30 June 2021
As businesses change the way they work and become more flexible, post-pandemic mobility may be very different from before. We look at the issues around the changing face of business travel.
In the past decade, mobility-as-a-service (Maas) has been touted as a new way of travelling in which people can easily and efficiently switch between many different modes of transport.
The concept initially started with the idea that, especially within cities, you might sign up to one provider who could then offer all types of transportation, as well as journey planning, ticketing and booking, giving the user one simple cost at the end.
Essential to the development of Maas is digitisation and electrification, but also public and shared transport too: in its Future of Mobility: Urban Strategy plan in 2019, the Department for Transport said that “Mass transit must remain fundamental to an efficient transport system” and mobility innovation would come through “sharing rides and increasing occupancy”.
However, the onset of Covid-19 has changed all that, and it is unclear if the concept of Maas will ever become reality in its pre-pandemic form because people now have different motivating factors for travel choices. In research by consultancy McKinsey & Company, lowering the risk of infection is now the number one driver of transportation choice – moving above the usual issues of price, convenience and time.
What will this change have on the dynamic of choosing a method of business travel? As an employer, do you allow Covid security to become the principal requirement for mobility choice? Perfectly reasonable of course, but at what cost does this become untenable?
With volumes in early June on London Tubes and buses at 40% and 65% of equivalent levels in ‘normal’ time, usage and confidence in public transport seems still to be low. So what next for Maas and what does it mean for the future of business travel?
A new approach to business travel
As the world returns to a more typical way of working, there will still be the requirement for business travel, even if those journeys are undertaken in different ways to before.
The development of mobility-as-a-service may result in offering many more choices for travel using digital platforms to book them, but not necessarily the ones we thought of previously.
While a corporate business might have previously had agreements with a handful of providers for services such as rental and private hire, the move to a post-pandemic mobility could make transport provision far more wide-ranging and disparate, with many urban centres already offering many different ways to get around, such as ride hailing and sharing, car clubs or bicycle hire.
According to a report of future mobility by consultants Kantar, shared mobility is 15% less attractive to travellers than before the pandemic, while individual transport such as e-bikes has risen 8%. The consequence is that when employees travel, they will want mobility options, but those options will need to be more based around the individual (and therefore more expensive), such as rental or private hire, rather than cheaper public transport.
The changing role of the fleet manager
Historically, the vast majority of business mobility has been defined quite clearly: company cars, rental, trains and taxis are typical methods. But as the number of ways of travelling expands, attitudes to what is an acceptable form of transport for any business journey could shift, and with it the role of the fleet manager.
For many fleet managers that may mean becoming a mobility manager too, looking at methods of digital communication, company cars, salary sacrifice, rental and alternative transport provision.
According to an Association of Fleet Professionals’ spokesman, this is a trend on the increase: “The fleet managers’ role is changing, and they are adding value by helping business transformation and employees to be more flexible post-Covid. With more working from home, we are seeing some employees wanting to hand a company car back, and take cash or source a car through salary sacrifice, and also then use other mobility solutions such as car clubs, which are getting cheaper.”
As employees move towards electric cars as a mobility choice, whether it be with a company car, salary sacrifice, rental or other methods, this will need managing as part of an overall mobility strategy. According to the BVRLA nearly one-fifth of its members’ fleet now has some form of electrification, with 5% of the car fleet being pure EV and 15% hybrid. This figure is only set to increase with members pledging to register around 400,000 new battery electric cars and vans each year by 2025.
Businesses will need the tools to manage the switch, giving them insight into the cost and time efficiency of new transport provision, as well as controlling the myriad payments involved, not only through providers of vehicles in the case of rental, but also charging networks and reclaim of electricity used at home.
Managing supplier and payments
The disruption of the traditional norms of business travel and communication, increased digitisation and more choice, all in the shadow of Covid-19, means that for many businesses the next few years may be spent grappling with how to best their employees can move around.
There is the potential to hugely increase the number of suppliers a business must manage, with a commensurate rise in contracts and providers, administration, invoicing and expense reclaim, with the effect that cost control becomes a more complex issue, requiring more oversight.
This could lead to costs becoming more varied and harder to track, and in order to have some clarity around these choices and the financial impact of them, it is important to have a payment solution that ensures you have real time information, consolidated invoicing and reporting, and the ability to control what is being spent and where. These areas of spend will include:
- Booking charges
Another issue to consider with wider mobility choices is security. Necessarily, signing up to more apps and more booking platforms means employees’ giving important company details and financial information away to more organisations.
As a consequence, ensuring you have rigorous payment security protocols in place to avoid fraud or data breaches will be important.
By understanding the costs of each mode of transport, from company car to e-bike, and then putting in place rules or guides for what is deemed an acceptable amount to spend on each, businesses can keep control while also giving employees support, and freedom.