Public transport in 2021
On the demand side of public transport, we generally see great variability: the number of passengers during peak hours is higher than during off-peak hours. Because of COVID-19, the demand side has become even more challenging: in particularly, it has become very unpredictable.
On the capacity side, the classical approach is often used: more passengers, more staff and equipment. Partly due to the high costs and the limited flexibility of this deployment, an imbalance between demand and capacity easily arises. Add to this reduced capacities due to the current 1.5m standard, and the consequences of (too) full or too empty buses, trams and trains become painfully obvious.
In the background is another challenge that is not immediately visible to travellers. Fewer passengers results in less revenue, which makes transport companies more cautious about investing.
Uncertainty prevails
COVID-19 has a major impact on politics and the economy. This creates a great deal of uncertainty about the now, but also about the post-COVID-19 future. This is reflected in the above challenges, but also in the possible recovery. We list four possible recovery scenarios for public transport.
Scenario 1: Overloaded
Total and peak passenger numbers recover to the 2019 figures before COVID-19, perhaps even growing. One big advantage for public transport operators is the recovery of turnover, but the possible downside is the return of (old) problems.
Scenario 2: Inefficient
Overall demand is significantly reduced, but peaks are relatively high. Larger transport hubs are already experiencing this. This scenario is particularly disadvantageous: low turnover and an increase in inefficiency.
Scenario 3: Contraction
Low passenger numbers and a lower peak. Possibly strengthened by continued working from home or switching to other modes. Here there is a potential benefit from the need to downsize, e.g. by discontinuing capital-intensive operations. Obvious disadvantages are reduction in turnover, risk of redundancy and less capacity to offer service and timetable to passengers.
Scenario 4: Ideal
Total passenger numbers recover to 2019 levels for COVID-19, but peak numbers decline. Due to habituation during the pandemic (digital appointments), passengers are more flexible in terms of travel time. The advantage for public transport companies is that capacity can be deployed over a larger time interval. The expectations of travellers are higher, however; outside peak hours they expect a good workplace; ‘the advantages have to outweigh the disadvantages’.
Meeting demand efficiently
It is likely that the recovery will take the inefficient scenario towards overstrain or ideal. However, no matter what the route to recovery is, action is required to continue to efficiently meet demand. Action that meets the needs of the (future) digital traveller.
The digital traveller
To understand the traveller, we must look at his/her motivation to choose public transport, both now and in the future. In general, public transport has a positive image: it is good for the environment, you have limited/no trouble with traffic jams and travellers feel intrinsically good about sharing a means of transport. The most important reasons for avoiding public transport are: the limited flexibility of public transport, the possibility of having to stand, the (in)accessibility of the destination. It is actually the same as in any industry, the customer expects value for money.
The digital traveller of the coming decades expects a degree of quality and flexibility. In terms of quality, travellers want to be transported comfortably, with ideally a workplace and internet. And they want to get from A to B without having to change trains endlessly or having to wait. Flexibility shows itself in the the following idea: “I want to come and go when I want, not when the carrier wants, no matter how busy it is.” The traveller wants to influence his/her journey and to arrange as much as possible for him/herself, something that public transport will have to facilitate.
The public transport of the future
The focus for public transport must be on flexibility, being there wherever the traveller is. This requires digital operational management, including a strong connection with the traveller. We have four investment recommendations for public transport:
- Digitise
Where possible, abandon capital-intensive elements and focus on digital operations. Lease & As-a-Service companies will fill the infrastructure gap. FlixBus and KLM are good examples. And allow the traveller to influence his/her journey through self-service and arrange as much as possible for him/herself. Think also of the digital verification of a possible vaccination passport or test certificate.
- Go data-driven
If the organisation is closely involved in IT, it will also be easier to map out demand and capacity and start working in a data-driven way. From these insights, you can work towards predictions and the timely response to shifts in demand, or even towards travelling without a timetable.
- Make capacity flexible
The current classical system usually requires large investments for adding and moving capacity. Fortunately, it is also possible to build in flex-capacity in the current system. For example, through the lease constructions mentioned above, but also through, for example, reservation systems or a tariff differentiation (price surcharge in peak hours). In the post-COVID-19 world, travellers will probably be more willing to spread their trips – but then their expectations will have to be met. Autonomous vehicles may eventually play an important role in filling in this flex capacity.
- Work together in the chain
Cooperation in the chain can make filling in the flex capacity more predictable and easier. If a bus or train does not run on a certain route, it will have an impact on the entire public transport chain and it is up to public transport to deal with it properly. Moreover, good cooperation between companies can lead to substituting each other’s capacity. Initiatives such as a shared operations centre, the sharing of data and joint management measures can help to act proactively.
The combination of digitisation, data-driven work, flexibility of capacity and chain cooperation will be indispensable for the public transport companies in the coming decades. Investments that contribute to this will pay off in the future, regardless of the route to recovery of passenger numbers.
Do you have any questions about the content, the advice provided or about Bostec in general? Please do not hesitate to contact us.
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