Analyses
29 juil 20

Is Australia becoming a mobility leader?

As Australian Fleet Managers are finetuning their fleet strategies to meet the requirements of a post-pandemic “new normal”, a new trend surges in the country’s main cities. It’s a trend that the European ecosystem is aspiring to adopt for a few years already and is still struggling with: mobility.

It’s a common belief that Europe, with its densely populated cities, good public transport and an almost continent-wide push for sustainability, is the ideal incubator for mobility solutions. This might be very well the case on consumer level, but not so much on corporate level: a long tradition of the car-as-a-benefit, strong works councils and union representation and a consumer-focused supply chain are slowing down the implementation of corporate mobility.

Early adopters versus late adopters

But sometimes copycats do a better job. When Sony launched its first MP3 players, the consumer market understood the potential, but didn’t adopt right away. It was only when digital music players were perfected and their form factor improved, that the consumers massively converted from analogue to digital. Hence the success of Apple’s iPod.

Australia has now the potential to play a similar role when it comes to mobility solutions. There are several reasons to come to this conclusion:

  • Australian employees commute mainly by car. Public transport does not cover the needs of all Australian commuters and is perceived as being expensive. This is leading to massive traffic jams in the country’s major cities and has pushed parking costs upwards. Australia has come to a point where congestion has become a factor that jeopardizes economic growth and the need for alternatives has become imminent.
  • Australian cities are changing fast to become smart cities with less space for cars. Sydney, for example, is converting its inner city 3-lane-both-ways roads into one-way or single lane roads, with much less space for car parking and more and dedicated space for pedestrians, bicycles, and public transport.
  • Creativity and flexibility are part of the Australian Fleet Managers’ DNA. The country’s diversity (from city to desert), its climate (from hot and humid to cold and rainy), the huge distances between its main hubs and Australia’s relative isolation from the rest of the world has prompted local fleet professionals to find new solutions over and again.
  • There is no longer an Australian car industry as Ford, Holden, Toyota have closed their factories on the continent.
  • The consumer is embracing mobility. Global ride-hailers are successful and are driving the growth of the mobility ecosystem

The need for new fleet strategies

Factor 1: Compared to Europe, there are very few incentives for consumers or corporates to exchange a petrol car for an electric car. Government support for EV purchases is non-existing, and the same is true for tax cuts or deductibility of costs. Nevertheless, Australian corporates and consumers alike are conscious of the environmental impact of combustion engines and it’s not uncommon to see corporate strategies including elements of sustainability. The high cost of imported EVs and the lack of charging infrastructure however, lead to the conclusion that replacing an ICE vehicle with an electrified vehicle is costly and complicated. Reducing the CO2 footprint therefore needs to be done differently.

Factor 2: Australian businesses are already highly digitized and the need for professional kilometers is decreasing; this trend has accelerated because of the pandemic. The need for dedicated company cars has decreased and will continue to do so.

Factor 3: Australian businesses are looking for solutions to reduce their cost. The Australian economy depends heavily on export (especially to China) and import; China is also Australia’s largest investor country and its largest purchaser of debt. Amongst many other (political) consequences, this implies that Australian businesses don’t have full control over their success. For this reason, controlling and reducing operational costs is essential; translated into Fleet Management terms, it implies reducing the TCO of the fleet.

Can mobility work in Australia? The transition from Asset-focus to Trip-focus.

The prevailing belief is that the implementation of mobility requires a mature supply chain. Similarly to Europe and the US, the Australian mobility supply chain is not there yet: it lacks coverage, variety of solutions and, most importantly, it’s not profitable.

The biggest misconception however is that mobility solutions should replace cars. If this were the case, fleet managers would have to wait for autonomous vehicles to become part of the mobility ecosystem. Australia however has the potential to start an agile implementation of mobility – and seems to have the appetite to do so.

Even if a “car” cannot be replaced by mobility, certain “trips” certainly can. These can be commuting trips (the shuttle business in Australia is becoming a successful tool to fill in the gaps of public transport) or inner-city trips (bikes are already popular and there’s a good market for e-bikes to increase the trip distance and deal with some of the cities’ hilly landscapes).

Agile means: “Let’s do what we can do today and build on top of that.” Australian Fleet Managers are pragmatic and solution oriented; the country’s biggest fleet owner (Commonwealth Bank) and several governmental institutions have already started the implementation of combined fleet/mobility models and the industry interest is immense. Australia might have started the race well behind poll position, but is catching up fast.

Picture credit: Shutterstock

Authored by: Yves Helven
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