

• The mobility information providers will supply data to the MaaS back-office that shows the status of the mobility environment. The mobility environment is the environment within which the mobility service providers operate or that may otherwise be a factor in the MaaS options presented to a customer. For instance NZTA would provide information about the state of vehicle congestion on the road network and Auckland Airport would provide information about the state of passenger congestion within the airport.

Mobility service provider Customer app/s

The following points identify the key business attributes of the mobility service provider customer app:

• The mobility service provider customer app resides on the smartphones (Apple and Android only for the pilot) of customers and provides the travel entitlement to the customer.

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Customers will use this travel entitlement as proof of entitlement to travel with the mobility service provider

Assumptions

The following list identifies the assumptions that have been made for the mobility service providers:

• Data is delivered to MaaS in real-time

The following assumption has been made for the customer app:

• All travel information requests must have either the origin or destination as Auckland Airport District

Commercial Delivery

The MaaS platform can be delivered through a range of commercial delivery models. Four distinct commercial options, which fall along a continuum of Government involvement and control. The MaaS platform will be delivered through a blend of a Commercial Partner and MaaS Influencer delivery model.

Maas Provider

• Develop and control the end-to-end MaaS platform integrating all mobility services, and providing the front-end customer app, back-office engine and payments engine. Control the mobility services provided by the platform, the platform terms and conditions, and the commercial relationships with suppliers

• Advantage: Provides the highest level of platform fidelity and ensures that the customer receives the best possible mobility experience

• Disadvantage: Government does not necessarily have the in-house knowledge and skills required to deliver and operate the MaaS platform, which could result in higher delivery and operating costs for the platform, and a long time to create mobility ecosystem

Commercial Partner

• Form partnerships with third-parties to develop the various elements of the MaaS platform and negotiate the role of each partner in the ecosystem, including their level of investment

• Advantage: Partner with the suppliers who are best suited in terms of knowledge, skill and cost base to deliver each element of the MaaS platform. Distribute the development costs among multiple parties with the opportunity for them to share in the financial benefits

• Disadvantage: Challenge with managing multiple commercial entities to ensure the fidelity of the MaaS platform and that customers receive the desired mobility experience

Open Sourcer Maas Provider Commercial Partner MaaS Influencer

Full Control / Involvement

Left to the Market

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MaaS Influencer

• Have no formal role in the development and operation of the MaaS platform, but form relationships with key players to influence the MaaS platform

• Advantage: Government does not shoulder the costs or management burden of implementing and operating the MaaS platform, but can still influence the final product through policy and relationship management, which is a natural strength and role of a facilitative Government

• Disadvantage: Government has no direct control over the MaaS platform and can only attempt to influence its direction, which may not be effective

Open Sourcer

• Let the market develop the MaaS platform and determine the terms and conditions. Open Government’s retail channels to third-parties and provide open, unified APIs to Government’s data

• Advantage: Government does not have to cover the costs of developing and providing MaaS (or transport service), and government does not have the administrative burden of managing the mobility ecosystem

• Disadvantage: No control or influence over the MaaS platform, which could result in multiple completing platforms, customers being taken advantage of, customers not receiving the best possible mobility experience, and the full benefits of MaaS not being realised

Commercial Approach for the Queenstown and Auckland Pilot

NZTA is partnering with Machine Zone Inc. for a 12 month trial. Machine Zone will provide access to their existing core platform, which is capable of integrating data sources and provide open access to the data.

The front-end app development and payments engine will be left to mobility providers and third-parties to resolve.

NZTA is also developing relationships with key players to facilitate and enable the development of the platform, such as Auckland Airport, Air New Zealand and on-demand providers. This positioning creates several key advantages that mitigate a number of disadvantages:

• Partner with the supplier that is best suited to create the core MaaS platform • Distributes the development costs and responsibility for creating the front-end app and

payment engines • Expedites the development and implementation of the MaaS platform in a commercially

oriented manner

• Gives NZTA the highest level of influence over the MaaS back-office platform, which ensures that customers receive the desired mobility experience and that platform fidelity is maintained

• Only being responsible for the core MaaS platform gives NZTA has a lower management burden on the front-end interface with customers

• Allows NZTA to set the principles around open data management.

