The futures of mobility after COVID-19 has been saved
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The pandemic has shut millions of people in their homes and disrupted every part of the transportation domain, but leaders can’t simply wait to see how tomorrow’s reshaped mobility ecosystem turns out. We offer four possible scenarios for the future of mobility.
For roughly a decade, we have witnessed incremental but rapid progress toward a new paradigm for moving people and goods. Powered by quickly evolving technologies, new business models, and shifting societal expectations, a future of mobility that is more sustainable, equitable, efficient, and convenient than today seemed inevitable, even if the precise timing and nature of that transformation was uncertain.
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And then the mobility landscape was seemingly upended.
As the world grapples with the twin crises of a global pandemic and the potential for a severe and prolonged economic downturn, the imminent emergence of a new mobility ecosystem appears in doubt. Worse: The situation is so fluid, uncertain, and complex that acting with certainty or even conviction can feel less bold than reckless.
But leaders can’t sit back and wait to see how it all plays out, and that’s where scenario thinking comes in, clarifying the choices before us—and their implications. To that end, this article explores four possible futures of mobility over the next three to five years. These scenarios take as their starting point a set of high-level scenarios developed by Deloitte and collaborators, which describe the contours of the world based on how severe the pandemic turns out to be and on the degree of cooperation between and within governments in their response.1 From these descriptions, which are industry-agnostic, we explored how the crisis is likely to affect the movement of people and goods, including potential implications for players across the mobility landscape.
Unsurprisingly, we found wide variance across—and within—scenarios. But we also found important commonalities, such an increased emphasis on hygiene in vehicles, or the growing importance of last-mile delivery and e-commerce, upon which companies can act today with at least a modicum of confidence.
Our hope is that business leaders can use these scenarios to begin to identify the central sources of uncertainty, lay out the strategic choices facing different actors, sketch out potential pathways to the future, and highlight the indicators that players across mobility domains should be watching. Doing so now will put us on firmer footing as the environment becomes clearer over the next several months, helping stakeholders from across the transportation spectrum make better-informed choices as they chart a course that accelerates our collective journey to a better future of mobility.
As we have chronicled over the last five years, the entire way people and goods travel from point A to point B has been changing, propelled by a series of converging technological and social trends: the rapid growth of carsharing and ridesharing; the increasing viability of electric and alternative powertrains; new, lightweight materials; and the growth of connected and, ultimately, autonomous vehicles.2 The result is the emergence of a new ecosystem of mobility that promises faster, cheaper, cleaner, safer, more efficient, and more customized travel.
While uncertainty abounds, in particular about the speed of the transition, a fundamental shift is driving a move away from personally owned, driver-driven vehicles and toward a future mobility system centered around (but not exclusively composed of) seamless multimodal travel and enabled by driverless vehicles and shared mobility. Far beyond automakers and transit, industries from insurance and health care to energy and media have been considering how to create value in this emerging environment.
As this ecosystem matures, its center of gravity along four key dimensions—leadership, priorities, markets, and personal data—has come into sharper relief.3 These elements move beyond particular technologies or modes and instead describe the fundamental choices and trade-offs with which mobility players are grappling; they provide a rough way to characterize the ecosystem’s essential features.
The center of gravity in mobility was in a very different place just months ago. Notwithstanding considerable variation across geographies, modes, technologies, and mobility domains, at the broadest and most aggregated level, our team of experts characterized the precoronavirus mobility landscape in line with figure 1.
Leadership has tended toward the private sector, driven by the rapid pace of technological innovation (for example, electric powertrains and automated driving systems), new business models (transportation network companies), an expanded set of modalities (drones and electric scooters and bikes), and powered by a steady influx of investment capital. In recent years, the balance has begun to shift toward the public sector, as many cities and others have sought to more actively guide their mobility future.
Priorities have tended to emphasize individual journeys, with many technology and mobility providers (ride-hailing and micromobility but also retailers and shippers/carriers) offering services that increased consumers’ options but with the side effect of worsening systemwide challenges such as congestion, emissions, and clutter in the public right of way. As those systemwide issues have grown more acute, both the public and private sectors have shown increasing interest in addressing them. The dynamic extends to freight, where efforts have increased to connect disparate components, reducing friction and inefficiency.4
Markets tended toward a less regulated environment, with relatively few constraints on businesses and others exploring new forms of mobility. With some exceptions, the development and deployment of autonomous vehicles and advanced driver-assist features, vehicle connectivity, and new modes and business models were not overly hindered by widespread heavy regulation. That, too, had started to shift in recent months, as regulators in multiple jurisdictions began to promulgate more explicit and binding rules.
