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Public Transport and the COVID Recovery

Hatch

Public transport operators have a critical role to play in limiting the spread of COVID while simultaneously getting people and the economy moving again. Unfortunately, as the world navigates through unprecedented times, they are taking a hit. Transport for London is anticipating a shortfall of £1.6 billion between April and October due to reduced ridership and San Francisco’s Bay Area Rapid Transit system expects to lose over $975 million in revenue.

Like with everything else right now, there are many unknowns about the future of public transport. Some believe that ridership will fall over the short, medium, and long term while others are more optimistic. Many are hopeful that car use will decline and the (positive!) impact on air pollution will help create a new mindset and policy future.

Whatever the case, public transport operators and public sector bodies are playing a key role in fighting the pandemic and can continue to do so into the future. The most progressive and forward-thinking will go beyond adapting their operations and balancing their books to use the opportunity to drive a more positive future. There are lots of ways practical ways this can be achieved if funding is made available or can be secured as part of COVID recovery funding packages.

Below I explore four ideas that demonstrate the potential of public transport operators as agents of change and, crucially, the case for public sector investment in transport as part of the COVID recovery.

(Re)connecting communities

There’s a lot of data to show that the impacts of COVID will disproportionately affect disadvantaged groups. Evidence from the Resolution Foundation illustrates that average annual household income in the UK could decline by £2,500 and unemployment could increase by 30%, with job cuts expected to be highest for the aforementioned groups. Further data from the Institute for Fiscal Studies substantiates this by setting out that in the UK around one-third of employees in the lowest-earning decile of income distribution work in industries that have been largely shut down by suppression measures compared to 5% in the top three deciles.

This is important to note because deprived groups are more likely to use public transport due to the cost of private transport and the fact that many live in more remote areas. This reliance on public transport may increase as their income will be hit the hardest.

Public transport agencies can respond to this by better targeting services to disconnected communities and ensuring that efficient, reliable, regular, and affordable services are available. Data related to ridership numbers, ridership profiles, and deprivation can support decision-making related to this. Discretionary travel and incentives would also support these communities. Such intervention would help the economic recovery as it would better connect disadvantaged groups to employment centres where most work and training opportunities will be. Routes could also be analysed and revised on a more regular basis to ensure that people can access emerging economic opportunities.

Such intervention will also help to bring people back into town and city centres allowing them to access services and leisure opportunities. This will support the economic recovery as public-facing industries have been among the hardest hit.

Retaining jobs and creating employment opportunities

Public transit not only connects people to employment opportunities but is also a significant employer in its own right (Transport for London, for instance, employs 27,000 people). Operators can underpin the recovery by working effectively to retain jobs and continue to provide good quality employment. This will require careful business recovery planning, which is likely to involve thinking about opportunities to generate more non-fare revenue and negotiating with the public sector and financiers to secure necessary revenue support during this time of uncertainty.

There’s also a clear case to continue investing in new public transport projects in the medium to long term as the recovery gets underway. Evidence shows that investing in public transport can lead to higher economic returns than investing in other types of infrastructure:

· A study of the impacts of the US economic stimulus following the Great Recession found that public transport investment generated 31% more jobs per dollar than new construction of roads or bridges.

· In South Korea, investment in public transport, biking, and railroads following the Great Recession created an estimated 138,000 jobs, with 15% of jobs created under the recovery programme.

· The Gautrain in South Africa, which opened shortly after the Great Recession, delivered a significant number of jobs to Gauteng and a favourable return on investment of R2.6 for every R1 invested.

Ultimately, any investments that operators and the public sector can make will help stimulate and support the recovery.

Building community wealth

Public transport operators can also help to build community wealth and catalyse local economic development over the longer term. As key anchor institutions, they can work with partners (e.g., local councils, police forces, universities, colleges, and hospitals) to redirect wealth back into their communities.

There is a wide range of options that can be explored in relation to this. For example, transit agencies could look to rapidly restructure their procurement policies to maximise the amount of expenditure to local businesses. The operators of the Gautrain in South Africa have already done this by creating a Transformation and Supplier Development Framework. Strict rules are set for procurement competitions – bidders for contracts above R30 million must subcontract 30% of the contract value to a local small business. If successful, they then must produce and deliver a Supplier Development Plan to support the development and training of the partnering small business.

Other options relate to better use of assets, local employment policies, and investment in community organisations. Lots of cities, towns, and anchor institutions are exploring and implementing these ideas, with some of the most prominent places being Preston, Plymouth, and Amsterdam.

Driving a green transition

While the pandemic has wreaked havoc on the world as we know it, the silver lining is perhaps the positive impact it has had on the environment. The COVID lockdown has significantly reduced the number of planes in the sky and cars on the road.

This had positive short-term impacts on the environment. There have been reports of clear skies in Delhi and clear water in Venice. Quantitative evidence from the University of Manchester shows that there was a 50%-80% reduction in traffic across Manchester over first few months of the pandemic which had a statistically significant (i.e., positive!) impact on air pollution.

The world is enjoying this cleaner air and most people are seeing the benefits of reduced car use, particularly in urban areas. There are new opportunities for physical activity and people are increasingly recognising that cleaner air is important for physical health and mental well-being.

This presents an opportunity for public sector bodies to introduce new policies and initiatives to create greener towns and cities with fewer cars (from Low Emission Zones to the pedestrianisation of town centres). The case for investing in clean and green projects is arguably stronger than ever before. Some places are at the forefront of this – in Toronto, for example, they have introduced ActiveTO in response to COVID, which involves closing off roads and significant parts of the city over the weekends to promote walking and cycling.

Public transport operators can put themselves at the forefront by driving positive change through lobbying other stakeholders to introduce green initiatives and by taking direct action. They can put green issues at the heart of their business plans and justify investment in this area. At a small scale, operators can focus on actions like improving the energy efficiency of their estates and ensuring drivers are fuel-efficient. At a larger scale, they can replace or refurbish existing vehicles to be more sustainable or actively invest in new infrastructure that makes public transport more efficient and convenient.

The current state of affairs will have a major impact on the way cities all over the world approach public transport. While it may be easy to get caught up in the complications of the pandemic, it’s important to envision a forward-thinking and positive future that is greener, more connected, and economically thriving.

Patrick Ransom, Senior Consultant , Urban Solutions, Hatch

Patrick is a senior consultant with Hatch’s Urban Solutions team specialising in economic development. Most of his work focuses on developing economic strategies, assessing the economic and social impacts of projects, securing public sector funding for proposals, undertaking economic and social research, designing economic development initiatives, and assessing the demand and need for proposed developments. He has worked with a number of transport operators, including Transport for London, the Gautrain Management Agency, and Metrobus, as well as focused on economic development in cities including the Mayor of London, the UK Innovation Corridor, and Oxford City Council.