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Newsletter 14, March 2022

Happy passengers but are there enough? Young people on bus!

Dear ,

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Financial meltdown for public transport operators?

This month marks two years since the WHO declared COVID-19 a pandemic. Lockdowns and working-from-home policies have been felt most seriously in business districts, where, until today, it is still often much quieter on the streets than it was back in 2019.

Most white-collar companies have embraced the working-from-home trend, and many of them have introduced hybrid working standards in which the average office worker will spend only around 50% of the working week in the office. The related office exodus is being felt in Manhattan, London, Tokyo’s Marunouchi, La Défense in Paris, and many other commercial hubs in cities around the world (for more details, see this recent article in The Economist). Public transport operators in these cities have been financially hit due to reduced passenger numbers, and many of them have received financial support over the last two years from state or city authorities.

Will there be a financial meltdown for public transport operators because many of the metro trains, buses, and trams are still less occupied than they were back in 2019?

Yes, if you talk with many of the operators. Financial aid is finite. In the Netherlands, where Modasti Consulting is based, the nationwide scheme to financially support public transport operators ends this August. Financial forecasts are especially bleak in London and New York, where public transport budget deficits of £1.5 billion (in 2024) and $1.4 billion (in 2025), respectively, are expected.

No, if you consider that cities have often bounced back from crises. Leisure trips tend to – at least partly – fill up the gap left by the office exodus, and this reduces the traditional inefficiency in public transport operations caused by commuting peaks (during which parts of staff and fleet sit idle in between the morning and late afternoon rush hours).

As you can see on the Newsletters and LinkedIn articles page of Modasti’s website, I devoted two newsletters and three LinkedIn articles to the effects of the COVID-19 pandemic on the public transport sector. Please have a look!

Never waste a good crisis

With the direct health effects of the pandemic fading out these days, a new crisis has emerged in the global arena. Besides the human tragedy, the Russo-Ukrainian War has led to soaring oil prices. Bus operators that still run diesel buses have been confronted with increased costs, and train and metro operators are puzzled about what the price of electricity will do in today’s disturbed energy market.

This energy crisis can also lead to two opportunities in the public transport sector:

  1. Speeding up the transition from diesel to electric buses (since the general expectation is that electricity prices will be less volatile than diesel prices).
  2. Welcoming new public transport passengers who are fed up with record high petrol prices for individual car travel (as an early example, New Zealand announced last Monday that public transport fares would be halved for some months to encourage this modal shift).

Modasti’s Projects

Recently, Modasti Consulting has been involved in two projects:

  • Project Manager/Operations Lead for Serco, an international provider of government services, in a Mobility Project in Saudi Arabia during a seven-week period from December 2021 to February 2022. This project includes the deployment of electric buses, electric cars, shared bicycles, and hydrogen marine vessels to transport guests and staff within the area of the Red Sea Project (a major tourist destination developed by The Red Sea Development Company).
  • For Movares, a leading Dutch consulting firm, Modasti Consulting is working in a multidisciplinary team to develop a 64-kilometre long bus rapid transit (BRT) corridor in the Netherlands. More information about this project will be in Modasti’s next newsletter.

Meanwhile in the city of ‘s-Hertogenbosch

Modasti Consulting is Arjen Jaarsma. As a strategic and innovative thinker, I support governmental authorities and transport operators in their decision-making processes. I will do this increasingly from Modasti’s base, the city of ‘s-Hertogenbosch in the south of the Netherlands.

Remote working and the reduction of travel and accommodation expenses (and time) will benefit both clients' costs and the consultant's productivity. Please do not hesitate to contact me if you have any further questions.

Arjen Jaarsma, Public Transport Expert at Modasti Consulting
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Arjen Jaarsma Public Transport Expert
arjen@modasticonsulting.com
+31 6 235 88 096
Modasti Consulting

Modasti Consulting B.V.

Hofvijver 177, 5223 MC ’s-Hertogenbosch

the Netherlands

www.modasticonsulting.com

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