[New Wave] Turning COVID-19 into an Opportunity for Mobility Innovation

The novel coronavirus disease (COVID-19) is changing many aspects of our lives. People's mobility habits are no exception. With the expansion of remote work, the implementation of online classes, and the contraction of domestic and international travel and various leisure activities, everyday movement has significantly decreased.

The most affected mode of transportation has been public transit such as subways and buses. Since these services involve many people crowded together in enclosed spaces, citizens' anxiety was high. In late February, when the first cluster infection was reported in Daegu, subway ridership in Seoul dropped to as low as 40% compared to usual levels. Demand for railways and express buses, which handle long-distance travel, also sharply declined. Overseas ride-sharing services like Uber and Lyft were hit hard as well. Uber reportedly saw a 20% to 80% decrease in user requests depending on the region. Both companies are currently undergoing large-scale restructuring. Uber announced it would cut 14% of its workforce, while Lyft plans to reduce 17%.

On the other hand, private car usage only saw a slight decrease. People felt relatively safer using cars alone or with their family. According to Kakao Navi data, private car use temporarily declined immediately after the outbreak but has recently recovered to normal levels. Experts estimate that a significant number of former public transit users have shifted to passenger cars. Some automobile companies express optimism, saying the mobility paradigm is shifting back from "sharing to ownership."

Meanwhile, personal mobility sharing services such as electric bicycles and electric kickboards, which have recently gained popularity, have also seen increased usage. Since these are used alone outdoors, they are perceived as safer than public transportation. On May 20, the National Assembly passed an amendment to the Road Traffic Act allowing electric kickboards to use bicycle lanes, which is expected to further expand their use. Kakao T Bike, operated by Kakao Mobility, also saw a noticeable increase in rides per device compared to the same period last year.

As the contactless economy gains attention, interest in autonomous driving technology is also rising. In Wuhan, China, unmanned autonomous robots appeared to handle quarantine and delivery tasks. The image of autonomous vehicles performing tasks difficult for humans under the extreme conditions of the pandemic left a strong impression on many. Despite investment sentiment freezing due to COVID-19, in March, Google's autonomous driving subsidiary Waymo successfully raised $2.25 billion in external funding. Many are focusing on the new normal in the post-COVID era. Since mobility is a lifestyle habit, it is highly likely that many of the current changes will persist after the pandemic. These changes must be reflected in the government's mid- to long-term transportation policies.

The government is promoting keywords such as Digital New Deal and Green New Deal to revive the economy struggling due to COVID-19. The New Deal means the government artificially stimulates the economy through active fiscal spending. Various New Deal policies are possible in the field of mobility services as well.

A smart parking system to accommodate the increasing use of passenger cars is an excellent project that the public sector can pursue. Personal mobility such as electric bicycles and electric kickboards is an item that can generate economic effects in both manufacturing and services. Autonomous driving technology, which is attracting attention in the contactless economy era, can also be promoted through government support for demonstration services in various areas. Change always promotes innovation in any era. We hope that the global misfortune of COVID-19 will instead become an opportunity to accelerate mobility innovation.

Jaeho Lee, Director of Digital Economy Research Institute, Kakao Mobility