“It’s not about what it is, it’s about what it can become” Dr. Seuss

During the past couple of months, people were encouraged or forced to shelter at home and other lockdown restrictions were put in place. This resulted in a steep decline in demand for all available mobility and transportation options across the globe. The total vehicle miles traveled for business or private reasons with personal cars, public transit or shared mobility plunged.

Stakeholders of the mobility ecosystem are facing a situation never experienced before: According to data published by Apple or Transit, public transit has seen the biggest drop, with ridership declines between 70% to 90% in many markets across the globe. Micro mobility services suspended operations, e.g. players like Lime paused the service in up to 90% of all markets.The demand for carsharing, ride hailing and pooling also plunged, pooling was suspended on many platforms. On the bright side, there was a steep uptake on active mobility like walking and biking.

Customers have been adjusting fairly well to stay-at-home directives with the majority of people staying at home and only going out for necessities or to work. These days, the impression is that shared mobility is helping more and more people to get around when they need to. This comes after a first wave of skepticism and lockdown orders by cities or municipalities that categorized shared mobility as “non-essential”. The trust in the services was also rebuilt by the range of responses from service operators to address cleanliness concerns and to address the new demand patterns.

This post will explore:

  1. data collected from across the world
  2. discern patterns of what operators are doing right now
  3. how shared mobility will contribute during recovery

What will become of Shared Mobility? Handling COVID-19: Looking back and a way forward

Summary of measures by shared mobility providers during the crisis

As the rest of the economy, also shared mobility providers were shocked by the impact and consequences of the COVID-19 crisis and no provider was prepared for handling the situation. Private services in shared mobility space were laser-focused on growth and expansion and not handling a severe situation. In a dramatically changed environment that could be described as blind flying, operators responded with a pattern of activities. A database with approximately 250 responses can be found here

A high level analysis of the database shows a few clear trends: 

  1. The majority of measures were put in place during March and April when the pandemic went global. 
  2. 37% of measures focus on sanitization protocols and cleanliness standards. These were part of the first wave of measures focusing on operational best practices. 
  3. The second wave focused on adjustments in usage and demand patterns with 131 entries (63%). Regardless of geographical location, there is a strong pattern to support healthcare workers by providing free vehicles to them with over 40% data points focused on them. The other 60% focus on providing vehicles for free or at a discount to all essential workers (grocery clerks, police officers, bus drivers etc) or for all essential travel (eg medical and food deliveries). 

Before lockdown and shelter at home

The initial wave of measures was focused on fears triggered by COVID-19 focused on sanitization protocols. The majority of shared mobility operators communicated what measures were in place or were initiated to ensure safe cleanliness standards of vehicles and riders/drivers. That was often before corporations put “work-from-home” programs in place or governments communicated lockdowns so before the big drop in demand.

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Car sharing providers across the globe communicated that the frequency of cleaning was increased, as well as equipment like sanitizer wipes and disinfection is provided in the vehicles. Measure in ride hailing and pooling reached from encouraging drivers to increase cleaning frequency to eliminating pooled services.

During lockdown and work from home

Service providers saw the hit on demand after people were forced to stay at home, basically over night. Booked trips for shared service like car or scooter sharing as well as ride sharing requests felt off the cliff when customers were forced to stay at home. Public transit so far hasn’t recovered from the initial shock, but most shared mobility providers stabilized at a lower level. With vehicles being used for essential trips only, different utilization patterns could be seen across different markets and verticals.

Offering services for essential workers

Services across all verticals and markets initiated and communicated campaigns to offer mobility to essential workers and social initiatives. The support was very welcomed by groups like healthcare, grocery and law enforcement staff. On the other side, service providers also used it as a tool to engage with customers and media. Tier Mobility, a micro mobility player based in Berlin, said in mid April that it handed out more than 33.000 rides and 500.000 free minutes to essential workers across different markets in Europe. Ekar, the biggest carshare organization in the Middle East told the taskforce that its fleet use increased from 10% after the initial shock to 50% when usage was given at a discount to essential workers. 

Reducing cost lines

Behind the surface, companies across all verticals started to focus on extending their financial run-ways by finding and implementing cost reduction measures. This can be anything from adjusting the size of the workforce to cutting marketing spend or to canceling contracts with 3rd party services that were used for all parts of the business. Also most of the services paused or canceled their launch and expansion plans due to increased cost pressure and uncertainty about market developments.

Companies like Uber, Bird, Lime, Lyft and many others announced layoffs of up to 30% of the workforce and freezed hiring. Employees were also furloughed or put under state managed work-sharing unemployment protection schemes like “Kurzarbeit” in Germany.

Planned performance and out of home marketing campaigns were stopped or postponed Tasks like managing performance marketing, creating visuals or customer care moved from contracting 3rd parties to internal employees. This could be also seen as positive for the services, as employees are getting closer to the core values and daily challenges of the business and their customers.

Exploring new business opportunities

Services started to experiment with new business opportunities once their main service was hit by the decreasing demand. Yet while personal mobility demand plummeted, delivery was up across all markets. So naturally, moving into the delivery business was one of the key opportunities for services across markets and verticals.

Big ride hailing platforms like Uber, Grab or Careem pivoted their services towards deliveries for groceries, meals, medicals and other goods. As a lot of people are staying at home and shops/restaurants are closed, the demand for “quick-commerce” increased. As the ride hailing business collapsed by 70% and more, drivers faced a very challenging situation with steady costs but very limited revenue. A move into delivery was seen as a solution for both sides of the marketplaces – users have more choice to fulfill their delivery needs and drivers get the opportunity to improve the income situation.

