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News Article

Disruption Spurs Mobility Transformation

By Alicia Arizpe | Thu, 03/25/2021 - 12:24

You can watch the video of this panel here.

The COVID-19 pandemic disrupted mobility to an unprecedented degree, fully changing how people and businesses move and operate. Trends that were gradually penetrating the sector, such as electrification and data analytics, accelerated and are now even commonplace. In the panel “The Future of Shared Mobility vs Car Ownership,” speakers agreed that the sector is almost unrecognizable when compared to its pre-pandemic condition. Mobility companies have had to get creative regarding their product portfolio, while providing safer services for their users. “This year brought significant opportunities to innovate,” said Juan Andrés Panamá, CEO of Mexico and Argentina at DiDi, during Mexico Automotive Summit on Thursday, Mar. 25.

The world changed during 2020. “In Latin America we thought that we had seen everything. We were wrong,” said Raymundo Cavazos, CEO of Volvo Car México. In its early days, the pandemic brought Mexico to a near standstill as many began to work from home, non-essential businesses closed and people started to avoid leaving their homes to buy food and other necessities out of fear of coming in contact with the virus. This meant a sharp reduction in mobility services. “Demand plummeted last year. In March and April, it fell by 50 percent,” said Panamá.

Traffic, one of the main annoyances of daily commuters, was also down. However, traffic is gradually coming back as lockdowns ease and vaccination programs advance. “Although there is less traffic now, do not be fooled. Traffic will return,” said Anasofía Sánchez, Director General at Waze LATAM. She reports that in 2020, Waze saw an 80 percent mobility drop in Mexico City. However, it is slowly picking back up. “To this date we have seen an 80 percent recovery in traffic from its lowest point and we estimate that we are still 20 percent below pre-pandemic levels,” she said. Moreover, lockdowns seen in December did not hit mobility as hard as those in March 2020, Sánchez added.

While the world might slowly be going back to normal, the changes the pandemic brought are here to stay. One of these is the reevaluation of car ownership as consumers balance mobility as a service with an increased feeling of safety in their own vehicle. Traditionally, Mexican culture has favored car ownership. “We are one of the countries with less financial incentives for buying new cars but there is significant interest from the general public in acquiring one,” said Sanchez. Before the pandemic, however, mobility apps led younger generations to question whether they truly needed a car of their own. “Ownership relevance is changing as Mexicans are now realizing they just need the service,” argued Cavazos. However, car ownership came into the spotlight again as users of public transportation or mobility apps questioned the safety of those services. “Cars are taking a new role during the pandemic as they give an unrivaled sense of security against other mobility options,” said Sánchez.

Consumer preferences are changing especially regarding public transportation. “We are seeing a migration to our service from those who used public transport but are now looking for a safer choice,” said Panamá. However, public transportation still plays an essential role in the lives of a significant percentage of Mexicans. Even those who use mobility apps incorporate public transportation into their daily commutes. “Clients are using our services as a way to connect with public transport and not always a replacement. About 8 percent of our trips in Mexico City have a connection with a means of public transportation. About 2 percent of those trips end or begin with public transport, especially in the outskirts of Mexico City,” said Panamá.

While public transportation can make some nervous amid the pandemic, “governments are also looking for ways to make public transport safer,” said Sánchez. One strategy has been the use of data analytics, which can help to identify traffic peaks and address them. “We have significant mobility data that we can aggregate and share with governments to help them make mobility decisions,” said Panamá. DiDi has worked with the governments of Guadalajara and Puebla to help reduce traffic and improve mobility across cities. Technology can also help prevent crimes. “In the State of Mexico, our platform is connected with C4 and C5 security centers that allow users to contact them instantly if they do not feel safe,” added Panamá.

As a large number of individuals stayed home, delivery services boomed, as well. This has forced companies of all sizes to adapt. From small restaurants to multinational chains, companies have had to embrace fast-changing consumer preferences. “The main winner during this period was not e-commerce but omnichannel sales,” said Sánchez. “Delivery has also grown significantly. From our platform we have seen an enormous increase in online purchases and drive-thru pickups. In other countries we are even observing that stores are renovating to facilitate this practice.”

While some prefer to pick their items at a store, many also prefer to have them delivered, argued Panamá. “Before the pandemic we had food delivery services in three cities. Now, DiDi Food is present in 40 cities as people no longer want to go to restaurants.”

Altogether, the pandemic fully changed mobility in cities. As consumers change, mobility providers are forced to change alongside them. “We have to evolve as the sector needs to change,” said Cavazos. Flexibility and a successful strategy can be the difference between survival and growth. But as the sector moves forwards, it has to keep the needs of clients at the forefront. “Staying healthy and safe is the main priority for our clients. Digitalization is facilitating new ways to help in this regard,” said Panamá.

Alicia Arizpe Alicia Arizpe Senior Writer