Is The Coronavirus The Transportation Industry’s Opportunity?

2020 has started off in nightmarish biblical proportions- droughts, fires, floods, and a pandemic virus that has gripped the planet. The response by governments, companies and communities over the COVID-19 pandemic has suddenly impacted our way of life and that of our local, regional and global transportation systems. The speed with which these impacts have been felt is significant as global airlines, national railways and local subway and bus systems experience free-fall declines in customers. The resulting pressure to reduce service or even shut down operations altogether has thrown the systems into worst-case scenarios and un-chartered territory. It also offers us a unique once-in-a-lifetime opportunity to re-imagine the transportation system and move it towards a more resilient, equitable and seamless experience.

Cities are the center of our economic life

Our way of life is based on physical interactions, we’re social creatures–it's how we’re built,  function and thrive. With more than half the world’s population living in cities, this is where we find the most opportunities to create ideas, exchange knowledge and celebrate unique cultures. With the concentration of people, ideas and the like, they are the powerhouses of our global economies. The pandemic’s origins and its hopeful eradication are likely an urban one. Historically, ancient cities and their markets have been the epicenters for social interaction and cultural and economic activity. They’re also where some of the public health issues have started from and society has generally taken those lessons to enact great social and public health advancements.  It is believed the COVID-19 virus started at a city “wet” market (i.e., a market selling animal products and fresh produce versus a “dry” market which sells clothes, art equipment, etc.) in Wuhan, a thriving metropolis in China’s rapidly urbanizing and industrial center.

Transportation the great enabler 

Transportation has enabled the great movements of people and things to create a global transport network that is making the world smaller each day.  The pandemic spread in a local-global-local transportation pattern. First with physical interactions in cities and towns via local transport networks then globally via international air travel and then again with locally on the other end. Governments responded with travel restrictions and bans to minimize that spread from country to country. They’ve also enacted domestic measures such as social distancing minimums (six feet or about two meters) from each other, shelter in place (stay at home and only go out if essential) or mandatory curfews and lockdowns (cannot go out without special permission).

These restrictions are an effort to “flatten the curve” meaning reduce and slow down the escalating infection and mortality rate in the community while giving the medical teams the time and capacity to prepare and adequately care for those most vulnerable. Density, a precursor of successful cities, is being argued by some as the reason for the spread. The issue isn't density, it’s the agility of the public response to the crisis that will determine containment and hopefully eradication in a city, suburb or rural area.

In transportation, we live with some very tragic numbers each year: 1.2 million people being killed on our streets by people driving and many more from vehicle air pollution. Recent comments about accepting these virus mortality numbers as a cost of doing business and comparing them to road fatalities are terrible analogies and no death should ever part of any business model. Every death is a system failure and the goal should always be zero.

Our way of life has been put on pause

Everything we do in our day to day way of life from going to work, education, shopping, restaurants, appointments, arts and culture, entertainment, celebrations, errands, that are accessed with various transportation networks are now being restricted or banned due to the virus. All major conferences, concerts, street fairs, parties and sports events and have been canceled or postponed. Places like markets are either limited access or are being strictly monitored.

We are all glued to the media nervously watching the global infection numbers rise and hearing how each region is being asked to stay home unless we are part of the essential workforce first responders (medical, utilities, public services, enforcement, supermarket and other critical supply chain providers, etc). All of a sudden super busy business travelers, bi-coastal travelers, hyper-scheduled parents and kids, and all out partygoers are grounded. If we can and do need to go outside, we are asked to keep our distance from each other and that’s going to be our new normal for the time being. It’s time for a pause.

Commute disrupted

Disruptions are impacting commuters differently depending on their job type. One of the biggest obsessions in the transportation industry is trying to solve congestion. It’s  the result of a finite amount of space or supply with too much demand causing delays for everyone.  I’ve long argued that transportation congestion is not an infrastructure capacity problem, it's a work culture issue. People whose work requires a computer and internet connection don’t need to go to the office every day. They do so because of outdated work culture and managers who organize their teams based on headcount, seats and desks. When these workers are required to drive to the office they are the root cause of most of the congestion in cities. They’re also the cause of public transit peak overcrowding and people in most regions spend at least 10 days of their lives commuting. For those that can (which is a lot of us), working from home frees up those commute hours to do other things and generally, people think that’s a good thing. 

