Business Model Framework to Provide Heterogeneous Mobility Services
on Virtual Markets
Markus C. Beutel
1
, Christian Samsel
1
, Matthias Mensing
2
and Karl-Heinz Krempels
1
1
Information Systems, RWTH Aachen University, Aachen, Germany
2
Economic Geography of Services, RWTH Aachen University, Aachen, Germany
Keywords:
Virtual Market, Virtual Currency, Business Model, Mobility, Incentives.
Abstract:
Growing spontaneous mobility and decreasing affinity to automobile ownership in younger generations de-
mand for an integrated service for intermodal mobility. In areas with lacking coverage of traditional public
transportation, extending the coverage by integrating alternative services like car sharing, seems promising.
Because of the very different nature, the collaboration between traditional public transport and emerging mo-
bility services requires fundamental changes to business models. Current business models are designed under
the assumption of separation and competition, which contradicts the idea of collaboration. Therefore, arestruc-
turing of all main pillars of business models under the consideration of mutual interdependencies is required.
This work defines such business model pillars and contributes a business model framework for providing dif-
ferent mobility services on centralized virtual markets. Basis is a joint platform which enables collaboration
between multiple services to provide a collective intermodal mobility service to the customer.
1 INTRODUCTION
Currently, different means of transportation are usu-
ally seen as mutual exclusive alternatives, people
travel either by train or by bus. Global trends like de-
creasing importance of private automobile ownership
(Bentenrieder, 2010) and oil peak demand a changing
understanding of peoples transportation. To increas-
ing efficiency an integrated view of mobility services
is required. E.g, there are regions which are not cov-
ered by traditional public transport modes adequately,
alternatives like car sharing can close these gaps and,
in combination with traditional public transportation,
ensure service coverage. To offer a joint service con-
sisting of different modes to customer, an encompass-
ing business model, which sets incentives for users
to change their mobility behavior, is required. Be-
cause of its big potential concerning mobility service
coverage we focus especially on an incentive oriented
integration of car pooling.
Information Broker
This investigation prescinds from discussing the ad-
vantages and disadvantages of collaborative mobil-
ity service provision, but shows the required and op-
tional shifts in business models within this scenario.
Thus, the approach is based on the assumption of a
collaborating mobility provider network. The basis
for collaboration is a joint software system that cen-
trally bundles information of various mobility service
providers with diverse modalities. For the following,
we call this platform InformationBroker (IB). The In-
formation Broker is supposed to be operated by a third
party organization which does not offer mobility ser-
vices itself, to ensure undiscriminated system access.
The IB combines the information and services (e.g.,
train timetables, carsharing sites) of all involved mo-
bility service providers to generate the best possible
intermodal itineraries. In terms of technology we as-
sume this is realizable. General distributed architec-
tures, methods for data integration and routing algo-
rithms are well-known. One crucial aspect is the data
exchange between IB and mobility service providers.
This can be handled by existing protocols, e.g., SIRI
1
a protocol to allow exchange information about pub-
lic transport services and vehicles, standardized by
the CEN (European Committee for Standardization).
For sharing modes, e.g. carsharing, IXSI
2
(Interface
for X-Sharing Information) has been developed and
1
http://user47094.vs.easily.co.uk/siri/
2
http://ixsi-schnittstelle.de
145
Beutel M., Samsel C., Mensing M. and Krempels K..
Business Model Framework to Provide Heterogeneous Mobility Services on Virtual Markets.
DOI: 10.5220/0005118601450151
In Proceedings of the 11th International Conference on e-Business (ICE-B-2014), pages 145-151
ISBN: 978-989-758-043-7
Copyright
c
2014 SCITEPRESS (Science and Technology Publications, Lda.)
tested in project econnect Germany
3
.
There is already a variety of software systems that
integrate different modalities (Beutel and Krempels,
2014). 1 illustrates the extent of the IB, which is de-
scribed in this work compared to the existing software
DB Navigator/bahn.de by Deutsche Bahn AG
4
. The
IB includes modes like car pooling and additional ser-
vices, e.g., parking.
