Beyond COVID-19: will mobility stay the course or change lanes?

By Martin Cardell

EY Global Mobility Solutions Leader

Focused on business transformation. Passionate about cars and exploring the world.

7 minute read 29 Apr 2020

The COVID-19 pandemic has forced us all to drastically change our behaviors. As we recover, what will this mean for the mobility ecosystem?

All facets of our lives have been impacted due to the epidemic: at home, at work and in our leisure and travel time. Some of its impact on the transport and mobility sectors has been obvious and extreme – over 150 countries now have restrictions on air travel, and international air travel for all except for essential reasons has effectively ceased on major routes between the US, Europe and parts of Asia. As one beleaguered airline executive pointed out, it’s tough to run a business whose purpose is moving people, when so many of those people are no longer able to move.

In normally bustling major cities, streets and skies are eerily quiet: many shops are closed, and all means of domestic travel have been dramatically curtailed.

Among the few winners so far are delivery services, where demand for food, groceries and domestic supplies from customers stuck at home is booming.

What follows is a roundup of the major behavioral changes that are emerging in terms of how consumers think about and use mobility services. It’s the first of an ongoing series of articles that will explore the impact of COVID-19 on the sector, and what its effects may mean for mobility providers both large and small during the crisis and beyond.

In San Francisco, thanks to the 16 March Shelter-in-Place order, traffic on the Bay Area transit system dropped by 90%.

Working life

Public transport plummets

With approximately 25% of the global population under some form of lockdown, commuter numbers have collapsed. In China, passenger traffic at subway and rail stations fell by 82% in the immediate aftermath of government restrictions imposed on 25 January. In San Francisco, thanks to the 16 March Shelter-in-Place order, traffic on the Bay Area transit system dropped by 90%. Across Europe, mobility in 11 major cities is down to below 25% of pre-crisis levels, as measured by a commonly used travel app. The big question is: how quickly will public transport recover once restrictions are relaxed?

Shared mobility slowdown

Ride-sharing has taken a huge hit due to concerns over infection risk. Carpool services have been halted in many cities, or even completely suspended. The micromobility sector is particularly vulnerable to an extended crisis, not only due to its reliance on public transport to supply users of scooters and e-bikes, but also because many operators are startups that depend on investors’ capital. Since these mobility companies are mostly privately owned, government support is less likely to be forthcoming. This may lead to accelerated consolidation where some players fail outright, and others are acquired by more established rivals.

Private cars preferred

Although car usage is substantially down, those who do have access to a car and are still permitted to use it are likely to prefer it to other modes, because the car is perceived as a safe space and driving has a relatively low infection risk. Quiet roads also mean reduced congestion and faster journey times.

Business travel looks bleak

Even beyond the worst-hit regions, all methods of business travel have stopped, except for key workers engaged on essential journeys. The impact on airlines has been savage and looks likely to continue – hundreds of aircraft are lying idle, and tens of thousands of airline staff have been furloughed or laid off. Trade body IATA claims that global demand for air travel is down 70% and has estimated that the industry will require bailouts totaling US$150b–US$200b to survive the crisis. Will this be forthcoming, or will it prompt a major restructuring of the industry?

Virtual collaboration vibrant

By contrast, usage of online communications software has exploded – a popular videoconference app has recorded 200m daily users across March, up from 10m in December 2019. Businesses are discovering just how much work can be done remotely when there is no alternative. Will this new taste for virtual collaboration become permanent in the post COVID-19 world, or will physical meetings bounce back when we return to “business as usual”?


At home

Online retail ramps up

The challenges of social distancing in stores plus the numbers of people self-isolating means that online shopping for both groceries and domestic supplies has never been more popular. Food retailers are hiring thousands of additional delivery drivers, and an online retail giant is creating 100,000 new jobs in the US.

Autonomous logistics accelerates

While many autonomous vehicles have ceased testing self-driving passenger vehicles, COVID-19 is having the opposite effect in the logistics sector. Here the spike in demand for delivery services is prompting faster adoption of autonomous technology and drones. A Chinese company has deployed autonomous delivery vehicles on Beijing’s roads for the first time, while an e-commerce giant has been sending delivery robots to quarantine areas. In the US, the NHTSA recently exempted an autonomous delivery provider from federal safety standards to expedite the deployment of 5,000 robotic vehicles.

Telehealth transformation

A traditionally cautious approach to remote technology among doctors and clinicians is evaporating thanks to COVID-19. Online consultation systems are rapidly rolling out in France and the UK, protecting medics from the infection risk of face-to-face meetings while also removing the risk for patients to sit in potentially infectious waiting rooms. As more patients are diagnosed and treated remotely, the need for the delivery and collection of medicines, test samples and monitoring equipment will increase.

Leisure and travel

Holidays on hold – for now

With international travel restrictions from outright bans to extensive quarantine arrangements in place to some extent on every continent, foreign holidays are over for the time being. The direct impact on airlines is obvious, but indirect effects on associated services such as car hires, train and coach operators, are emerging as the anticipated supply of tourism dries up in many countries.

Eating in is the new eating out

In the face of mandated or voluntary closures, many restaurants have transitioned to providing take-out or delivery instead, either directly or through “no contact” delivery services set up by popular food delivery apps. Ride-sharing firms are also pivoting to this new boom in food delivery in order to compensate for the collapse in demand for their core services – for example, in China, a company has recently launched delivery services in 21 cities across the country.

Store and showroom shutdown

Marketing for big-ticket items such as cars and houses must now be done increasingly online via virtual reality tours and demos, and video streaming. This presents a substantial challenge to brands for whom physical display has traditionally been the main route to market. These brands will be looking to third-party expertise and capacity to help them deliver quickly and to better integrate digital and offline in future.

The ongoing efforts to control the spread of COVID-19, protect the function of health services and save lives amount to an unprecedented experiment in which huge chunks of the global economy have been deliberately and rapidly put into cold storage. A great deal depends on how well they survive the process, whether the eventual thaw is fast or slow and which new behavioral norms will become established in the pandemic’s wake. We’ll continue to explore these changes of behavior in this series, as we navigate through this uncertain time together.

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COVID-19 has forced us all to change their behavior in ways we could never have imagined, and the mobility industry may never be the same. In a post COVID-19 world, it will be interesting to see which of these behavior changes will become permanent, and which will not.

About this article

By Martin Cardell

EY Global Mobility Solutions Leader

Focused on business transformation. Passionate about cars and exploring the world.