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BROADER CONSIDERATIONS

In addition to the quantified business case evaluation, there are some broader considerations including the qualitative benefits/costs and the risks associated with such a pilot that are yet to be quantified.

Data Policy, Privacy and Security

The platform for the mobility marketplace will, as a real-time computing environment, provide two basic types of functions, computing and data storage. Taking Open by Design and Privacy by Design22

approaches will also, by their nature, ensure that privacy or sharing requirements, as well as security requirements, will be considered throughout the pilot.

Data Policy

NZTA collects transport and transport related data in order to undertake its functions and responsibilities under the Land Transport Management Act. Personal information may only be collected and used if it is necessary to do so in order to carry out a lawful function of the Transport Agency. A Mobility as a Service market place will enable the efficient use and management of New Zealand’s key transport network.

Global standards for Intelligent Transport Systems (ITS) are under development through an EC, US and Australian agreement and high level principals have been agreed. As defined in the table below:

Principal Description Data provision conditions: Consent

The data subject (owner of the vehicle and/or through the use of the vehicle or nomadic devices) decides if data can be provided and to whom, including the concrete purpose for the use of the data (and hence for the identified service). There is always an opt-out option for end customers and data subjects. This is without prejudice to requirements of regulatory applications.

Fair and undistorted competition

Subject to prior consent of the data subject, all service providers should be in an equal, fair, reasonable and non-discriminatory position to offer services to the data subject.

Data privacy and data protection

There is a need for the data subject to have its vehicle and movement data protected for privacy reasons, and in the case of companies, for competition and/or security reasons.

Tamper-proof access and liability

Services making use of in-vehicle data and resources should not endanger the proper safe and secure functioning of the vehicles. In addition, the access to vehicle data and resources shall not impact the liability of vehicle manufacturers regarding the use of the vehicle.

Data economy

With the caveat that data protection provisions or specific technologic prescriptions are respected, standardised access favours interoperability between different applications, notably regulatory key applications, and facilitates the common use of same vehicle data and resources.

22 The seven Privacy by Design principles are: proactive and preventative; privacy as the default setting; privacy embedded into design; full functionality; end-to-end security (full lifecycle protection); visibility and transparency (keep it open); respect for user privacy (keep it user-centric).

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Requirements for the design of the NZ platform will follow these principals.

The pilot will follow the NZ Open Data Information Management principals of Open, Protected, Readily Available, Trusted and Authoritative, Well Managed, Reasonably Priced and Reuseable, as defined in the table below:

Principle Description

Open

Data and information held by government should be open for public access unless grounds for refusal or limitations exist under the Official Information Act, other legislation, or other government policy. In such cases they should be protected.

Protected Personal, confidential and classified data and information are protected.

Readily Available Open data and information are released proactively and without discrimination. They are discoverable and accessible and released online.

Trusted and Authoritative

Data and information support the purposes for which they were collected and are accurate, relevant, timely, consistent and without bias in that context. Where possible there is an identified authoritative single source.

Well Managed

Data and information held and owned by government:

• effectively belong to the New Zealand public

• are a core strategic asset held by government as a steward on behalf of the public; and

• should only be collected or generated for

• specified public policy, operational business, or legislative purposes.

Agencies are stewards of government-held data and information and must provide and require good practices which manage the data and information over their life-cycle, including catering for technological obsolescence and long-term preservation and access. Good practices also include collaborating with other agencies and the public, facilitating access, strengthening awareness, and supporting international cooperation.

Agency custodians must implement these practices on a day-to-day basis.

Reasonably Priced

Use and re-use of government held data and information is expected to be free. Charging for access is discouraged.

Pricing to cover the costs of dissemination is only appropriate where it can be clearly demonstrated that this pricing will not act as a barrier to the use or re-use of the data. If a charge is applied for access to data, it should be transparent, consistent, reasonable and the same cost to all requestors.