Electronic Ticketing
To offer a combined ticket for intermodal travel, a
technological realization is required. Currently, mul-
tiple standards for electronic tickets have been de-
veloped and deployed. Prominent examples are the
(((eTicket
5
, which is the de facto standard in Ger-
many, and Calypso
6
, which is in use in several Eu-
ropean cities. Currently a suppose-to-be continent
wide standard is being developed under the name IFM
Project
7
. Each of them is based on contact-free smart
cards. We suppose these electronic tickets are suit-
able for most, if not all, mobility modes and therefore
allow a combined ticket.
The remainder of this paper is structured as fol-
lows: 2 gives an overview over the theoretical back-
ground and previous work concerning business mod-
els and cooperation schemes. 3 defines business
model pillars for the context of providing mobility
services on virtual markets. Finally, 4 concludes work
and gives an outlook on future work.
2 BUSINESS MODEL THEORY
Reviewing the literature about the emergence of busi-
ness models with focus on e-business and informa-
tion system implementation, a large variety of dif-
ferent business model frameworks can be observed
(Timmers, 1998) (Osterwalder et al., 2005) (Silver,
2007). Most of previous studies focus on the value
creation process of Porter’s value chain logic and sep-
arate this process into “building blocks” (Osterwalder
et al., 2005) which can be identified in all organi-
zations. However, (Veit et al., 2014) conclude that
business models are dependent on the industry and
the context they are applied in. In the case of pro-
viding heterogeneous intermodal mobility modes via
3
http://www.econnect-germany.de
4
http://www.bahn.de/p/view/buchung/mobil/
dbnavigator.Shtml
5
http://www.eticket-deutschland.de
6
http://www.calypsonet-asso.org
7
http://www.ifm-project.eu
information systems, existing business models fail to
address key aspects in this context. Thus, we con-
centrate on essential parts of common business mod-
els and expand the understanding by introducing new
features to the existing logic of e-business models.
The ability to create value for the target customer
from products and services depends on the value
proposition the organization is willing or able to of-
fer and its ability and capacity to innovate and hence
to differentiate. The value proposition correlates with
the firms’ capability to offer better solutions meet-
ing customer needs in comparison to its competitors
(Johnson et al., 2008). Higher value proposition can
be achieved by customization of goods, lower prices
by reducing costs or provision of superior service to
the customer (Osterwalder et al., 2005). To effectively
deliver the value proposition offered to the customer,
the firm needs to define its geographical extent of the
market area, target customers and offered products to
delineate the value proposition from its competitors
(Afuah and Tucci, 2000). To ensure the delivery of
the value to the customer, the firm requires capabil-
ities organized in the value chain like value creating
activities, partner networks or resources.
To analyze key activities of companies provid-
ing mobility services we refer to the traditional value
chain model by (Porter, 1985) as it is the standard tool
used in academia and business. The value chain is a
method in strategic planning used to identify the com-
petitive advantage of firms. It focuses on the inves-
tigation of the critical activities connecting the sup-
ply and demand side of organizations and aims at an
understanding of their impacts on value and cost of
offered products. Activities of the value chain can
be organized internally within the firm or externally
by partners. The value chain concept also created a
framework for a value definition and comprehension
about the way value is created (Peppard and Rylander,
2006). The definition of value is simply the willing-
ness to pay for a productwhich is offeredvia the value
chain to the customer.
(Porter and Millar, 1985) come to the conclusion
that information systems “transform” the value chain
since they are present at all stages of value creat-
ing activities, but not as a potential source of value.
(Rayport and Sviokla, 1995) expand the understand-
ing of the role of information systems in value chain
modeling by developing the concept of “virtual value
chains”. Virtual value chains are based on informa-
tion accessibility. All activities facilitating the gather-
ing, organizing, selecting, synthesizing and distribut-
ing of information increase the effectiveness and ef-
ficiency of mediating between the traditional value
chain activities (Chaffey, 2009). Hence, information
ICE-B2014-InternationalConferenceone-Business
146
Legend
+
Train Bus Car/ Bike
Sharing
Car Pooling Parking
...