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Asset heavy services, like shared micro mobility or car sharing also adjusted their offerings to increase their stake in the delivery business. Fleets were made available for delivery drivers by offering attractive day, weekly or monthly rates. Partnerships with delivery platforms were initiated to promote the offerings to drivers.

Shared mobility will play a crucial role on the road to recovery

Once lockdowns and other restrictions are lifted, commuting and traveling will come back but patterns may not recover to their pre-COVID-19 state. Already published customer survey results and reports provide an idea how the pattern shift could look like.

Citizens are still unsettled about the short and medium term consequences of the crisis. While some cities and countries are considering loosening some of the lockdown measures, it is unclear when employees will go back to offices and when a vaccine against the virus would be available.

Safety is one of the biggest concerns for users when going from A to B and service providers still need to address physical distancing and sanitizing protocols. Public and private services need to build trust by implementing measures that enable physical distance of users, contactless entry/exit and a higher cleanliness level of the vehicles used. Customers appreciate transparent and constant communication of the measures in place. Service providers could use technology, such as in-app icons to show the last cleaning, but it is recommended that more traditional communication measures are taken as well.

Micro mobility operators are back in launch mode

Micro mobility services in Europe are back to launch mode. Providers like Wind, Voi, Tier or Dott are launching new cities or verticals. Tier rolled out a fleet of mopeds in Berlin to become a multimodal micro mobility app. Dott is ramping up activities in Poland and Voi launched in the city of Trondheim. 

In the US, Spin restarted the service in several markets, roughly six weeks after the service was suspended. In some cities the fleet is reduced and the situation is closely monitored by Spin and the local authorities. Seems that SPIN is taking the advantage of paralysed competitors like Lime and Bird. Similar stories could be seen with Tier and VOI in Europe. Local services try to leverage the absence of their American counterparts.

Recovery of shared services

The demand curve of Mobje, a car sharing service by FAW-VW in China, could give an idea for how long the demand recovery could take. Demand started to decrease mid-January, after lockdown measures were put in place and the lowest point was reached a month later in mid-February. Demand picked up again and it took until early April to reach pre-crisis levels.

WeShare car sharing from Volkswagen published data points on demand by comparing it to the Apple Mobility Trend Reports. Demand line is above the driving trends in Berlin, indicating that users are valuing the availability of the service.

Ride hailing platform Lyft also mentioned during the Q1 earnings call that it sees week on week user growth since mid April in North America – still coming from a very low level as demand dropped by up to 75% basically over night. 

Capacity of public transit in many markets will be reduced due to social distancing and prevention measures. So cities and transit authorities need to find ways to increase capacity of the transport system without risking a gridlock. Risking that public transit users are switching to car based single occupancy transportation is not sustainable. Private and public services would need to find creative ways to work together, by utilizing idle capacity and also by linking different options in a smart way.

The TfL in London predicts that the capacity would be down to 20% of the pre-crisis level and millions of rides would need to be done by other modes of transport. This provides an opportunity for shared mobility services. Micro mobility services could benefit – additional infrastructure is planned and bikes or scooters are often the fastest option to get from A to B. Countries or cities like London, Milan, Seattle and many others have announced plans to for an accelerated transformation of infrastructure. The image of micro mobility services might switch from nice-to-have to an essential service that keeps cities moving with limited risks for personal health.  

First collaborations between private and public operators could be seen in Portland or Hamburg. Hamburg contracted ride pooling service MOIA to complement public transit during night times. Portland reduced the fees for scooters, leading to a decrease of per minute pricing at SPIN. Microtransit Software-as-a-Service providers like Spare, TransLoc from Ford or Via Transportation are offering their knowledge and technology to public transit operators to establish safe and convenient options of public transit. 

Survey data to predict the future of shared mobility

Multiple organizations published data on the expected mobility behavior and modal split after the lockdown. 

The overall trends are that private car / single occupancy rides will increase. Public transit will suffer short and mid term by demand. Shared mobility is expected to see an increase of demand as well, depending on the markets, modes and measures implemented and communicated by operators. At the same time consumers  constrained with financial 

IPSOS asked US consumers about their post-crisis mobility behavior. Among those who previously drove their own vehicle, 68% will start using their car again immediately as much or more than before the crisis. Around 1 out of 4 will wait until they are sure it’s safe but plan to use about as much as they did before COVID-19. Only 9% said that they will use the car less than they did before the crisis. 

The picture looks different for consumers who relied on public transit before COVID-19. This group is dominated by “wait and see”. Only 28% will start using public transit again immediately as much or more than before the crisis. The majority (72%) will wait until they are sure it’s safe but plan to use about as much as they did before COVID-19 (41%) or will use public transit less than they did before (31%).

The IPSOS survey is drawing a similar picture for customers that previously used ride sharing services. No definition of ride sharing is provided, so it’s not fully clear if it’s related to pooled services only or also considering ride hailing and taxi. A share of 30% will start using ride sharing services again immediately as much or more than before the crisis. The majority (70%) will wait until they are sure it’s safe but plan to use about as much as they did before COVID-19 (42%) or will use public transit less than they did before (28%).

A report by Transit indicates that people without a choice are relying on public transit. Only 9% of surveyed public transit users have a car and 6% have access to one if they need one to drive. For the remaining 85%, busses and trains are the only option of transportation. People that are riding are largely essential workers with a low average household income – 70% make under $50.000 US a yeary.

The situation is still very dynamic but shared mobility services are way more optimistic about their future than a few weeks back.

Article written by Augustin Friedel, Volkswagen Intermodal Strategy and Sandra Phillips, Founder and CEO, movmi

Note: This article has not been endorsed or sponsored by any of the providers mentioned and there is no affiliation between movmi and them.

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