Public or private: transport after COVID-19

Back in 2019 (yes, we remember it fondly as well), the UK Parliament passed a law requiring the UK to achieve 'net zero' greenhouse gas emissions by 2050.

Transportation accounts for roughly 28% of all greenhouse gas emissions in the UK (the largest single contributor)¹.

In light of this fact, the UK Government has committed to publishing its Transport Decarbonisation Plan prior to UN's annual climate change conference, to be held in Glasgow later this year (COVID-19 permitting). The plan will, in essence, set out how the government intends to transform the movement of people and goods across the UK in order to reach its net zero greenhouse gas commitment.

One core tenet of the Transport Decarbonisation Plan was expected to be an increased reliance on public transport, and corresponding decrease in the use of personal vehicles. A few months ago, when speaking on the topic, Transport Secretary, Grant Shapps, stated that "Public transport and active travel will [have to] be the natural first choice for our daily activities".

However, only this week, Mr Shapps urged the public not to “flood back” to public transport, and instead encouraged the use of private vehicles, bicycles, and walking.
The question is, even after the restrictions have been lifted and the dust has settled, will a return to the usual reliance on public transport in the UK be realisable? There seem to be a number of points that foreshadow a spike in private vehicle ownership instead.

All alight here please

With ‘social distancing’ being the new norm, it will be interesting to see whether there will be any lasting public behavioural changes insofar as they relate to the use of public transport. The government may have a significant task on its hands in regaining public confidence to use busy (and often, unavoidably cramped) bus and rail services after the crisis.

Assuming government does overcome that hurdle, and we do see an increased reliance on public transport in the long-term, questions remain about what will happen in the event of a future pandemic of similar scale. We have all seen how important it is that ‘key workers’ are able to get to and from work safely. A system reliant on public transport may be more susceptible to the stresses of future crises if key workers, the frontline of any fight, cannot move freely and safely between work and home.

Rise of ride-hailing

On the other side of the coin, the likes of Uber and other private ‘mobility-as-a-service’ companies have contributed to a steady year-on-year rise in revenues in the UK’s private transport sector - comprising ride-hailing and taxi services – reaching a total of c.£8.9bn² in revenue in 2019.

We would expect this upward trend to continue, when things life returns to business as usual. Part of this may be down to a heightened scepticism of public transport, but also to a likely increase in supply in the sector; a potential cost-cutter to the consumer. Using one’s own vehicle as a second source of income, in a flexible way, has always been one of Uber’s strong selling points to its drivers. With the economic and personal toll already mounting for some in the UK, it would be surprising not to see more taking advantage of this as restrictions on movement are loosened.

Opening sales channels

Traditionally, car sales have always taken place on-site at a dealership. The switch to online retail is an area in which the car sales industry has traditionally lagged behind other consumer goods.

With a potential decline in public transport on the one hand, and the flexibility and convenience that online retailers offer on the other, online car sales platforms could be a beneficiary of the crisis.

Online retailers such as Cazoo and Buyeracar.co.uk have already adapted to changing customer needs. Vehicles are ordered online and are delivered to the customer’s door where contactless handovers are available for those not wanting to risk coming into contact with others.

Buyacar.co.uk has recently reported an increase in website traffic and sales, whilst Cazoo, in just its first 3 months of trading, has turned over more than £20m. Social distancing, and a wider-consumer engagement with e-commerce during the ongoing lockdown, may hail the switch to online retail that the automotive industry has flirted with in recent years.

So, what are the take-aways from all of this? When all is said and done, these are very real points that the UK Government will have to consider when putting together its Transport Decarbonisation Plan. If the mass use of public transport is no longer a viable option, due to a change in public behaviour, perhaps it is time to increase government investment into zero-emission private vehicles instead. Otherwise, it is hard to see how such a large contribution to greenhouse gas emission will be cut.

¹Based on 2018 published figures.

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