Provider B
Provider A
...
Provider B
Provider A
...
Provider B
Provider A
...
User A
One Ticket
Intermodal Routing
Market Place
Accounting
Currency Management
...
Provider B
Provider A
DB Navigator Extent
Information Broker Extent
Information
Broker (IB)
Figure 1: DB Navigator / bahn.de versus Information Broker Software Extent.
systems involving electronic commerce can add value
to the internal and external value chain.
The value chain model so far explained has been
a firm and product centric approach to determine the
underlying value adding activities of organizations.
(Stabell and Fjeldstad, 1998) argue that the traditional
value chain analysis cannot be applied to all types
of businesses. On the one hand value adding activ-
ities in, e.g., the generation of services are funda-
mentally different from the manufacturing of tangible
goods. On the other hand scholars realized that or-
ganizations are embedded in complex economic net-
works (Easton, 1992). Hence, Stabell and Fjeldstad
developed the “value network” as an extension of
Porter’s “value chains” incorporating the above men-
tioned shortcomings. This approach shifts the in-
vestigation perspective away from a resource based
view of the focal company to a more holistic view
of evaluating resource dependency, transaction costs
and actor-network relationships in the network of
the industry (Basole and Rouse, 2008). Value net-
works are composed of connected and interdependent
players. These players interact with the other mem-
bers of the network and their relationships have di-
rect consequences for the whole network performance
(H˚a kansson et al., 2009). Since the members of the
network have different assets and competences their
goal is to co-create value by collaboration. Hence,
value is created not from one firm but by an efficient
interplay of all members of the network (Vanhaver-
beke and Cloodt, 2006). In contrast to the value chain
logic competitive advantage is no longer created at the
single focal company but originates from the constel-
lation of the available value of the network partners
(Gomes-Casseres, 1994). The inter-firm relationships
can manifest in several forms, including alliances, eq-
uity investment, partnerships, joint ventures, consor-
tia, marketing agreements, licensing, supply agree-
ments and manufacturing agreements (Gulati et al.,
2000), (Podolny, 1998). The decision to agree to one
of the above mentioned relationships is strategically
(Doz and Hamel, 1998). Motives to join several rela-
tionships are: access to new markets, technology and
knowledge they need to innovate (Ahuja, 2000), the
reduction of external risk (Pfeffer and Nowak, 1976)
or regulatory requirements (Oliver, 1990). However,
collaboration can has its own risks, since all players
in the value network can act opportunistic, thus shar-
ing not the goal to maximize the overall value. Trust
is the fundamental condition for effective collabora-
tion in value networks (Faber et al., 2003). Earning
the trust of the costumer is another fundamental pillar
of the business model ontology proposed by (Oster-
walder et al., 2002). They refer to it as relationship
capital. Trust is especially important for service in-
dustries which operate in virtual spaces. (Jones et al.,
2000) developed trust requirements for e-business on
the foundation of the parameters of trust and de-
pendability. Fulfilling these requirements leads to
customer satisfaction and hence to customer loyalty
which is the foundation of every customer relation-
ship (Chaffey, 2009). Moreover most Frameworks
involve a product related block into their constructs
(Osterwalder et al., 2005). This element refers to the
overall value proposition offered by a company to-
wards their customers.
In fact there are manifold additional elements of
business model frameworks stated in the current liter-
ature, which have not crucial importance for this set-
ting. Against the special backgroundof providing het-
BusinessModelFrameworktoProvideHeterogeneousMobilityServicesonVirtualMarkets
147
erogeneous mobility modes on a centralized virtual
marketplace, it can be concluded that existing frame-
works doesn’t fit exactly to these conditions. This im-
plies the need to develop a new framework especially
for this context.
