Hennecke Fleet Consulting
"Corporate Mobility in Covid19 times"
Paper "Corporate mobility in Covid19 times. How health/ infection risk affects your corporate mobility setup."
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Survey: How does urban mobility change due to Covid19?
An empirical survey from consulting company BCG looked how at 5.000 people in large cities around the world and found out about the change of their mobility behaviour due to Covid19. See here (LinkedIn) and here (BCG).
Their key findings:
Mobility during lockdown: Not all transport modes are affected equally. Public transport is affected harder than individual transport
Avoiding infection risk becomes the top priority in mobility choice. This pushes people towards individual transport
The authors differentiate between short term and mid-term changes
More insights from the authors to be published soon, looking forward to this!
While the authors look at urban mobility from a general perspective (individuals, cities and companies), we want to briefly analyze what the implication of an increased health/ infection risk in Covid19 times and after has for corporate mobility.
What does increased infection risk mean from a corporate perspective?
Decision framework for corporate mobility setup
In general, the findings and conclusions of the survey are in line with our viewpoint: there is not ONE answer or ONE perfect way of corporate mobility.
Instead, the mobility setup of a company – means the mix of dedicated vehicles, pool vehicles, car sharing, car riding, plane, bike, scooter, public transport, home office… - is determined by various factors.
The factors that determine the mobility setup respectively the costs of the different alternativess are mainly:
- the purpose of travel (e.g. travel for service delivery, transport of goods, sales, commute to work, benefit cars…),
- distance of travel
- day/week-time of rquired travel,
- availability of alternative mobility options,
- the corporate culture (e.g. favouring owned cars or preferring flexible mobility...)
These factors may be different from company to company, and even within a company may vary, e.g. depending on location/region/country of the company entity.
Health/infection risk as a new factor determining corporate mobility setup
What is new due to Covid19, is the increased importance of an additional factor in this decision making: The health/ infection risk associated with travel and mobility.
What do we know about health/infection risk and mobility?
Health/infection risk is different for each mobility-alternative (higher in public or shared transport, less in private travel, minimal in home office)
Increased health/infection risk increases the demand for safer mobility alternatives
Health/infection risk varies by city/region/nation
Health/infection risk varies over time (e.g. more risk in winter/flue times, less in summer)
Health/infection risk is sometimes uncertain (how dangerous is a situation? how will governments decide?)
How to consider health/ infection risk in decisions about mobility setup?
In the end, the addition of health/ infection risks makes the complex decision about corporate mobility setup even more complex, and simple answers are not available.
Nevertheless, companies should consider the following aspects with regards to health/ infection risks in their decision making:
Because health/infection risk varies over time and region and is associated with uncertainty about governmental decision making, this requires more flexibility in the mobility setup .
All other factors being equal (purpose of transport,…), public and shared mobility is usually less expensive and more eco-friendly than private transport alternatives. Therefore in a normal situation regarding health/infection companies should prefer shared or public transport. In times of increased health/infection risk, private transport offers more safety. In this case higher safety can off-set the higher costs of private transport.
The question how fast mobility needs to change during a crisis also affects costs: Shifting quickly towards more private transport can be more expensive because of shortages of vehicle-supply and due to price-premiums of more flexible products (e.g. short term rental cars more expensive than long term lease/ownership).
With regards to the even more safe option of home office, indirect cost of mobility also depends on flexibility of vehicle/mobility contracts. (A separate, highly interesting question is whether home office may also reduce the required mobility long term.)
Effects on the financing of mobility (e.g. leasing vs purchase of vehicles) may result not directly from health/infection risk, but indirectly: If a crisis like Covid19 negatively affects the company’s financial situation and the company needs to cut spendings, short time contracts will have advantages over long term.
This means that effectively, in order to determine the optimal setup of corporate mobility, companies need to figure in additional costs related to health/infection risks
Corporate mobility setup and Covid19
Considering health/ infection risks in Covid19 times and afterwards, adds additional complexity to the decision about the optimal setup of corporate mobility. This refers to additional costs and risk-probabilities to be considered.
In order to adapt to changes of health/ infection risk over time and to increased uncertainty, it also requires a more flexible setup of corporate mobility, which comes again with additional costs.
Like before, during Covid19 times and after: Not one form of mobility can be favoured about others. The optimal mobility setup of a company depends on various influencing factors. Conrete suggestions can be made, but this requires to look at company specific determinants.
Recommendation for companies
In any case, an adequate reporting system is required for systematic and data-based decision making. This means a reporting system that comprises all mobility alternatives (owned vehicles, pool cars and alternative mobility or travel solutions) and shows the total cost of mobility (TCM) of a company, based on real and budgeted costs,
If you as a company need help in order to identify your optimal mobility setup, introduce new forms of mobility, implement required IT structures or execute respective change management projects, contact us. #CMaaS #Connector