What is Transportation as a Service (TaaS) in the Context of Investing?

Posted on 01/14/2021

Even during the coronavirus lockdowns of 2020, many electric vehicle (EV) companies witnessed tremendous growth in their share price including NIO, Tesla Inc., and the controversial Nikola Corporation. Many investors are betting on the theme of Transportation as a Service (TaaS), similar to the concept of Software as a Service (SaaS). Driverless cars will be electric.

What is Transportation as a Service (TaaS)?

TaaS is the purchasing of miles, trips, and/or experiences for travel without owning the vehicle. These services could be sold in ways such as a periodic subscription or price per trip. The traditional characteristics of buying a conventional car such as maintenance, buying, financing, insurance, and the actual driving, would be impacted.

TaaS is sometimes referred to as Mobility as a Service (MaaS). However, MaaS focuses on the decreasing usage of personal car vehicles toward service-based transportation such as e-scooters, bike sharing, and ride share giants like Uber and Lyft. Apple (ticker: AAPL) is looking to get into the EV space and started working on “Project Titan” in 2014.

How to invest in Transportation as a Service?

Institutional investors are investing in TaaS by targeting early-stage companies, venture fund investing, and listed companies such as Tesla, Uber Technologies, Lyft, and other firms linked to the electric vehicle industry.

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