3 HETEROGENEOUS MOBILITY
MODE INTEGRATION BASED
ON INCENTIVE ORIENTED
BUSINESS MODELING
Information technology offers extensive strategic and
economic possibilities. It is creating new opportuni-
ties for margin enhancement, increased customer sat-
isfaction, capital efficiency, and agile organizational
behavior (Kagermann et al., 2010). Decision makers
have to consider new technological solutions that re-
shape existing business models (Teece, 2010). Partic-
ularly, the integration of diverging mobility modes via
information systems reshapes existing business mod-
els. The following part explains the shifts in compa-
nies business models and refers to related consolida-
tion projects.
3.1 Involvement
Actors can provide their mobility services on a cen-
tralized platform with different degree of involve-
ment. (Buchinger et al., 2013a) distinguished be-
tween an “independent partner scenario”, “interven-
ing partner scenario and an “open service platform
scenario”. The degree of involvement influences all
constitutive business model pillars in major part.
3.2 Activity Configuration
Activities to provide products or services are a major
part of business model concepts. In this context, the
IB influences activities, that are logistically essential
for delivering services to the customer in major part.
(Buchinger et al., 2013a) showed the influence of an
open software system scenario on infrastructure of ve-
hicle sharing providers activities. They distinguished
between service and infrastructure providers and in-
cluded a data layer. More precisely, they showed that
activities like user registration, reservation, billing,
clearing and authentication can be outsourced to an
information system. This system basically aggregates
the data.
3.3 Distribution Model
The product related aspects are a central part of busi-
ness models (Osterwalder et al., 2002) (Osterwalder
et al., 2005). This pillar is closely connected to this
topic, but the exact meaning is different. The distri-
bution model is the way, how mobility services can
be purchased by the customer on the information sys-
tem. The distribution method can be designed in sev-
eral ways: For example, the European project SU-
PERHUB
8
develops an open source platform to com-
bine heterogeneous mobility offers altogether in real
time. Additionally, the offering is going to be pro-
vided on an mobile app. SUPERHUB enables cus-
tomized multimodal routing and presents the com-
bined offering within a flexible best price solution.
In contrast to this, Seatz
9
travel network assistant of-
fers a distinction between the greenest, cheapest and
fastest traveling alternative. Moreover an IB offers
new possibilities for cooperation. The construct is in-
spired by contracts in the telecommunication sector:
based on frame contracts between participating mo-
bility providers, the system enables the offering of
combined multimodal ticket products. These prod-
uct bundles support the intention of integrating dif-
ferent mobility modes and set strong incentives to-
wards customers to get in touch with alternative mode
options. Because of the significant heterogeneity of
modes, it is difficult to establish a non restrictive “flat
rate model” for all modes. Therefore, a new portfolio
of products bundles has to be designed. The basis for
all product bundles form subscription contracts for the
usage of public transport modes. In addition this basis
has to be extended through subscriptions of commer-
cial vehicle sharing. In fact this creates a new ticket,
which sets incentives for intermodal travel behavior.
However, the integrationof modes like car pooling
into this concept is challenging. These modes usually
are paid by cash money. This circumstance requires a
solution based on information technology, which fa-
cilitates a centralized organization and enables the in-
tegration of car pooling - a virtual currency based pay-
ment mechanism.
3.4 Virtual Payment Mechanism
Virtual currencies originally are designed as loyalty
programs to bound customers to in-house services.
A modified strategy is the cooperation scheme, also
defined as coalition loyalty or cross loyalty, which
describes the facilitation of loyalty cards at multi-
ple, possibly competing, retailers (Buchinger et al.,
8
http://www.superhub-project.eu
9
http://http://www.seatznetwork.com/home/
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148
Public
transportation
Mobility
Modes
Virtual Currency Mangement
Customer
Car Sharing Car Pooling
Additional
services
Flexible Component
Product A
Product B
Product C
Product
Content
Virtual Currency
Mechanism
Virtual Currency flow
Cash flow
Legend
Subscription
Subscription
Component
Digital Wallet
Figure 2: Information Broker Business Model Pillar Con-
nection.
