Analyses
19 mar 20

COVID-19 pandemic bad for shared mobility, good for ICEs

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How is the coronavirus outbreak affecting the European fleet and mobility industry? As testimonials from Italy and elsewhere indicate, the immediate losses are enormous. But crises are also opportunities for innovation.

Italy is the European epicentre of the COVID-19 epidemic. It was first affected: the virus was officially detected on 29 January. And it has been hit the hardest, with around 35,000 confirmed cases and 3,000 deaths (as of 19 March).

Two responses

After Italy, the virus spread rapidly to every corner of Europe, but the real impact and the countermeasures vary from country to country. At the moment, there are two main types of response.

  • Countries like Italy, Spain, France and Belgium are taking severe measures, virtually going into ‘lockdown’ to control the spread of the virus, in order to ‘flatten the curve’: preventing a peak of critical cases that would overwhelm the capacities of each country’s health service.
  • Countries like the UK and the Netherlands have (as yet) imposed less strict measures, which seem designed to both control the spread of the virus, but also to bet on the fact that enough people get infected and cured to generate so-called ‘herd immunity’, which would be a great asset in case of a second flare-up of the virus.

Single voice

Two major takeaways: Europe is, once again, not speaking with a single voice. And the perfect instrument for that single voice – the European Union – remains deafeningly silent.

“The lack of one clear European voice is a pity,” say fleet experts Vincenzo Conte and Luc Pissens. Both point out that the international dimension of the coronavirus pandemic is crucial, so it would make sense to have a uniform policy at international level – if not globally then at least per continent.

90% drop

Aniasa (the Italian association for leasing companies) estimates that activities in car rental, car sharing and airport mobility in the country have dropped by about 90%. Mr Conte (pictured), Chief Editor of Italy’s premier fleet magazine Auto Aziendali magazine, expects that devastating impact to be replicated for the country’s operational leasing business: “Most businesses are closed, dealerships and plants are closed, the order and delivery activities of leasing companies are closed. There is no movement of people and cars. So the leasing industry will be temporarily not needed, and not operational.”

But life must go on somehow, and e-commerce and home delivery are booming as a result. Italy has – by necessity – become a testing ground for all kinds of innovations in delivery solutions. “Businesses need to survive, so they look for ways to do business when and where possible. Food delivery in particular is one area where we can expect Italy to produce some innovative ideas.”

Longer-term impact

And what of the longer-term impact? “Corporates will postpone investments and renewals, which means less company cars. And I expect the shared mobility concept will be kicked back into the long grass. Smart, long-distance working may be the solution now, but I’m not sure how popular it will remain afterwards. Many employees may demand one or two days a week as a standard, but are employers going to follow?”

Mr Conte’s advice to people and fleets in other European countries:

  • “Don’t underestimate this crisis. Italy has been hit extremely hard.”
  • “We are regretting that we did not move faster to contain the crisis.”
  • “Stay in your homes. And listen to the authorities.”
  • “As for the economic impact: work so you’re prepared to recuperate what was lost when all this stops. We’re not there yet: we’re still living the crisis day by day, hoping it will get better soon.”

Short shock

Mr Pissens (pictured), both Fleet & Mobility manager at Bank Degroof Petercam and president of the Belgian Fleet Managers Association (BFFMM), echoes Mr Conte – severe measures are needed. “It’s better to suffer a short shock than to undergo a longer period of hurt.”

Belgium had its first coronavirus case on 4 February and went into lockdown on 18 March. “The measures now taken will hopefully help us limit the outbreak in time and in casualties. But this is on the condition that we as a community respect those measures.”

"It's as yet too early to measure the impact of the pandemic on the Belgian fleet and mobility industry, says Mr Pissens. "I haven't yet received a lot of feedback from Association members, or from peers. This is a completely new situation, so I can imagine all executives and managers in the industry are still figuring out as they go along what has to be done and how to organise work for their employees." Some facts are already clear, though: "The automotive industry has stopped. Dealerships are closed, which means no maintenance, no new-vehicle deliveries and no orders are being processed."

Home working

As in Italy, Mr Pissens is witnessing an enormous boom in home working: “Our offices usually have about 700 people in, now it’s only about 50. The rest are working from home. Other companies are experiencing similar situations. Based on this experience, I think more companies will accept the concept of home working for certain employee clusters, perhaps not completely but let’s say one or two days a week.”

Due to the measures taken against the spread of the virus, using public transport and shared mobility have been discouraged and have taken a hit. “In the current climate, with the virus still expanding in Belgium and throughout Europe, you can imagine that promoting shared mobility is not the smartest thing to do – even though I know that the providers are taking all measures necessary in terms of disinfection,” Mr Pissens says.

One mid-term consequence of the coronavirus outbreak for mobility could be the revival of the one-car-one-driver principle, and of combustion engines, Mr Pissens concludes: “The coronavirus will lead to an economic downturn and this means companies will go for cost efficiency and cost neutrality even more than before. Coupled with decreasing oil prices, it looks like diesel and petrol cars will have the upper hand over EVs for a little while longer.”

Leading image copyright: Shutterstock

Authored by: Steven Schoefs