We were in the midst of a mobility revolution where technology was starting to provide innovative solutions which could transform the future of urban mobility.
The shift towards shared mobility and ubiquitous solutions to burgeoning growth in traffic and congestion across major cities was encouraging signs for the industry which attracted more than $120 bn investments in startups over the last 36 months.
Connected Mobility has been the buzzword in the industry for quite some time now and has the potential to revolutionize the future of mobility. We have seen the spurt of growth across multiple shared mobility models in the last five years beyond the ride-hailing services. Alternate sharing models such as car leasing, car rentals, fleet management and pooled mobility had started to create disruption across the industry. These new forms of shared and connected mobility supplemented the public transit system which was overburdened and provided a viable alternative for commuting and urban travel.
While User economics were being monitored and with growing exponential scale made unit economics of leading ride-sharing companies profitable for the first time thereby drawing higher interest across investors in the industry. The fundamental value proposition for mobility service mainly depends on user economics, environmental health and consumer interest which needs to be taken care of while growing to scale.
Deviated from Route of Success due to Pandemic
The excitement in the sector was at an all-time high. Then came Covid 19 which disrupted the entire ecosystem of mobility. Lockdowns were announced across leading cities and urban mobility came to a standstill due to Covid. Urban transportation usage nosedived to its lowest levels in this century. It was an unprecedented fall which could not have been predicted to be actioned upon. The industry is now looking at this black swan event for multiple levers to nudge back into relevance. External challenges as in Government interventions to mitigate the economic crisis will have an outsize impact if they are aimed at creating a cleaner and more robust mobility industry. The onus of bringing back the economy on track by unlocking cities must have thought mobility solutions which can revive the industry and help companies get back on their feet.
The economic growth of a country is measured via GDP growth and we generally see the use of cement and fuel consumption as main parameters in nowcasting economic growth of a nation.
Fuel consumption has always been a lead indicator to understand growth and has provided crucial insights into the development of a nation.
The pandemic put a major spanner into fuel consumption patterns with major cities recording a drop of more than 80% on fuel consumption during the lockdown. It is imperative for Governments to look into innovative solutions to drive growth in mobility sectors to accelerate demand and restore growth to pre-pandemic levels.
Innovation emerges when faced with Disruptions
While each organization is looking at different solutions to counter pandemic, the overall approach to weathering pandemic basis volatility and emerging stronger post-pandemic is an important antidote that must be injected into the culture and strategy of every organization. With recent trends and surveys, there seems to be a common pattern into customer attitudes and trends due to pandemic on their approach to mobility and travel.
- Age and location now seem to play a bigger role in purchase decisions. Millennials preferred ride-sharing options to own a car which played a role in the drop in sales across the automotive industry in both developed and developing markets pre COVID-19. This drop has now been exacerbated on the impact of a pandemic but future trends and surveys lead to an interesting afterthought.
- Shared mobility services need to reinvent themselves to create different value propositions. Firstly Physical Social Distancing has become a norm and is starting to influence customer decisions and it is imperative for the mobility industry to be ahead of the curve in providing solutions. Social distancing requirements will significantly change the mobility mix in large cities leading to reduction of use for shared mobility.
- Companies to go asset-light & agile. Micro mobility solutions seem to be on the uptake in countries where unlocking has commenced and companies can pivot themselves based on demand patterns.
- Used cars have seen an all-time spike in demand during COVID. Survey has also shown that the interest in buying cars post-pandemic has increased across different economic levels in China where most of the consumers buying a car is still an aspiration. Whereas in developed markets like the US and the UK the shift is mainly towards the bike, walking and E Scooters.
Environmental factors also will play a major role post-pandemic and it is essential that companies that are already on the path towards sustainable mobility will see major success in the long run. The efficacy and the ecosystem are slowly migrating towards EV and some governments are accelerating the growth using pandemic as a lever of change.
There is also a significant change in the viewpoint towards self-driving cars on the policy front in developed economies which can again be a major growth driver.
While it makes complete sense for mobility leaders and investors to maintain cash during a pandemic that should not be done at the cost of reinventing their core operations or looking at viable M&As. Pandemic provides an exciting opportunity for cash-rich companies to look at investing in future mobility at the right price which can serve them well for the future. The responsibility of employers under Duty of care is not mere fancy term anymore, Employees are the real assets of any organisations and all compliances and allowances are altered around enhancing Employee Experience to reach the peak of Employee productivity.
The future of mobility mainly coalesces with one more disruption pillar over the existing 4’S: Smart, Sustainable, Solution-driven, Shared and ‘Safety’ as they evolve into the post-pandemic era.
COVID-19 has thrown unique challenges across the supply chain for the industry adding to internal challenges. OEM’s have to deal with most of their staff at plant locations which the back office could work remotely. This has made employee safety their biggest concern and multiple measures have been instituted to ensure employee safety while mitigating loss of productivity due to safety measures. The major task lying ahead is the ability to ramp up production forecasting demand in the near future will be challenging.
I am glad to inform you that I have started a SpendPivot – Fireside chat with Leaders, where I will have one-to-one to Resilient leaders of different industries. In the inaugural session, I was glad to have chat with VS Parthasarathy, President – Mobility Sector at Mahindra Group & Executive member of Mahindra Board where we discussed “Revolutionising Mobility & Achieving the impossible in Pandemic”. You can access the power booster conversation here.