Commute transportation managers have long argued that working from home is ideal option for this group as they are a large part of the urban economy and a slight shift can minimize congestion and overcrowding on the transportation networks. Our road infrastructure is designed around the two peaks-one in the morning and one in the evening albeit at a great cost. Parking also takes up most of land of most suburban office developments. By not having to travel reduces peak demand and supply of expensive new roadway and transit capacity freeing up space for everyone else that needs steady all-hours access. It also reduces the need for so much land-hungry parking. This is like flattening the curve for transportation supply and demand capacity. For these workers, this crisis has moved this from principle into practice. Managers who initially resisted these measures are now faced with the pressure to implement it company wide as work from home is becoming mandatory. Technologies like wifi and mobile-enabled video conferencing; cloud-based file sharing; collaboration and document management tools; have responded to the call. These platforms are seeing huge uptick in downloads and resulting swinging stock prices.

Working from home-some love it others don’t

Now a few weeks in, it seems that the office is not as critical as we thought for managing staff and existing client work. Managers and teams are starting to see how these measures can actually be better for everyone including the company. For families with kids at home this poses another set of challenges and I’m hearing all sorts of perspectives including hilarious kid and pet cameos mid-video chat. Some companies I’m working with are seeing that moving their operations to fully remote home work hasn’t been done before and was a reason for the resistance. Work phones as well as email have been intermittent until they could get their VPN (Virtual Private Networks) operational and stabilized. Also, new business development is generally more difficult to develop without that initial face-to-face meeting or previous relationship. With business-to-business travel restrictions that could be a key challenge for companies exploring new opportunities during this time.

For the designated essential workforce commuter, they still have to go to the worksite every day and many of them rely on each other's services to get in and out. For example, transportation and utilities staff provide the critical backbone service for many other essential workers to get to their jobs, care for those that are sick and deliver supplies. These commuters keep our systems and supply chains running, many are at risk of exposure and we owe a great debt of gratitude to them for their services as we can comfortably shelter in place.

All the other customer-facing services including but not limited to food and beverage services, retail,  arts, culture and entertainment, etc. are being asked to close or strictly limit access to the public. Some of these businesses are allowed to provide delivery, which is mostly performed by gig workers keeping things moving. Most of these workers have essentially been locked out of work and many have vulnerable employment and housing agreements.

Transportation industry impacts

The COVID-19 impact to our economy and the transportation system that enables it sounds like and is a nightmare scenario. The transportation manufacturing industry from autos,  airlines and other vehicles were already experiencing flat or lower unit sales prior to this crisis. According to the commercial airlines’ announcements they’re preparing for a huge drop in passenger revenues and it turn cutting or eliminating domestic and global capacity. As oil prices free-fall, demand for fuel and electric vehicles may follow suit necessitating another bailout to the auto industry. And while the logistics industry is working to move goods, overall economic demand will see a drop in the coming months.

Urban transportation impacts are mixed

For cities the issue is more acute. Restricting local economic activity means less local taxes, fees and fines to pay for the operations, maintenance and expansion of our already expensive road transport systems. This pandemic will require us to address some truths about how we currently subsidize and operate a fractured and fragmented urban transportation system that is inequitable, not coordinated or integrated and is unsustainable to operate and maintain, let alone expand. This makes it quite vulnerable to these kinds of shocks. We need to get real and rethink our broken transportation business models and be better at understanding what it truly costs (all of them) to move a person or a thing around our cities and what we are willing to pay for that so everyone can benefit ( next article on that coming soon!). As we dig a little deeper there is and will be a mixed set of impacts that will vary by region:

Driving: The work from home and shelter in place restrictions dramatically reduce the number of cars on the road resulting in a lot less fuel, paid parking, tolls and fewer fines. Most of these funds go to pay for expansion, maintenance and road repair, and some regions use a portion of these revenues to support the operations of their public transit systems. For those workers that need to drive and provide essential services, congestion is all but gone with some regions like mine seeing up to 50% reduction even with people shifting out of public transit. Travel times have been reduced for deliveries and goods movement. Post crisis- very few may want to go back to the highway commute grind if they don’t have to. That may mean less highway congestion at pre-crisis levels and less demand for expensive capacity expansion. As demand and traffic congestion are all but gone, the key focus now should be on maintenance and critical public transit service.

