TaaS is an acronym for “Transportation as a Service.” The “as a service” term has been used as a suffix to denote an operational model in which a service provider delivers services using various technological tools to proffer modern solutions to ineffective business processes.
As a service term indicates that technological developments such as cloud computing/internet are being used to partially or completely automate a process or simply make it operate more efficiently than the world is traditionally used to.
“As a service” Model Types
Infrastructure as a Service refers to the use of computing infrastructure, which is managed over the internet to aid the product offerings of a business enterprise. They help provide back-end or underlying network infrastructure like location, server, data partitioning, storage, security, etc.
Platform as a Service is an application platform or a service that provides a platform for customers or users to interact, run or manage data without the complexities of physical infrastructure.
Software as a service model employs the use of computer software by customers on a licensing or subscription basis. In this model, users typically have to pay a fee to access particular data. This software can be web-hosted or built for installation on various devices.
In literal terms, ‘as a service’ can be interpreted as technologically infused and rendered for automation or efficiency.
Examples of traditional sectors now rendered as a service include:
Shopping as a Service
Many of us shop online these days. Brick and Mortar malls and stores are recording fewer walking customers. This has led to many of these stores jumping on the “as a service bandwagon”.
On the shopping scene, we have seen computer software deployed to enable us to place orders from the comfort of our rooms and have them delivered almost instantly.
Some platforms have also used artificial intelligence to identify and analyze users’ spending habits, income status, and demography to predict or suggest suitable items.
Some major shopping as a service outlets include Amazon, Boohoo, Asos, etc.
Entertainment as a Service
Entertainment services such as theatre, live bands, circus services, motion pictures, and distribution services have all experienced a sharp decline recently.
Most notably, Cinema attendance concerning the current population of the world today is down by about 85% compared to its peak in the late 1990s.
This is clearly due to the advent of Entertainment as a Service”.
Companies such as Netflix, Youtube, Vevo, Apple Music, and Tiktok have all devised several means to entertain the world using complex technological solutions in the form of software, cloud, or streaming services.
Transportation as a Service (TaaS)
Transportation today has not been left out of the technological revolution that has gripped the world over the last few decades. Many companies have come up with computer-based solutions to solve inefficiencies in various areas of the transportation sector.
Transportation as a service is sometimes called Mobility as a service.
Today, we have ride-sharing, ride-hailing, vehicle hire, location tracking, mapping, ticketing solutions, etc. All of these are tailored toward improving the efficiency of how we move people and commodities from one location to another.
We can now shift transportation from a supply-based sector into an on-demand service.
What is a TaaS Company?
A Transportation as a Service (TaaS) or Mobility as a Service (MaaS) Company is an organization whose main service or product offering involves improving transportation efficiency through computer infrastructure, platform, or software.
What is a TaaS Stock?
Transportation as a Service Stock refers to companies offering technology-based services in all areas of the transportation industry.
Notable TaaS Companies
The TaaS industry today is said to be worth over $5trillion. Some of the foremost TaaS companies today are Uber, Lyft, Waze, Didi, Drivy, Mobike, Scoot, GETT, Blablacar, and TESLA.
With a market capitalization of $800 Billion, TESLA is currently one of the largest companies in the world. The rapid rise of Uber also played a key role in attracting capital to the TaaS market.
Why Should You Invest in TaaS Stock?
1) Growth Prospects
Efficient transportation is a global need. Many cities around the world are suffering from the drawbacks of traffic congestion. TaaS offers a viable solution to this. Hence there is a prospect for more growth in the sector as these problems are currently far from solved.
2) Artificial Intelligence
There have been giant leaps of improvement in the TaaS sectors due to artificial intelligence, such as self-driving autonomous vehicles and accident prevention systems.
As more people begin to buy into these ideas, the profitability and value of TaaS stocks are bound to keep rising in the near future. Nowadays, even Vehicle Insurance companies in Canada use different technologies to try to predict incidences of loss and calculate appropriate premiums.
3) Clean Energy & Sustainability
A huge aspect of TaaS companies is their commitment to high-tech alternatives to fossil fuel burning. Many TaaS companies lean towards clean energy in their operations. Companies like Tesla are focused on building Electric Vehicles.
4) Industry Revolution
If you invest now in TaaS stock. You get to be one of the pioneers for massive changes in how the world operates as we know it. TaaS companies can achieve major changes, including urbanization, clean energy, and decongestion.
What Could Possibly Go Wrong? Downsides of TaaS Stocks
1) Capital crunch
TaaS companies involve huge capital outlay at the beginning of their operation. Companies often make huge losses before achieving a stable income stream in their first years. A liquidity crunch at a crucial period may lead to the demise of TaaS companies.
For example, TESLA almost ran out of cash several times during its early days. This makes it quite risky to invest in a TaaS company’s stock that is not yet well established.
Many TaaS companies simply offer products and services that are very similar or close substitutes.
While competition can be good for product improvement and innovation, it can lead to a classic state of antitrust, which creates a very dangerous scene for the players. If a company fails to keep up, it could effectively spell doom for its shareholders.
3) Privacy Piracy
TaaS companies, as with any digital-age platform, rely heavily on collecting large amounts of data about their users. Data such as, where users visits, their names, credit card details, phone call data, etc.
This leaves a big question mark on the integrity of TaaS Companies to keep these data private. Failure to do these could expose them to government sanctions and damaging lawsuits.
How to Trade TaaS Stock in Canada
TaaS stocks are available on all the notable stock exchanges globally. You can also trade TaaS stock with the aid of a dealer or intermediary platform such as Questrade. You might have to pay brokerage and other stock trading-related fees.
TaaS Stock Prediction/ Market Watch
The fortunes of TaaS companies are affected by many factors. Some of the factors expected to have a significant effect on the industry over the next few years are outlined below:
More investment in R&D expenditure is expected in the TaaS circle. This is expected to yield solid long-term results and drastically improve efficiency.
Due to competition, companies keep making large investments in Research and Development to find new ways to stay ahead of their peers in the market.
Mergers & Acquisition
Future mergers and acquisitions in the TaaS industry. This will reduce completion, and gains from Economies of scale will enable companies to operate more efficiently to increase stock value.
Mergers can serve as a way to solidify backward & forward linkages between companies offering complimenting products. Creating a vehicle for them to come under a single management team.
This can yield many gains, such as quick decision-making and a larger scale of operation.
Acquisition of a firm by a bigger or more successful one can save the firm from bankruptcy and keep its vision going, albeit under new management.
Favorable Government Policy
Due to the many gains that the industry poses for humanity, most notably clean energy, it is expected that governments across the world will offer favorable policies and tax breaks for TaaS companies which will ease operations, increase profitability and boost stock value.
Developing countries with relatively underdeveloped transportation networks may also decide to enact friendly policies to entice TaaS companies to set up shops in their countries in a bid to solve some of their transport challenges.
Fall of the Traditional Players
The fortunes of traditional players in the transportation industry are expected to take a negative turn in the nearest future as TaaS companies march on to prominence.
Many cities are eyeing clean energy and road de-congestion. Hence Oil & Gas companies and traditional vehicle retail firms are expected to see their patronage drop drastically over the next few years.
Transport as a Service is both now and the future. The overwhelming verdict is that the best time to invest in TaaS Stock was yesterday.
Ready to start trading TaaS stocks? We recommend Questrade. Questrade is an online independent discount broker with a low minimum investment requirement, commission, and trading fee that has been servicing Canadians since 1999.