Reusable

Data and information released can be discovered, shared, used and re-used over time and through technology change. Copyright works are licensed for re-use and open access to and re-use of non-copyright materials is enabled, in accordance with the New Zealand Government Open Access and Licensing framework.

Data and information are released:

• at source, with the highest possible level of granularity

• in re-usable, machine-readable format

• with appropriate metadata; and

• in aggregate or modified forms if they cannot be released in their original state.

Data and information released in proprietary formats are also released in open, non-proprietary formats.

Digital rights technologies are not imposed on materials made available for re-use.

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Where possible, the platform will utilise pre-existing standards which preferably already have widespread adoption in order to build efficiencies such as greater interoperability in to the design.

Use of the platform will be dependent on the consent of users and open available reuse of data. This is likely to occur through a combination of supplier contracts and open licencing such as Creative Commons Attribution.

To the extent possible under current law, we will make data that NZTA own openly available for resuse under New Zealand Government Open Access Licence (NZGOAL), which aligns to Creative Common Attribution 4.0 International licence.23

Privacy

Recognising that privacy issues may arise as new services are considered for the platform the pilot environment will not initially be run with personal information.

The programme will have stage gates with Privacy Impact Assessments to ensure compliance with Privacy Act and will manage the progression of the pilot against these requirements at key milestones, for example the introduction of payment services. These stage gates will be built into the contract.

Any collection, storage, use, disclosure or deletion of personal information must be achieved in compliance with the Privacy Act 1993. Privacy by Design principles will apply (see footnote 1), to create an environment where privacy issues are determined and resolved at a very early point in each stage.

We will be clear with suppliers of future services of the Transport Agency’s responsibilities under the Privacy Act (including in relation to personal information held by third parties on behalf of the Transport Agency, and third parties’ own responsibilities) and will use contracts to manage access to the marketplace.

Security

The environment raises new security questions because multiple contributors are providing and accessing data in the platform and it will not be apparent for customers where the data is stored and processed.

It requires a foundational trust element that must, at a minimum, provide crypto-material that enables trust, both in the contents of messages, and the protection of data from unintended readers.

The platforms security requirements will be managed through a public key infrastructure (PKI) A PKI is comprised of the set of roles, policies, and procedures needed to create, manage, distribute, use, store, and revoke digital certificates and manage public-key encryption.

The design will be reviewed against the NZIC Protective Security Requirements (PSR) which outlines the government’s expectations for managing personnel, physical and information security. The NZTA PSR plan is a holistic risk based approach that will be updated at key milestones and evolve as future uses for the platform emerge.

The programme will have stage gates which will provide assurance and manage the progression of the work against these requirements at key milestones.

23 https://www.ict.govt.nz/guidance-and-resources/open-government/new-zealand-government-open-access-and-licensing-nzgoal-framework/nzgoal2/#principles.

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MaaS Queenstown and Auckland Airport Pilot Risks

Mobility as a Service via an open market place is untested globally, the approach of running a 12 month pilot will in itself, mitigate longer term risks as the development process will be iterative and Research and Evaluation will be run in parallel.

The high level risk and mitigations are captured below:

Risk Rating Mitigations

Reputational: Public do not experience a difference Loss of confidence due to Privacy or Security breach Government are seen to be over stepping their role

•

Active communication to manage perceptions and expectations.

Marketing programme to encourage participation in the pilot.

Monitor customer feedback and undertake benefits assessment in parallel.

Manage subsequent wider roll out and broader use with stage gates

Implement a public key infrastructure

Partner with Local Government and the Private Sector. For each component part, be clear about our role, what we are delivering and why and if applicable, when we will exit.

Commercial: Single point of failure due to dependency on a single provider with an “As a Service” model

•

Partner with a mature vendor and undertake due diligence.

Build vendor management capabilities to ensure outcomes are achieved and control over the road map is in place.

Separation of delivery of the Platform and ap providers

Fund the initial pilot ap and make available for broader use by developers.