Public Transit: The dramatic and global drop in public transit patronage will further impact the ability of transit agencies to fund their services. Many have put in extra measures from disinfecting their rolling stock more often, protecting their drivers with the appropriate equipment, indicating where people should sit or not sit to keep the social distancing minimums while seated, and some have removed fare payment and front door boarding altogether to protect the driver. These measures aren't free and will have deep impacts on their already strained budgets. They will be faced with even harder choices over the next few months between providing essential coverage and reducing service frequency and service overall. Day and night coverage is most important as the essential workforce needs to get to work all hours of the day and night and that should be the priority of the service plan.

The pandemic raise old questions and some honest, needed reflection about the purpose and role of public transit as an essential public service–not a money-making enterprise. It also raises the question of what does public transit look like in a future that may not have the same peaks as before? In the US, Congress has included $25 Billion for transit as part of the historic $2 Trillion stimulus package which will ease some of the pain temporarily, but not solve the chronic issues with the industry. 

Shared Mobility: For the plethora of services like ride-hailing (Uber, Ola, Didi etc.), micromobility (bike share, kick scooter and moped companies), car share, on-demand shuttles and other services, the impacts have been extreme. Some systems in some regions are seeing a temporary spike in demand as people shift out of public transit, others are suspending or eliminating offerings as demand has evaporated overnight. As movement becomes restricted, ride-hailing is being asked to pause pooling for social distancing reasons. Several startup and legacy companies in the space had existing operational and financial business model issues raising the question of how long can they sustain these tough times. The next 90 days will be critical to the survival of these companies, and for those that make it through this period, a post crisis economic recovery could be a historic growth opportunity (more on this in my next article!).

Walking and Bicycling: Residents are going back to basics. They’re also pointing out to their city leaders that they have too narrow sidewalks and can’t maintain the minimum social distance when out. As cities are limiting access to the public transit system, some like Bogota, Colombia, New York City and others are using this opportunity to create emergency lanes by re-appropriating what are now empty roads and making space so that walking and cycling are the preferred way to get around. We’re seeing sales for personal micromobility grow as people buy their own devices to get around.

Deliveries: E-commerce deliveries were growing at a rapid clip prior to the pandemic and now even higher demand as shelter in place restrictions are put in place. Amazon and Instacart alone need almost 400,000 people to meet the growing delivery demands. Ridehailing companies have pivoted as drivers shift from moving people to delivering food and products. As people stay home and can’t go out, they will be demanding more of their e-commerce and local food venues to deliver. Some cities are responding by allocating more space at the curb for these delivery services to keep access while maintaining social distancing. It’s not yet clear how these services will manage over time but these allocations will help set the groundwork for more curb space management in the near future.

Is there an upside to all this?

While the restrictions have serious and material impacts to our workforce, transportation, and economy, there may be some temporary upsides that could endure. For the first time, we are experiencing a global and dramatic reduction in traffic congestion, air pollution and greenhouse gas emissions from transportation. We should also see lower numbers of traffic crashes and fatalities. It is by no means an ideal scenario even with the temporary upside and I can’t underscore enough how serious this is.

Is this crisis, the opportunity we’ve been waiting for?

So how do we learn from this? Is the pandemic an opportunity to rethink our transportation priorities? We shouldn’t have to choose between the economy, our lives and the planet. In transportation, we know it’s technically feasible and economically possible to make this a win-win, we just need to get our political mindset to shift our collective behavior and make the temporary upside permanent. 

