UK 2020: Reimagining the UK's transit infrastructure

December 2020

Changing travel patterns and preferences due to COVID-19, Brexit, and environmental pressures have disrupted UK transport and mobility. The pandemic and its associated societal shifts (for example, working from home) are further pressuring systems in ways that vary across the regions and nations of the United Kingdom. McKinsey’s research into future trends and the potential impacts on transport demand and infrastructure has revealed no-regrets moves for transport systems—and some looming choices.

On December 10, 2020, GII hosted a peer-to-peer roundtable discussion with public-sector transportation operators, investors, and industry leaders from the United Kingdom to discuss how to adjust the transport network for the future. The key themes that surfaced from this roundtable are summarized below:

  1. Rebuild public trust in shared transit. In service of trying to stop the spread of COVID-19, the social narrative has warned users away from public transit. However, because of significant efforts by operators, public transit might be cleaner and more comfortable than ever before. To win back ridership, public transit operators need to shift attention to addressing perception of risk.
  2. Use the moment of disruption to create enduring change. Government can assume a curator role in transport and use its many tools to drive new behaviors and new funding models. Early evidence is promising, especially as long-discussed concepts, such as mobility pricing and third-party development, are receiving new levels of support when presented as potential solutions to the current crises.
  3. Look to existing assets for replacement revenue. Municipalities can take more advantage of valuable property by charging curb fees and transforming parking facilities into service centers as parking demand drops. Small charges aggregated across a high volume of assets (for example, streetlights) could provide some ROI on the investments that are currently a depreciating asset with maintenance charges.
  4. Address the talent gap. The skills needed in transport providers, like digital proficiency and management of third-party funding development and relationships, are in short supply within the current employee pool. Traditionally accepted wisdom that change is created by starting at the top is being challenged by the idea of bringing in digital natives and quickly raising them through the ranks. Public transit operators need to look outside of conventional sources for talent—indeed the COVID-19 pandemic is flooding the market with experienced workers while digital natives are looking to take their skills to firms that prioritize purpose, learning, and flexibility.
  5. Create investable propositions. The pace of change in mobility is challenging the industry’s culture, which reveres edifices that can be in service for a hundred years or more. Today's world demands projects that are flexible and may best be designed for a much shorter life span. In this environment, given the future landscape’s uncertainty, institutional investors may struggle to bet capital on projects with time horizons of 25 years or more. Transport operators should think creatively about how to build ecosystems and create propositions that attract external investment, learning from other sectors that have undergone similar transitions.
  6. Take a through-cycle perspective. Planning cycles don't always align with economic cycles. Government and investors must look beyond this downturn to what will be needed post-recovery to ensure sustained momentum in ongoing major projects. Adapting to major trends, such as shifting to electric buses, will take significant investment but will be required in the long term. If the momentum is lost, it could take it a very long time to get it going again.
  7. Look for lessons in other industries. As usage patterns of public transit change—in the face of pandemic impacts and new mobility models—transport operators can look to other sectors’ experience. In particular, utility providers (electricity, water, gas, and so on) have been managing load distribution for a long time and could provide useful models.

     

     

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