Personal data tended to favor individual privacy and security, albeit with wide variations across geographies; contrast Europe’s General Data Protection Regulation or the California Consumer Privacy Act with China’s extensive system of monitoring. Amid an emerging “techlash” and increasingly contentious battles over mobility data between cities and the private sector,5 the trend seemed to be moving toward greater emphasis on individual privacy and security.
This assessment of the status quo ante is admittedly impressionistic, albeit informed by our long experience engaging deeply with mobility players across the ecosystem. Even before COVID-19, there was wide variation in how different cities and companies were balancing these different dimensions, as our work with the World Economic Forum on Seamless Integrated Mobility Systems illustrated.6 We expect to see similar variability in a postcoronavirus world, although the pandemic and the global response could drive convergence on some issues.
Against this backdrop of innovation and contestation, twin crises are buffeting the future of mobility. The first is COVID-19 itself and the measures that have been put in place across the globe in an attempt to slow its spread and manage the public health repercussions. The second is the resulting economic fallout, which seems likely to push the world into a recession of unknown severity and duration.7 These crises, alone or in combination, raise serious, even existential questions for players across the mobility landscape (figure 2).
The trajectory of the future of mobility and the impacts on players across the ecosystem is highly uncertain and could vary dramatically depending on how the pandemic evolves, the health of the overall economy, and on the collective decisions made by governments, businesses, and individuals over the coming months. To explore those alternatives, we look at four possible scenarios for a postcoronavirus world.
Scenarios are stories about what the future may be like, created through a structured process to stretch thinking, challenge conventional wisdom, and drive better decisions today. They are not predictions about what will happen—they are hypotheses about what could happen, designed to open our eyes to new opportunities or hidden risks.8
We have chosen a three-to-five-year time frame, as it offers a window wide enough for significant change to take place but narrow enough for executives to take practical action now to build their organizational resilience.
Deloitte and Salesforce assembled renowned scenario thinkers to develop a series of possible long-term (three-to-five-year) outcomes for a post-COVID-19 world. At the highest level, the postcoronavirus landscape will likely be shaped by the evolution of two key factors: the duration and severity of the pandemic itself, and the degree to which governments collaborate within and between themselves in the response. Based on the key uncertainties, we developed four notional scenarios:
Each scenario offers a high-level description of the state of technology, society, the economy, the environment, and politics. Building off of those general characteristics, we dove deeper into what mobility might look like in each.
Of course, even in narrowing our focus to transportation, these scenarios largely and necessarily omit the near-infinite variations we will see across geographies. And while these scenarios can be roughly characterized as optimistic or pessimistic based on the course of the pandemic and how governments respond, those labels do not neatly translate to the mobility environment in each future.
Acute but brief public health and economic crises accentuate some enduring shifts in mobility trends, including increased reliance on e-commerce and home delivery and greater emphasis on sanitation and safety. Despite a temporary pullback, most providers and governments return to their status quo ante roles. “Typical” business cycle downturn dynamics play out, with consolidation taking place across the board, from small mobility startups to larger incumbents.
The COVID-19 pandemic, while relatively brief, alters the mobility landscape in enduring ways. Consumers place greater emphasis on vehicle sanitation in cars, buses, trains, and shared bikes and scooters, prompting new self-cleaning materials, certification programs, and form factors—for example, passenger partitions. The turn to e-commerce accelerates, as does the importance of last-mile delivery networks, increasingly enabled by autonomous vehicles and digitization of the logistics value chain. The in-transit experience benefits from advances in digital entertainment and productivity prompted by the pandemic, including, potentially, AR and VR applications.
The mobility ecosystem hits “pause.” Advances in new technologies, modes, and business models come to a temporary standstill as near-term government relief and relaxed regulation in some markets provide a lifeline and legacy incumbents (automotive OEMs, suppliers, and dealers, along with airlines, mass transit agencies, major freight carriers, and others) revert to familiar products and services; government funding aims to restart the economy by getting people back to work. American and European automakers reduce investment in electric vehicles and/or autonomous vehicles, while transit agencies forgo modernizing legacy infrastructure and fleets; the push toward automation is temporarily slowed as governments stress getting people back to work. In parallel, venture funding for riskier, longer-term innovation slows down as the time frames to realize ROI get elongated. The mobility business ecosystem sees a winnowing, as poorly capitalized startups fold and even some well-established players see their businesses threatened. Some well-capitalized technology companies are able to strengthen their market positions.
