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COVID-19 and mobility: likely winners and losers

The coronavirus pandemic has impacted transportation the world over. From cars to trains, trams and buses: our use of the vehicles that had seemed quintessential to our daily routines for decades has been rapidly – and unforeseeably – disrupted. So, how will we move forward in the months and years to come? This crisis will create opportunities and urge us to rethink mobility to ensure smoother, greener ways of getting around in a post-COVID world.

In the midst of the coronavirus pandemic, the mobility ecosystem focused on ensuring safety and protecting lives. As the world started taking the first cautious steps toward easing restrictions, experts began developing and exploring scenarios on the future of mobility. Is this the end of traffic jams, congested cities and parking space stress? Will the bike become king? How will the fabric of our cities change? While opinions and approaches will undoubtedly differ between countries and even regions, the following key trends – and the resulting winners and losers – are indisputable.

 

1. We avoid public transport and shared mobility services

As many people prefer transport modes that reduce the risk of infection, public transport as well as the ride sharing industry (taxis, Uber, car sharing, etc.) have been hit particularly hard by COVID-19. The micromobility players – think shared bikes, e-scooters… – that were booming before the crisis have seen their businesses collapse.

As the pandemic continues, social distancing will continue to have a significant impact on mobility behavior and preferences. The public transport system will need a redesign (new seating arrangements, capacity limitations, enhanced cleaning protocols, etc.) to counter this crisis and regain the trust of commuters. Micromobility players will have to reinvent themselves. Moreover, COVID-19 may drive consolidation in the sector: the startups that were already vulnerable before the crisis may have difficulty surviving and be acquired by leaders like Lime and Bird.

70 – 90%
Public transit use has fallen by 70 to 90% in major cities across the world. [1]

 

2. Instead of public transport, we choose the safety of our cars

With private transportation seen as a way to reduce the risk of infection, there is a clear shift toward cars as the preferred mobility choice: people would rather spend an hour stuck in traffic than risk 30 minutes of exposure to crowds on a train, tram or bus or use an e-scooter that might be infected.

So, despite a huge decline in vehicle sales for the year 2020 (automotive sales in Europe are forecasted to drop by 14% in 2020 compared to 2019), the odds may be better for the auto industry in the coming years – depending, however, on the severity of the economic crisis caused by the corona pandemic.

Will we all drive electric vehicles in the near future? Read on to find out.

66%
of people in China preferred using private cars in March 2020 – up from 34% before the COVID-19 crisis. [2]

COVID-19 accelerates the shift to a cashless society

Growing number of people and business have stopped using paper money and coins for fear it could carry the virus.

 

3. We revert to private micromobility – especially the (e-)bike – for shorter trips

People who previously relied on public transport for shorter trips are switching to another mode, such as biking or walking – as it enables social distancing and helps them meet the minimum requirement for daily physical activity. In many cities – from Brussels, Paris and Milan to New York and Bogotá – leaders have freed up public space for pedestrians and cyclists to enable social distancing.

If these measures promote improvements, such as fewer accidents and less pollution, cities may decide to make them permanent. The (e-)bike sales surged to unprecedented levels around the world during the COVID-19 outbreak and private micromobility alternatives such as (e-)scooters have just as much potential, because they also provide a valuable solution to minimizing congestion and maintaining social distancing norms.

650 kms
Paris rolled out 650 kilometers of bicycle paths to ensure the safety of cyclists after the lockdown had eased. [3]

 

4. We’ve experienced the benefits of clean air – so is this the moment for electric cars?

Just before COVID-19 hit automotive OEMs, the next years were expected to be the tipping point in the success of electric vehicles (EV). Will the corona crisis break that momentum? We think it won’t. Because the lockdown drastically reduced the number of kilometers traveled as well as overall industrial activity, the air became significantly cleaner in cities around the globe: many analysts expect around a 20% decrease in transport emissions in 2020.

Therefore, many people hope that the automotive industry will keep investing in the electrification of transport. Beyond the environmental benefits, this might help car builders and suppliers recover, regain their investments in electrification and boost their growth. The support of responsible regulators will, of course, be key in this matter. While European countries and China seem committed to supporting EV adoption, sales are expected to shrink drastically in the US.

60%
Paris saw a 60% drop in NO2 emissions and a 20-30% improvement in air quality to reach a level never seen in the past 40 years. [4]

 

5. We increasingly buy online – even cars – and AVs may deliver our packages in the future

E-commerce has been growing steadily for some time, but since lockdown measures were taken, it has soared like never before. Many smaller stores that didn’t sell their goods online before the lockdown opened web shops. So, while consumers are expected to keep visiting brick-and-mortar stores, everyone has found their way to online shopping – and e-commerce is here to stay. Autonomous cargo transportation – in particular for the last miles – could help alleviate traffic congestion and release the pressure on delivery services and local logistics providers in the future.

Another important shift that is relevant for the mobility industry: the online sale of cars is on the rise. While car dealers doubted the feasibility of Tesla’s direct sales model, via virtual and digital shopping, the COVID-19 crisis has proven that consumers are also relying on the internet to test and configure their own cars. A thorough understanding of the user experience will be key for every e-commerce player to survive and thrive.

175,000
Amazon has hired 175,000+ new employees during the COVID-19 pandemic. [5]

Contactless payments: another COVID-19 winner

With consumers worrying about the health risks of handling coins and bank notes, the number of cashless transactions has risen exponentially during the coronavirus crisis. As many retailers have banned the use of cash in their stores, consumers willingly turned to cashless – and contactless – payments instead.

Now that they’ve experienced the convenience of contactless payments, consumers will want to embrace the concept wherever they have to pay. In parking lots, for example, cashless and ticketless parking – which enables customers to access and exit a parking facility using their bank card or credit card – has been on the rise for a while. Yet, forward-looking parking owners can take parking convenience and safety measures a step further: by enabling smooth entry and exit via automatic number plate recognition, smart rules and digital payments they can offer their customers an exceptional parking experience.

 

6. The future of work? We want to keep working from home

Governments around the world have imposed teleworking – if possible – as the norm in March 2020 to avoid the spread of the coronavirus. In Belgium, the number of remote workers quintupled. The rise of teleworking might be the most apparent trend of COVID-19. According to a survey[6] of 1,000 Belgian employees and bosses, 9 out of 10 Belgians would like to continue working from home up to three days a week. Remote working is likely to become a mainstream mode of working.

9/10
Belgian workers who worked remotely during the corona crisis would like to continue to do so up to 3 days a week

 

Conclusion: more flexibility is the new normal

If more people permanently work from home, the reduction in commutes will likely produce a long-term decrease in kilometers traveled. On the other hand, people who do commute to the office are more likely to use their own cars – or combine car use with biking the last few (busy) kilometers to work. All in all, the constant shift between office work and home work, between cars and bikes, scooters, etc. will require more flexibility in the management of mobility – from more flexible leasing and fleet contracts to more flexible car insurance and parking policies.

All in all, the constant shift between office work and home work, between cars and (e-)bikes, scooters, etc. will require more flexibility in the management of mobility.

 

  • profilepicturev2

    Co-author
    Benny Schaeken

Sources:

  1. McKinsey & Company (2020) – The impact of COVID-19 on future mobility solutions
  2. Ipsos (2020) – The impact of coronavirus to new car purchase in China
  3. Forbes (2020) – Paris to create 650 kilometers of pop-up corna cycleways
  4. Airparif (2020) - Impact des mesures de confinement
  5. Amazon (2020) – Amazon has hired 175,000 additional people
  6. Survey accountancy and business advisory firm BDO between 6 and 17 April 2020
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