How COVID has re-routed Canada’s mobility future

drive, car

In February of this year, I wrote about what mobility could look like in 2020 and beyond, based on trends that had emerged over the past year.

Just a month later the COVID-19 pandemic escalated and upended the entire mobility landscape. While COVID may have curtailed a few of February’s predictions, it accelerated others that were inevitably going to unfold.

If anything, the pandemic has exposed the vulnerabilities of the mobility landscape. Urban mobility is an interconnected ecosystem comprising various modes of transportation that address different demands—COVID has shown which parts can sustain stress, and which can’t.

As Canadians move past the immediate aftershock of the pandemic (and potentially brace for another round), we’re learning to adapt and find new ways to get around. In the months ahead, here are my predictions on what to expect from Canada’s mobility landscape:

Fleet-based carsharing remains largely inefficient

As I previously suggested, the fleet-based car-sharing model is still struggling and can’t keep up with consumers’ growing needs. The model’s heavy capital requirements and high fixed costs make it hard to compete in today’s fast-changing environment.

The pandemic has further amplified the challenges facing these companies. Car sharing service Car2Go was forced to exit Canada at the start of the year. Since March, we can add Maven to that list, while Zipcar has pulled its operations from British Columbia.

Like the rest of the industry, fleet-based car sharing saw a dramatic decline in trips when the pandemic hit. However, when demand for cars surged back during the summer, it failed to adapt to meet the need for their services. In both Toronto and Montreal, as more people turned to car sharing for their mobility needs, fleet-based companies were unable to scale fast enough to meet the flood of booking requests, leaving many consumers frustrated. The model is not suited to quickly scale and incorporate new vehicles—the only way to address growing demand.

The crisis has further exposed the economical and user experience challenges the model faces, leading to financial losses and disgruntled customers.

We should anticipate an erosion in market share for fleet-based services as they struggle to keep up with distributed mobility platforms as well as swings in consumer demand.

Vehicle sales might be rebounding, but are leading to a growing disparity

Another major development of the pandemic has been the significant change to car ownership and automotive sales.

While car sales were on a steady downward trend—particularly amongst younger generations only a few years ago, and there was speculation that car ownership was in decline, many people now consider car ownership as one of the only safe transportation methods available.

Car sales were down 3.3 percent year-over-year in the third quarter of 2020. There are signs indicating that car sales may accelerate in the coming months because of concerns around ride-sharing and public transit. However, it’s possible this could lead to a sharper disparity between those who can afford to purchase a vehicle and those who cannot, as affordability still remains a critical concern for many Canadians due to the tough economic climate, especially for younger people. To purchase a vehicle, they’ll need to look for alternative sources of income to afford it.

The pandemic is also causing drastic changes to how original equipment manufacturers (OEMs) and car dealerships conduct business.

They’ll need to find innovative ways to attract new buyers – whether it’s introducing more affordable vehicle models, or harnessing technology to make the buying process easier and contactless for consumers, this sector will be one to watch.

Ride Sharing companies will look to diversify to survive

Ride sharing services like Lyft and Uber saw trips drop by nearly 80 percent from April to June and have only marginally recovered since then compared to automotive sales or car sharing.

To their credit, these companies have done virtually all they can to put in place safety measures that will reassure riders, such as mandatory mask policies and pre-ride selfies. That said, it appears there’s still an issue around trust when it comes to ride-sharing, and it’s uncertain when it will ultimately pick up again.

In the meantime, these companies will continue to diversify their offerings to remain competitive and on a path of growth. We’ve already seen these companies make a deeper investment into delivery services, while also partnering with transit agencies and car rental companies. They will need to find alternative streams of revenue if they’re going to survive the pandemic.

Creative solutions for underserved communities

The pandemic has shown that traditional transportation and mobility solutions are vulnerable, leading to greater discussions around alternative forms that could either complement or replace existing methods.

There was a record 84 percent drop in public transit usage for the month of April.

If public transit agencies are forced to make cuts, microtransit in the form of public-private partnerships could emerge as an effective way to support underserved communities—such as rural regions—that are unable to access transit, while keeping underused routes alive.

One way – and in my view, one of the only economically viable ways – for microtransit to truly work is through partnerships with peer-to-peer mobility companies. Otherwise, transit companies and their partners would need to invest in more assets to keep routes running, defeating the purpose of the model.

In virtually every industry, this year has shown that the only constant is change itself. This has proven true for the mobility landscape here in Canada, having evolved more in the last six months than it has in decades.

As every day brings a new challenge, it also brings new opportunities to design innovative solutions to move more efficiently through our cities.

Photo by Liam Pozz via Unsplash

Cedric Mathieu

Cedric Mathieu

Cedric Mathieu is the Vice-President & Head of Turo Canada. Turo is an American peer-to-peer carsharing company that allows private car owners to rent out their vehicles. Mathieu helped launch Turo’s first international market from scratch in April 2016. Prior to Turo he co-founded and was COO of WESAWIT a fan-engagement platform for the live entertainment industry.