As travel restrictions ease, some organizations maintain work-from-home options, but in insufficient numbers to affect overall mobility patterns; old habits quickly return, as does congestion and reduced air quality in many cities, potentially exacerbated by the reluctance of some to use mass transit. Growth in at-home delivery clogs streets further. That said, some cities that have embraced more progressive, sustainability-focused approaches may try to lock in new mobility patterns by repurposing infrastructure toward active modes (biking, walking) and could represent the vanguard for implementing mobility innovation. The net result could be an increasingly bifurcated mobility landscape, with low-density cities and rural areas even more reliant on internal combustion engine-powered personal cars and crowded metropolises moving closer to seamless integrated mobility anchored in public transit and active modes.
Given the modest effect of the pandemic and economic fallout, we continue to see wide variation in approaches to mobility. In many places, successful efforts to combat the virus invigorate governments, prompting them to redouble initiatives around sustainability—in Europe and Asia, in particular, public authorities work to accelerate the shift to electric and alternative fuel vehicles via expanded charging infrastructure, incentives, and bans on internal combustion engines.
Public goods, including transportation, are increasingly provisioned by the private sector. Mobility businesses, especially the largest tech-based providers, step in where government-provisioned services struggle to keep up, offering seamless transportation for their customers. Seeing mobility data’s utility in managing the pandemic, individuals are increasingly open to sharing information with the private sector; mobility technology advances quickly.
The private sector increasingly fills the voids left by the public sector in provisioning of services. Large, technology-based mobility companies thrive and take a leading position in mobility, collaborating with governments and legacy incumbent businesses, which find themselves with diminished leverage and relegated to junior-partner status. Privately owned on-demand flexible mobility (ride-hail, microtransit, micromobility) supplants public transportation in some routes and markets—or even becomes subsidized and acts as public transit. While privatized transit offers improved movement of people and goods for a portion of the population, it increases inequality, potentially tempered by a redoubled focus on stakeholder capitalism.
Large technology and mobility companies dominate the space, forging public-private partnerships and launching an array of innovation zones and “smart districts” in cities. The success of data-enabled businesses in monitoring and mitigating COVID-19 outbreaks translates to increased willingness of individuals to share mobility data with the private sector. That in turn fuels new mobility innovations and solutions around travel routing and planning and mobility-as-a-service. Cities suffer disproportionately and face a revenue crunch, ceding authority and regulatory power around mobility cost, access, and personal privacy and use of data.
EV adoption accelerates, driven by public attitudes, business innovation, and a regulatory environment increasingly shaped by socially conscious enterprises. Autonomous vehicle development accelerates, with more on-street testing.
The East Asian model’s perceived success extends from managing the pandemic to mobility. China, Singapore, Japan, and others become the leading hubs for mobility innovation and R&D, overshadowing Silicon Valley and Tel Aviv. The physical and digital value chains for electric vehicles, autonomous vehicles, and other technologies consolidate in the east, to the detriment of European and North American businesses. Active mobility management to address systemwide challenges around congestion and air quality becomes the norm, enabled by robust government data collection and analytics.
Asian companies across automotive, technology, and new mobility become globally dominant, supplanting their American and European rivals, serving both their booming home markets and consumers abroad. China increasingly dominates the battery supply chain, including key raw materials such as lithium and production technologies. Asian companies’ investments go global, buying stakes in emerging mobility technologies and securing key IP. Some Western governments, prodded by the private sector, enact additional protectionist measures to limit the adoption of foreign products, technologies, and solutions such as digital mobility platforms for cities and telecommunications hardware.
Cities globally embrace a more hands-on approach to managing mobility, with increased willingness to use policy tools championed in China and Singapore, such as license restrictions for new cars and dynamic road pricing. More expansive surveillance and data collection by government is increasingly seen as necessary and beneficial. Together, they enable multimodal trip planning with real-time traffic and transportation information to become the norm, along with more visible public health measures such as temperature checks and mandatory contact tracing.
Major investments in public transit are also seen as desirable, even as many governments struggle to fund them on the heels of an extended economic downturn; China backs some countries’ projects via its Belt and Road Initiative. Consumers gravitate toward long-term leasing, subscription, and rent-to-own models, pioneered in East Asia, as people shy from big-ticket purchases.
National, regional, and local governments accrue greater authority as they lead efforts to combat the coronavirus. Cities force data-sharing and actively regulate mobility via top-down monitoring and control (for example, pricing), first as a way to control COVID-19 and then as a way to meet other, systemwide goals. Data privacy and cybersecurity give way to increased government oversight.
