Post-COVID Mobility and Electrification (And a European Perspective)

Post-COVID Mobility and Electrification (And a European Perspective)

By Lukas Neckermann
September 2020

COVID has brought about many changes related to mobility and electrification. The types of vehicles we choose, the ways we use them and the overall need for various types of vehicles have changed. COVID has also accelerated the use of alternate mobility options across the world, especially in cities, impacting behaviors, number of miles driven and destinations. There’s no doubt such changes will have long-lasting impacts across the fleet industry, which will continue to evolve along with the post-pandemic business landscape, and it has accelerated the use of alternate mobility options across the world.

One such trend is remote work, which many tech, finance, and professional services companies already plan to continue into 2021… or even forever. This trend will have long-term impacts as companies of all types re-evaluate the need for employees to commute to offices on a daily basis, which is already leading to the cancellation of new office construction projects. A recent PwC survey on remote work revealed that work flexibility has broad support from both executives and office workers. Of the 1,200 US office workers surveyed, 72% said they’d like to work remotely at least two days per week, and 55% of executives interviewed expect to extend that option to staff, especially after experiencing increases in productivity and flexibility during the crisis.

Without the need to commute to offices daily, employees are exploring living and working in the suburbs, as evidenced by booming home sales across both the US and the UK). This migration out of some cities will leave behind a transport infrastructure still designed for local commuting and global travel.

Public transport and ride-hailing companies have already been hit hard by the pandemic, and this downturn will very likely persist into the future. Transit ridership has fallen by more than 70% in cities like New York, Boston, Washington D.C., and the Bay Area. ABI Research projects a 70% drop in demand for Uber and Lyft rides over the course of 2020. Transit relies heavily on commuting, and ride-hailing is popular among travelers. Both activities will likely take at least a year (or even three) to fully recover, and will likely evolve during that time.

Commuting, Revised Edition

Whether it’s daily, or perhaps now only on a few days per week, employees are easing into new commuting patterns. For those beginning to return to offices, many are opting to drive cars, as opposed to using transit, perhaps following early CDC guidance to avoid public transport. However, the fear of public transit is not being borne out by research, as this article co-authored by Janette Sadik-Khan, former commissioner of NYC’s DoT, points out. Despite widespread fears, there have been virtually no cases of coronavirus spread by public-transport anywhere in the world. Although the CDC has since revised its guidance, a lot of economic damage has already been done to transit agencies.

One trend that has resulted from downturns in public transportation is an increase in novel alternatives to traditionally scheduled bus services. Even pre-COVID, Seattle, Arlington (Texas), West Sacramento, and many cities across Europe had already begun implementing on-demand shuttles for lower-density, “difficult-to-reach” areas. Among the leaders in such on-demand pooled services is ViaVan. According to Chris Snyder, ViaVan’s CEO, “Technology has the power to expand equitable access to public transportation in both urban and rural areas.” He adds, “We are already working with cities across the globe to introduce flexible and dynamic shared solutions at a rapid pace." ViaVan launched services in multiple cities in Germany, Spain, and the UK during the lockdowns.

Carsharing is another alternative that has boomed as a result of the decline in public transport. “Riders in New York City and the Bay Area reported Zipcar being booked out weeks in advance,” and hundreds of vehicles are being added to shared mobility fleets.

Post COVID Mobility Across the Pond

Across the pond, as James Taylor, ZipCar’s General Manager UK notes, “With concerns around the pandemic continuing, members are looking for alternatives to public transport and transport options where they can control their environment. With extra cleaning protocols we’ve put in place, members are showing they are comfortable with carsharing. In August for example, we’ve seen a 14% increase year-on-year in our roundtrip bookings.”

This increase in carsharing isn’t limited to leisure trips or errands, two types of trips that have always been popular. In France, the government has accelerated its creation of a recommended “sustainable mobility allowance” of around $500 per employee during the crisis. Companies are being advised to encourage employees to commute “in a shared vehicle (carpooling) or even by using electric, hybrid or hydrogen vehicle,” or even by bicycle. In London, rentals of the commuter-oriented, pay-per-use “Santander Bikes” almost doubled in June 2020 (vs. 2019).

According to Chris Jackson, Head of Fleet Partnerships at UK energy company Centrica, “Under normal circumstances, as an employer, we encourage lift sharing across our estate by dedicating the most sought-after spaces for those who share. We also have a cycle to work schemes and provide shared transportation in many of our offices to encourage people to use local train services.”

Electric on Two Wheels and Four

While far-fetched for most Americans, bicycling to work has soared across Europe, especially as easy-to-ride, electric-assisted bicycles (e-bikes) become more available. Year-on-year sales of e-bikes more than doubled to over 2.1 million in Germany during the pandemic, outselling new cars by over 50%. In Ireland, salaried employees can receive up to $1,750 in tax-breaks for buying an e-bike. This is a trend that certainly could spread to the US: according to the US Department of Transportation, 68% of commutes are less than 15 miles – a distance easily and comfortably covered by e-bikes.

Usage of shared e-scooters also spiked. According to a survey by Lime, almost 50% of Londoners and almost 30% of Berliners now intend to use shared e-scooters, a significant increase from pre-COVID levels.
When it comes to electrification, it’s not just e-bikes and e-scooters that have seen an increase in adoption in Europe. While regular car sales have lagged, BEVs and PHEVs have surged, hitting 18% of the total European passenger car market in July (up from 7.5% in July 2019). Even in car-obsessed Germany, 13.2% of new cars sold in August 2020 came with a plug. In Sweden, it’s over 25%. A combination of greater availability and usability of EVs, as well as tax changes have driven the change. Bank of America Merrill Lynch recently summarised tax changes in the UK,  in its report, “Why your next company car is probably electric”: “UK tax changes make EV company cars exempt from tax to employees from 2020; combustion engine cars to cost 15–22x more vs EVs.”

Centrica’s Jackson asserts, “COVID hasn’t slowed our ambitions with regards to sustainability and our commitment to EV. We also recently made the largest order of electric commercial vehicles in the UK.”

“COVID has caused many EV strategies to be re-thought and we are seeing a swing away from traditional workplace and depot charging. Increasingly businesses are encouraging and subsidizing home charging; while in the medium term it’s likely that we’ll see an upsurge in businesses working together to provide shared charging assets, giving fleet managers more control and making on the road charging more convenient and cost-effective for all parties.”

Post-COVID, it seems that vehicle electrification and alternatives to mobility will continue to be increasingly popular trends as people return to the office – at least in Europe.