COVID Impact: Transportation
by Lilia Dashevsky
on June 09, 2020
by Lilia Dashevsky
on June 09, 2020
As all 50 states reopen, transportation companies, agencies, and safety guidelines are rapidly evolving. Transportation has been crippled by the pandemic, and steps are being taken to ensure the survival of the industry.
The two giants of ridesharing—Uber and Lyft—revealed that due to COVID-19 and social distancing, ridership was down 70% in the month of May compared to last year. That dip in riders had serious consequences for revenue—over the past several months, the two companies laid off more than 4,700 employees.
Both companies looked to the reopening of states—and the return to rush hour commutes to work—as a pathway to return to pre-COVID-19 revenues. However, this past week, Uber’s CEO said that the surges in ride requests were not coming during rush hour, but “party hours.” The drive to see loved ones, family, and friends was moving people more than commerce; “People want to get out again safely, where they want to get out again, they want to socialize again and kind of get as much as they can their prior lives back,” said Khosrowshahi. As of early June, it’s unclear whether these social calls were an adequate replacement to work commutes and, more importantly, enough to stem the falloff in revenue and ridership.
Both rideshare companies are communicating safety tips and guidance to both riders and drivers. Uber is going a step further and offering drivers disinfectant for their vehicles. And, as with the beginning of the pandemic, both companies are buckling down on their corporate social responsibility efforts and offering support to first responders, health care workers, and the companies’ communities. They are focusing on building goodwill with their contractors and their customers in an effort to endure where other efforts have failed as a result of the pandemic—a lesson we could see emulated across other struggling sectors.
Air travel has arguably suffered the most of any industry. Demand for future air travel is down 82%. In March and April, flights in the U.S. averaged at 17 passengers per flight. American Airlines alone had a net loss of $2.2 billion in the first quarter, received $5.8 billion through the Payroll Support Program, and is still expected to apply for a Treasury loan of approximately $4.75 billion. The airline industry was pummeled with negative coverage: stories of passengers not wearing masks, inadequate seats on flights for social distancing, and suspended beverage services for everyone except for first-class passengers filled the news.
For all those dark forecasts, the prognostics for the industry are starting to look up. According to JetBlue’s CEO, bookings are beginning to outpace cancellations in the U.S. for the first time since the beginning of the pandemic. The question now turns to the feasibility of flying. Some consumers won’t be flying for months or even years to come out of fear of COVID-19. Even with a 13.3% unemployment rate, experts are predicting that flight prices will continue to increase over the coming months.
Airlines are actively lobbying to implement temperature scans for travelers by the TSA, something they say should be the responsibility of the federal government. However, while the industry has seemingly gotten a hold of crisis communications situations, the next challenge will be increasing domestic travel by strategically marketing safety and reliability. For example, recently United Airlines debuted its own cleaning products in a partnership with Clorox in order to assuage concerns about cleanliness. Southwest is offering double and triple frequent flyer miles, and tickets as low as $49 in an attempt to lure passengers. Other airlines are utilizing influencers, organic social media tactics, and upping their responsiveness across various digital channels.
Unlike private companies, public transportation relies heavily on states’ reopening processes and funding. After months of social distancing, the thought of being packed into buses, metro cars, or trains is unnerving to those who rely on public transport to get to work every day. Different cities are implementing various new measures such as mandating masks, marking distance on floors, running trains more frequently, adding additional cars to metros, and more, but there is still one underlying issue: funding these changes. According to Axios, “Transit agencies are asking for nearly $24 billion more in federal help, on top of the $25 billion they received under the CARES Act, because their revenues have dried up.” However, even if that funding is allocated, these agencies still have to convince Americans that riding on public transportation is safe.
Even here in our backyard, public transportation organizations are suffering. The Washington Metropolitan Area Transit Authority (WMATA), has recently received $767 million in funding from the CARES Act as they face an unprecedented drop in revenue. Despite the 700,000 residents of D.C., the majority of the metro’s ridership comes from federal government workers who commute into the city from Maryland or Virginia. So, for WMATA, the convincing has to focus on the governors of Maryland, Virginia, the mayor of D.C., and the federal government. While the region has been fairly united in its response to COVID, the DMV is now split into various phases of reopening, with the majority of federal employees still teleworking. As with airlines and ridesharing companies, WMATA and its counterparts across the country will have to invest in PR campaigns that outline their extensive safety measures to their riders. However, unlike the other industries, public transportation already has significant negative sanitary and safety perceptions it must overcome in addition to COVID-19-related issues.
For now, it is increasingly looking as though the most reliable and safe method of transportation for most Americans will be using their personal vehicles. However, this assumes that those in some of the hardest-hit metropolitan areas, where individuals rely heavily on various modes of transportation, are able to afford their own vehicles and parking. Across the board, the entire transportation industry has an uphill battle to re-attract its customer base by communicating the safety measures and steps being taken in the age of COVID-19.
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