As companies find ways to work with Covid, where has the pandemic left the a mobility market previously touted as the way to reduce the environmental impact and cost of business travel?
The way we work has changed in many ways during the Covid-19 pandemic, not least how we travel on business. For many months, few of us will have travelled at all. As we embark on the bumpy road towards the ‘new normal’, whatever that turns out to be, how has the mobility market changed? Do alternatives to the traditional company car, which so often involve employees sharing space or a vehicles with others, remain practical while we continue to live with Covid-19?
On the face of it, company cars seem a safe and sensible way to get around during the current health crisis. Each employee travels in their own metal bubble, protected from contact with others. With smartphone apps such as BPme allowing payments for fuel without the driver ever having to step inside the filling station, and parking apps removing the need to touch a parking meter, it’s possible to get from A to B while never coming within two metres of anyone or anything.
However, providing company cars for a significant number of employees is not a cheap option for a business and, at a time of cost-cutting and uncertain revenues, companies are proceeding with caution.
Mark Pickles, managing director of PSA’s Free2Move leasing and mobility business, says many contract hire customers have been taking a wait-and-see approach. “General business uncertainty required a rapid response to offer payment breaks
or renegotiated contracts, to ensure customers could still afford their commitments during the lockdown – typically a three-month deferral of costs,” he says. “In many cases, rather than commit to a new (eg three-year) lease, customers have elected to extend their existing lease, typically for six to nine months, in order to re-appraise their options once things are more stable.”
After a bumpy ride for much of the year, Pickles sees that new business is returning to something close to pre-Covid levels, with a strong emphasis on battery electric and hybrid vehicles, “potentially due to changing views on usage and mileage post-Covid”.
Registration figures from the Society of Motor Manufacturers and Traders paint a similar picture, with fleet registrations in August down by a relatively modest 5.5% year-on-year, compared with a gloomy 42.6% reduction over the year-to-date.
CAR SHARE AND DAILY RENTAL SOLUTIONS
Making sure cars are Covid-safe when they are used by many drivers is more challenging than providing individuals with their own car. The Zipcar car-sharing company has introduced new measures to keep its customers safe.
“We already had stringent checks in place to ensure that all of our vehicles are cleaned regularly and thoroughly with an industry-grade cleaning solution, paying particular attention to steering wheels, door handles, and key fobs,” says James Taylor, Zipcar’s general manager.
“In light of the current situation we have further enhanced cleaning protocols and products and promoted additional hygiene and safety practices within the team that work behind the scenes to care for our vehicles. The teams also carry out spot checks on every vehicle at regular intervals throughout the week.”
Have these measures been enough to reassure customers? Well, during the summer when the number of Covid cases was going down, Zipcar saw a rise in bookings from corporate customers. “Zipcar for Business has seen a 22% increase in reservations in June and July compared to May,” Taylor explains.
However, Justin Whitson, CEO and founder of Fleetondemand, says car-sharing has been less popular during the pandemic. Fleetondemand’s Mobilleo website and app allow users to compare different ways of completing the same journey and then make a booking.
“We’ve seen some conventional shared business travel modes, including air travel, trains, car clubs and car sharing reduce considerably over the last six months.”
Where there are losers, there are also winners. “The demand for ride hailing has increased, lending itself well to business travel across shorter distances and urban trips, while we are really seeing car hire being considered for longer journeys,” says Whitson. “The fact that ground transport operators are implementing new deep-cleaning routines and can offer single-occupancy travel at distance is seen as a safe way to travel for many.”
LOOKING LONGER TERM
Society and the business community will have to live with Covid-19 for many more months at least. But assuming a vaccine becomes widely available, will car sharing and other flexible alternatives to the company car grow in popularity?
Zipcar is confident in its future prospects, seeing the flexibility and financial savings of car sharing as compelling arguments in its favour at a time when businesses will need to justify every penny they spend.
“We allow businesses to grow scalably and flexibly, because Zipcar for Business customers only pay for their time behind the wheel and we cover all inclusions such as fuel and insurance,” says Taylor. “Business members get up to 29% off standard rates, easing the burden of cost when businesses need support the most.”
Whitson also sees the cost advantages of flexible mobility solutions as key. “The current pandemic will no doubt accelerate the adoption of more flexible, cost-saving mobility solutions, which will only serve to benefit businesses and their employees as we adapt to the new normal.”
Pickles also sees opportunities for mobility services as priorities shift from the health crisis to the growing economic storm. The Covid-safe option of a company car may not be the safe bet if a vaccine is found but businesses are struggling. “Taking out a four-year lease might seem risky if there is economic or job-security uncertainty. The availability of alternatives to cater for sporadic and changing mobility needs will fill the gap.”
As well as encouraging companies to think carefully about how their employees travel on business, Whitson also expects companies to travel less.
“The pace at which working from home and video conferencing has been adopted by companies of all sizes around the world has been amazing. It has allowed companies to benefit from reduced overhead costs, including travel expenditure, and will be an integral part of how businesses continue to operate for a long time to come,” he says.
Post Covid, the biggest quandaries may be the safest way to travel on business, and whether to travel at all.