Precedent Effect: Future services have the potential to raise significant policy issues, for example variable pricing

•

Early engagement with Ministry of Transport on a policy development

Monitoring and evaluation programme run in parallel.

Manage subsequent wider roll out and broader use with stage gates

IT Risk: We don’t have the capability within NZTA or current supply chain.

•

All non-real time data held in NZ meeting All of Government (AOG) Government CIO (GCIO) requirements

Machine Zone to provide specialist big data, AI, Real-time and Bot skills.

AOG GCIO to provide direct oversight as part of the project team.

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Benefits Realisation

With the appropriate preparation, the Auckland Airport MaaS pilot will help to progress the evidence discovery process necessary to progress to a detailed National MaaS business case. The pilot business case will need to establish customer feedback, both directly based on revealed preference behaviours and also from eliciting feedback as travellers experience the app. This will involve both the gathering of usage data (e.g. take-up rates, time using app, repeat use of app) and asking customers directly for feedback (e.g. star rating of the app, what they want to see from the app that it doesn’t currently do).

A Benefits Reaslisation Framework will be agreed with key stakeholders prior to the commencement of the pilot in order that the success of the pilot and subsequent detailed business case can be supported with a robust evidence base. An example of the questions that the MaaS pilot should answer is listed below:

• What are the attitudes to the next generation mobility trends (e.g. ride-sharing)? • What are customers willing to pay for a MaaS app?

• What is the likelihood of take-up of a MaaS app by different customer segments? How would customers use a MaaS app for mobility choices?

• What is the likely mode shift that occurs when customers use a mobility app that enables them to optimise their travel for multiple modes and for time, cost and preferences?

• Which mobility business and pricing models will customers prefer: pay-as-you-go, monthly subscription, or something else?

• What are the actual generalised journey costs – time and price paid – for door-to-door journeys in New Zealand?

• Will private mobility providers be receptive to participating in a mobility ecosystem (taxis, shuttles, ride-sharing, tolling, parking, etc.)?

• What are the regulatory hurdles that need to be overcome to introduce a national mobility ecosystem?

• Is the pilot solution expandable to a further pilot at Queenstown and then to a National solution?

Further New Zealand Inc Benefits and Costs

To progress to a detailed national business case for MaaS, the business case would need to be established on a significantly larger and more diverse set of journeys. There are also further benefits and costs that should be quantified (as far as possible) in a detailed business case. These include:

• Health benefits from an increase in active transport in end-to-end journeys, including the impact of providing “active credits” has on overall mobility

• Reduction in safety incidents from reduced private vehicles on road and higher vehicle occupancy (for both on-demand and public transport services)

• Marginal improvements in farebox cost recovery (non-redistribution effects) • Generated demand effects created through easy to use and accessible journey planning and

information • Changes in vehicle occupancy rates for a range of travel (not just airport or vacation related

mobility)

• Long-term versus short-term impacts on optimising fleet utilisation (i.e. running a public transport timetable that better meets the demand requirements for consumers)

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• The economic and financial redistributive/marginal impacts from a reduction in private vehicleownership and usage, including changes in vehicle registration revenues

• The benefits of improved understanding of return on asset/infrastructure investment, thatsupports future investment decision-making and improvements in long-term value–for-moneyfor the transport mobility ecosystem (e.g. in practice this could be removing the need forprimary customer research that would form inputs to the business cases)

• Enhancements in trade and social connectedness from removing accessibility barriers to usefor all customer segments and a range of geographic locations (e.g. the wider economicbenefits of MaaS to urban versus rural areas)

• The impact of MaaS on Airport employees, which has not been modelled primarily due touncertainty around mode shift (e.g. employees already have designated car spots). Theinclusion of airport employees in the business case represents a potential upside to the pilotbusiness case, which would increase the BCR

• The impacts on more efficient allocation of land use

A Research and Evaluation Framework will be agreed with key stakeholders prior to the commencement of the pilot in order that the pilot informs analysis of wider policy issues that will

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