Is Electric Transport as a Service (ETaaS) the future for fleet electrification?
The simplest approach to overcoming the barriers to fleet electrification could be for operators to transition away from ownership entirely and towards an Electric Transport as a Service model.
Fleet operators are already aware of the potential of electric vehicles: a reliable, clean and cost-effective alternative to diesel fleets. Many have already started their transition to electric vehicles across buses, delivery vans, public service vehicles and even refuse collection vehicles.
However, moving an entire fleet to electric is a significant change that not only requires hefty up-front investment but also introduces significant operational and financial uncertainties: around securing sufficient power, installing and maintaining charging infrastructure, replacing batteries, and keeping services reliable and both cost and energy efficient. There are several ways to overcome these barriers. But the simplest approach could be for operators to transition away from ownership entirely and towards an Electric Transport as a Service (ETaaS) model.
The ETaaS model gets to the heart of the purpose of a fleet, that of providing a transportation service for goods or people. The ’as a service’ model is in fact not entirely new, it has become a well-established model for other sectors, including rail and shipping. And in the consumer world the notion that ‘access’ beats ‘ownership’ is also not new – it has revolutionised the way we listen to music and watch films. The principle guiding it all is that the focus of the provider shifts from asset ownership and maintenance to delivering a service to customers.
In fleet terms, ETaaS means that operator no longer carry the financial risk, because they do not have the responsibility or the cost weighing on their minds and balance sheets. The operator retains responsibility for the customer experience, the driver and schedules for the vehicles. The rest is covered by the ETaaS provider as a comprehensive managed service as part of an ‘availability contract’. Put simply, the availability contract guarantees the availability to the operator of sufficient fully functional and charged vehicles to deliver the agreed transportation requirements.
This approach comes at a good time for the bus sector in particular, which is facing financial pressures from both sides: declining passenger revenues due to COVID and the high cost of replacing their internal combustion engine fleet to tackle air pollution and climate change.
What’s more, the ETaaS providers have an incentive to ensure the longevity of their assets, and they take responsibility for their disposal. It encourages the shift to a better system, the circular economy, which creates value through the better use of resources.
The ETaaS model will be both game changing and environmentally important. It will accelerate the adoption of electric vehicles for fleets. And it will help us all reach net zero and clean air sooner.
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