Public or private: transport after Covid-19

In 2019 (yes, we also remember this fondly) the UK Parliament passed legislation obliging the UK to achieve ‘net zero’ greenhouse gas emissions by 2050.

Transport accounts for around 28% of all UK greenhouse gas emissions (largest contributor)1.

In light of this fact, the UK government has pledged to publish its transport decarbonisation plan ahead of the annual UN Climate Change Conference, to be held in Glasgow later this year (if COVID-19 causes it). allow). The plan will essentially set out how the government intends to transform the movement of people and goods across the UK in order to achieve its commitment to net zero greenhouse gas emissions.

A core tenet of the transport decarbonization plan was to be an increased reliance on public transport and a corresponding decrease in the use of personal vehicles. A few months ago, speaking on the subject, Transport Secretary Grant Shapps said that “Public transport and active travel [have to] to be the natural first choice for our daily activities”.

However, just this week Mr Shapps urged the public not to “flow back” to public transport and instead encouraged the use of private vehicles, bicycles and walking.
The question is, even after the restrictions are lifted and the dust clears, will a return to habitual reliance on public transport in the UK be feasible? There seem to be a number of points that rather foreshadow an increase in private vehicle ownership.

Please turn on here

With “social distancing” being the new norm, it will be interesting to see if there will be lasting changes in public behavior as they relate to the use of public transport. The government may have an important job to do to regain the public’s confidence to use the busy (and often inevitably cramped) bus and train services after the crisis.

Assuming the government overcomes this hurdle and we see increased reliance on public transport in the long term, questions remain as to what will happen in the event of a future pandemic of a similar magnitude. We have all seen how important it is that ‘key workers’ can get to and from work safely. A system dependent on public transport may be more susceptible to the stress of future crises if key workers, on the front line of any struggle, cannot move freely and safely between work and home.

Rise of carpooling

On the other side of the coin, companies like Uber and other private “mobility-as-a-service” companies have contributed to a steady year-over-year increase in revenue in the private transport sector in the United States. UK – including carpooling and taxi services – reaching a total of around £8.9 billion2 turnover in 2019.

We expect this upward trend to continue as life returns to normal. This may be partly due to increased skepticism towards public transport, but also to a likely increase in supply in the sector; a potential cost reduction for the consumer. Using your own vehicle as a second source of income, in a flexible way, has always been one of Uber’s strong selling points with its drivers. With the economic and personal toll already rising for some in the UK, it would be surprising not to see more enjoying it as restrictions on movement are eased.

Opening sales channels

Traditionally, car sales have always taken place on site at a dealership. The shift to online retail is one area where the auto retail industry has traditionally lagged behind other consumer goods.

With a potential decline in public transport on the one hand, and the flexibility and convenience offered by online retailers on the other, online car sales platforms could benefit from the crisis.

Online retailers such as Cazoo and Buyeracar.co.uk have already adapted to changing customer needs. Vehicles are ordered online and delivered to the customer’s doorstep where contactless discounts are available for those who don’t want to risk coming into contact with others.

Buyacar.co.uk recently reported an increase in website traffic and sales, while Cazoo in its first 3 months of business generated over £20 million. Social distancing and wider consumer engagement with e-commerce during the ongoing lockdown could welcome the shift to online retail that the automotive industry has flirted with in recent years.

So what are the takeaways from all of this? Ultimately, these are very real points for the UK government to consider when developing its plan to decarbonise transport. If massive use of public transport is no longer a viable option, due to a change in public behavior, it may be time to increase public investment in zero-emission private vehicles. Otherwise, it is difficult to see how such a contribution to greenhouse gas emissions will be reduced.

1Based on figures published in 2018.

2 https://www.statista.com/outlook/368/156/ride-hailing-taxi/uk

Melvin Z. Madore