We’re in the middle of one of the greatest if not most important “what if” transportation scenario experiments in well over a generation. This is our moment to use this as an opportunity to future proof our systems to be more flexible, equitable and resilient. The oil shocks of the 1970s required society to rethink the size and use of cars and their impacts to our cities with a greater push for vehicle efficiency and cleaner fuels. Most countries moved on and went back to the status quo, while some like the Netherlands, used that opportunity to redesign it’s road policies to focus on people not cars and prioritized the cheapest, quickest and easiest way to get around their cities and towns-mostly by bicycle linked with local and regional public transit. Since then they have become arguably the greenest and healthiest commuters on the planet while their economy thrived. Many cities will be the first to say we’re not like the Dutch cities, but in fact, most cities are- just the 1970s pre-shift version.

Our transportation system was already in transition, moving from privately owned, fossil fuel powered and person operated only model to various on-demand, shared, electric and (in future) automated models. This one-day-in-the-future ideal transportation state promises to fix all the negatives by creating a seamless experience reduces congestion and pollution, streets space freed up for more walking and cycling, new shared services and reduced crashes and fatalities and is sustainable to operate and maintain.

In some bizarre turn of events, our future ideal transportation scenario is being placed right in front of us. We don’t need to wait for the future to imagine what it is, we can see the potential right now. Transportation demand management planners who have worked really hard to get a few percentage shift from people to work from home suddenly see a 90% shift.  There is a growing number of cities with little or no congestion now that most professional services are working from home. Our essential services, goods movement and deliveries can now operate pickup and drop off and move freely without that congestion ensuring our stores are well stocked. When we don’t have anywhere near the number of cars on our streets we can clearly see how there is plenty of room for other modes like walking and bicycling which in many cities has grown dramatically since the social distancing measures.

Seize the moment

Our economy is and will take a huge hit for sure and it will be tempting to go back to the status quo transportation system which many will push for. However, governments, communities and companies can and should spend this time to see how we got here, what no longer works, and ask how might we re-organize our transportation pieces so that it is more resilient, seamless and works for everyone including our planet moving forward. 

Reboot transportation 2.0

We can use this time to step back, listen and learn from our communities and companies to determine how we can utilize more inclusive and supportive policies and technologies and not go back to the mess we had before this pause. This is the time to reset and reboot our transportation system and look at from the lens of people, culture and our new reality. That means design, experiment and use cheap and quick tactical materials to close the gaps for the bicycle, transit and carpool lane networks, and try out the shared mobility pick up and drop off zones, delivery and loading zones. It means update the outdated procurement and other processes, digitize curbs and bring other manual systems online to manage assets better. Have the meetings with the public and private operators to figure out that are the right partnerships moving forward to create that seamless experience. Use this breathing space to attend to the needed repairs, fill in the potholes and scope out the utility work, and basically anything that you know was hard to do before because there were just too many cars or any other reason that made it tough. It is also the time to think about how we create worksites for the implementation teams that are not only zero accidents, but zero infections too.

Post crisis when we start to recover people will slowly come back. If you have these new networks and spaces in-place people will utilize them and new travel behaviors will stick. ETA (my company) surveyed over 120 cities on six continents whose staff provided great transportation insights on their emerging mobility issues and needs. They all stated they were going to try to pursue several of these kinds of measures in some way and noted the difficulties of disrupting the status quo. This was before this pandemic hit so it will be interesting to see how many use this opportunity to try things out now (report coming out soon).

With the growing rate of system shocks from droughts, fires, floods and pandemics, things are going to be more disruptive from here on (our new normal). This is a rare opportunity of time for governments and companies to put in the necessary planning work to be better able to manage temporary shocks and sustain prolonged interruptions. Some of them have reached out for advice on how to manage the next 90 days and the year ahead and there is no one-size-fits-all approach but there are some hard decisions, revised assumptions and strategic steps that they all need to take to ensure they can come out of this better than before.

We have an opportunity on a global level to undo the wrongs of past transportation policies and practices and course-correct as we face other looming issues that will further impact transportation systems down the line. It may be the only time you get in your career to experiment and this widely and freely without the usual blockers. We can only hope that more of those in a position to lead will heed the call to action and seize this opportunity.