International, interstate and inter-urban mobility have been slam-dunked over the past 12 months. The combination of motor vehicle, public transport and communications expenditure fell from a trend level of 7.3% of gross household income in 2020 to 5.7%.
Most of that fall was in public transport: air, rail, light-rail, buses, and taxis and limos. Therefore, the combination of fares and communications amounted to just 1.9% of gross income in 2020, when it is normally around 3.5%, as seen above. Few were in the air, in a car going to work or too far from home, or on a tram, train or bus in 2020. It was one of the most surreal periods in anybody’s memory up to the age of a hundred!The COVID-19 pandemic has changed our mobility patterns and habits, perhaps forever. As a result, more of us work from home, travel domestically rather than abroad and shop online. In addition, some of us have left the cities and moved back to the country.
Two of these trends were already increasing before the COVID-19 pandemic anyway: partial or total working from home, and online shopping. They accelerated during the pandemic, but will resume their pre-pandemic trajectory within a year or two of the pandemic being contained.
Few people realise that wars, recessions and depressions have no lasting impact on trends. They are simply disruptive. The long-term changes come from two entirely different causes: outsourcing of non-core DIY activities in households and businesses (that account for over 90% of new jobs and industries) and new utilities, technologies and systems. Therefore, a move back to the country will likely be an intermediate trend only, as will Australian holiday travel vis-a-vis global travel.The good news is that mobility is becoming cheaper as a share of household expenditure, as the next chart shows. This chart looks at mobility costs as a share of household expenditure rather than household income, which we used in the previous chart.
Having peaked at just over 15% of expenditure, spending on mobility is now down to under 10% on a trend basis. This decrease is due to motor vehicle ownership plateauing, operating costs coming down (with cheaper petrol, less mileage per vehicle per annum and the progressive take-up of electric vehicles), lower costs for international travel and massive productivity gains (with ever-falling costs) in telecommunications.
As a result, the mix of products in mobility is changing, as we see in the final chart.
What we see is:
- The COVID-19 pandemic’s distortion on the mix of mobility in 2020.
- Motor vehicle cost shrink from 68% of mobility outlays in 1960 to a probable 55% in 2030, with the motor vehicle purchase component falling the most (from 40% to 20% of the total).
- Motor vehicle operating costs being likely to experience a huge reduction in the long term, with the rising popularity of electric vehicles.
- Public transport remaining largely steady as a share (held up by air transport), and likely to include ride-sharing or driverless taxis (a la Elon Musk’s predictions) as part of its 18% share in the future.
- Telecommunications (virtual travel) being a clear winner in the race, with more to come through 5G and 6G, 3D and holography, further enhancing the virtual travel and meeting experience.
Public transport took a beating in 2020 and this is carrying over into 2021 due to fears about transmitting COVID-19. Although these anxieties will likely pass, the components in public transport will change, as suggested.
In short, we will likely resume the changes that were occurring pre-pandemic in our post-pandemic world.
