Another Turning Point in Mobility
Survival of the Fittest: “TOGETHER”!
The epidemic of COVID-19 has halted the travel and hospitality industries. While countries continue to actively battle the deadly virus, societies and enterprises look to rebuild and re-emerge from the crisis. The recovery process for the travel industry poses unique challenges, and building a sustainable future will be complicated.
However, I argue that at this moment, transportation industries that were left out of digitalization and the move to on-demand services can find new space in the market. It has been widely discussed that the taxi industry has hardly made any changes in its operating model since the invention of the taximeter in the 1940s. Then, the taxi, limousine, and rental car industry had a painful experience when Transportation Network Companies (TNC) such as Uber entered the stage after the Great Recession and 'Uberized' their industries. They pushed a model that favored contract workers and avoided traditional safety regulations, as well as local and federal compliance. TNCs gained a legal status for operating on an unlevel playing field, disrupting the industries for the last decade and leaving the taxi, limousine, and rental car industries looking like relics of the past.
But now comes another moment of change. Of course, COVID-19 poses an opportunity to reimagine the transportation industry, considering what will become the top priority for customers: safety! In addition, in July 2020, California will start AB5 enforcement and has filed a lawsuit against TNC giants; Uber and Lyft for driver misclassification. The effect is projected to be judicious. According to an article in Quartz, AB5 has the potential of increasing Uber's and Lyft's annual operating loss by more than $500 million and $290 million, respectively. With these two shifts, we will bear witness to a moment that will again increase the speed of innovation as we seek to bring solutions to these questions. What will the future of automotive ownership and driving look like, and how will it shift and diversify toward on-demand mobility and data-driven services? Will there be a product that adapts to these new AB5 and health requirements? Are Mobility as a Service ( MaaS) systems enough to solve transportation problems?
We will never commute in the same way again, certainly not until there is a vaccine. And for the taxi, limousine, and rent-a-car companies to re-emerge, the industry must dismiss the old assumption about demand and fare income. It will need to understand how transport networks can improve to the new normal. We should adopt innovative solutions that need to be hatched as the mobility landscape changes, ensuring that the private sector aids the public sector in assisting in a new era of equitable, effective, and efficient transportation.
To survive and adjust to this new normal, one must embrace new and flexible business models and innovative technologies to localize the operation and support demand for responsive services and dynamically predict industry movement while enabling safety. Those to continue must implement measures to control infection risk and make people feel safe. Governments, transport agencies, operators, and unions also need to agree to an updated standard for the new normal.
Mastering this requires decisive action from policymakers to engage with the private operators' sector and tear up the old rule book. Let's get the wheels turning on some novel ways of doing things.