2013a). There are preceding considerations of im-
plementing a virtual payment mechanism as a part
of business models for this context (Buchinger et al.,
2013b). In contrast to these intentions of virtual cur-
rency mechanisms, it has the function to virtualize
the payment process of car pooling and integrate the
mode into the system. To foster the usage of car pool-
ing, this virtual currency mechanism has to be con-
structed with consideration of user preferences and
product conditions (Beutel and Krempels, 2014). It
allows to earn virtual currency amounts by provid-
ing vehicle sharing capacity and spend it towards
other transport modes under consideration of ticket
product portfolio characteristics and customer prefer-
ences. Hence, the virtual currency mechanism con-
centrates all mobility related transactions onto the in-
formation broker. This projects the fundamental idea
of coalition loyalty towards the collaborating mobility
provider base and creates additional value for the cus-
tomers. As described before, the establishment of a
virtual currency based payment mechanism is essen-
tial to integrate mobility modes like car pooling. The
cash payment of car pooling can be replaced by a vir-
tual currency payment to integrate the related trans-
actions into the IB system. Moreover, this payment
mechanism allows to extend the collaborative prod-
uct portfolio due to car pooling services. The “flat
rate” products can now be extended through quantita-
tively limited virtual currency amounts. 2 illustrates
the mechanism and possible product variations. Prod-
uct C is supposed to have the highest mode integration
as well as strongest incentive effect for mode switch-
ing. Crucially important for the mechanism design
is the implementation of a central wallet, which al-
lows to execute offline authentications with car pool-
ing users (Beutel and Krempels, 2014).
3.5 Financial Model
Applying an adequate and effective financial model,
consisting of a revenue model and a cost model, re-
sults in a sustainable flow of revenue, which guar-
antees the future engagement in all above described
activities. The revenue model describes the various
ways the company generates cash flow by “translating
the value it [the organization] offers to its customers
into money” (Dubosson-Torbayet al., 2002). The cost
structure refers to the sum of all resulting cost needed
to perform the activities required to create and deliver
the value proposition to the target customer (Oster-
walder et al., 2005). (Silver, 2007) refers to them as
the “capital requirements” needed to execute the busi-
ness model.
4 CONCLUSION
We contributed a business model framework for pro-
viding heterogeneous mobility services on an open
virtual marketplace, see 3. Business model frame-
works can be used for analyzing, understanding, shar-
ing, managing and patenting of business models (Os-
terwalder et al., 2005). In addition, its importance is
growing in a cooperativescenario of platform consoli-
dation: Insecurity, new environmental challenges and
transparent market conditions require a guide lining
framework for orientation.
Fundamentally, all components of the business
models are going to be determined by the degree of
involvement into the Information Broker system. The
main pillars are activity configuration, distribution
model, virtual payment mechanism and the financial
model. These pillars in turn, can be individually spec-
ified in more detail, as described before.
It is crucially important for business model design,
to consider the mutual interdependencies of the com-
ponents. For example, virtual payment design influ-
ences the distribution model, as well as the activity
configuration.
Future Work
Constitutive on this framework, concrete business
models have to be developed in the future, to enable
an efficient providing of heterogeneous mobility ser-
vices on a centralized software system. During this
work, it is possible to expand the framework due to
new insights. Moreover, it would be interesting to
BusinessModelFrameworktoProvideHeterogeneousMobilityServicesonVirtualMarkets
149
Involvement
Activity
Configuration
Distribution
Model
Virtual Payment
Mechanism
Financial Model
Business Model
Cost Structure
Revenue
Streams
Loyalty
Concept
Mode
Integration
Incentive
Regulation
Value Chain Best Price
Preference
Orientation
Multimodal
Tickets
Figure 3: Business Model Framework.
quantify the financial outcomes of the construct and
calibrate the business model accordingly.
ACKNOWLEDGEMENTS
This work was founded by German Federal Ministry
of Economics and Technology for project Mobility
Broker (01ME12135A).
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