Cities, counties, states, and regions seek to exert increasing authority over the movement of people and goods in their jurisdictions, prompting numerous legal challenges from the private sector and other levels of government. Governments exert strong influence over capital flows, directing it toward “national champions” in traditional industries with an emphasis on job creation. Growing geopolitical tensions and virus-related readiness concerns make militaries a leading source of investments in mobility innovation. Energy and battery markets fragment and shift to local production, prompting some (for example, the United States) to continue to rely on internal combustion engines while others (China) double down on electric powertrains; absent robust battery supply chains, the development and deployment of some vehicle types (electric vertical-takeoff-and-landing craft and drones, for example) lags in particular markets.
There is a significant and sustained but uneven decrease in individual travel across all modes as waves of outbreak lead to shelter-in-place orders, permanent work-from-home arrangements for those able to do so, and increased use of telemedicine and digital services. Use of shared modes declines in favor of private, owned options, and remaining shared options adapt to provide new options for riders (for example, partitioned vehicles, self-cleaning interiors, and certified sanitized rides) as virus fears linger. Personal autonomous vehicles see limited deployment to the few who can afford them. Commutes for some lengthen as people with means flee dense cities for exurbs and shift to telework. Unprofitable or ill-funded mobility providers fold or are absorbed by better-capitalized competitors; in some cases, governments take stakes and microtransit, ride-hail, and micromobility providers become quasi-public transit.
Supply chains are dramatically shortened as countries force production to return onshore. There is a boom in e-commerce and last-mile delivery as brick-and-mortar retail collapses under the combination of persistent economic hardship and disease transmission fears, resulting in accelerated deployment of autonomous-vehicle technology for logistics.
Uncertainty should not be synonymous with inaction. It is too soon to know which, if any, of these potential futures is most likely—or if we may end up in a hybrid world exhibiting features of one or more of them. It is not too early, however, to begin weighing the strategic and business model consequences of these scenarios and laying the groundwork for whatever mobility world ultimately emerges from the pandemic. As government recovery funding and regulatory changes start to be enacted, organizations will start to make investments and choices. These actions will begin to shape where they will play and how they will win in the future. It is critical that leadership teams evaluate the trade-offs associated with these choices now, before it may be too difficult, costly, and potentially late to alter the organization’s trajectory.
In the midst of the uncertainty, there are also some trends that we expect will take hold and persist, irrespective of which scenario plays out, specifically:
Beyond these “no regret” considerations, each scenario has room for a wide spectrum of mobility outcomes. There is a world in which the virus passes relatively quickly and the economic damage is acute but short-lived—and which sees people retrench into old movement patterns, dominated by private cars, powered by fossil fuels, and with even fewer viable alternatives than what we’ve known over the last several years. Likewise, a scenario that sees ongoing waves of infection, the breakdown of governmental cooperation, and the rise of more intrusive surveillance could nonetheless find pockets of a new mobility landscape, with reinvigorated public transit, a rekindled enthusiasm for walking and cycling, cleaner vehicles, and the use of technology to enable more efficient and convenient journeys for people and goods.
Which of these outcomes is most probable hinges critically on the decisions made by myriad stakeholders—including readers such as you—over the coming months. The fundamental choice, which will manifest in a thousand variations across the mobility ecosystem, is simple: Do they fall back on old ways, abandoning new modes and services and focusing on legacy businesses or departing the mobility landscape altogether? Or do they maintain and even redouble efforts to forge new approaches that propel us to a reimagined mobility system? The latter path takes courage, conviction, and, yes, a greater tolerance for risk, and may be beyond the wherewithal of many. As we have written about extensively, this future is dependent upon a new ecosystem emerging, where roles shift, as do the sources of value creation. Like all crises, this one offers opportunities to conceive of different ways to establish success in a mobility landscape undergoing significant change.
As you consider that essential choice and these scenarios, challenge yourself to imagine how the things you were certain would happen could now be on a different course. Avoid the temptation to conclude that the crisis will accelerate the changes you already expected or believed were inevitable. Ask yourself:
Stakeholders will need to closely track both the overall situation (pandemic severity and how governments react) and their specific mobility environment to gauge which future—or combination of futures—is beginning to emerge, and be prepared to pivot their response accordingly. Agility is a trait many organizations aspire to but few attain9—and it may be the most important capability of all going forward.
In forthcoming articles, Deloitte will be exploring the implications of coronavirus on the future of mobility in greater depth, including diving deeper in the potential future scenarios, their key drivers, and their implications for different players in the mobility space.
While the ability to shape which mobility future comes to pass is beyond any single actor’s control, we are hardly bystanders. Every participant in the mobility ecosystem—down to every individual—can influence its direction through the choices we make in the coming months. And collectively, by convening and activating that ecosystem, we can create monumental change for the betterment of society.