Could Covid-19 affect the future of the GWR franchise?

[irish_rail]

Moderator note: Split from https://www.railforums.co.uk/threads/great-western-franchise-extension-2020-to.198852/

Surely none of this is actually going to happen in a post covid19 world, passenger numbers are bound to reduce at the very least, probably for years to come.

 

[The Ham]

Surely none of this is actually going to happen in a post covid19 world, passenger numbers are bound to reduce at the very least, probably for years to come.

Whilst it's likely that those who used rail before would likely reduce their rail use for things like getting to work, that's likely to be only part of the picture.

For example there's also likely to be a call in the use of cars as well. Now car travel works well when the cars is used a lot, due to the high upfront costs. For instance if a car costs £2,500 a year (all costs counted) and rail costs £12 a day for getting to and from work, then if you are in the office 250 days a year then the car is cheaper than rail.

However if the costs fall to £2,250 and you're in the office 150 days a year (~£15/day) then rail starts being cheaper.

However if people were already using their car because for a few extra pounds a day (or because they didn't fully understand all the costs which they pay for car ownership) they'd rather have their own space, then the value of that personal space is going to start getting fairly expensive.

Anyway, of rail is going to set a fall in use, then chances are so will road, and given that road is 80% of travel and rail is 10% then a 2.5% shift from road to rail would offset a 30% fall in rail use. As such it would be surprising if we actually saw much of a fall in rail usage overall.

 

[HH]

Anyway, of rail is going to set a fall in use, then chances are so will road, and given that road is 80% of travel and rail is 10% then a 2.5% shift from road to rail would offset a 30% fall in rail use. As such it would be surprising if we actually saw much of a fall in rail usage overall.

That is just too simplistic - there are plenty of journeys where there is no rail equivalent and there are others where rail is the mode of choice. You cannot just agglomerate them all and make one assumption about shifts in mode. Everyone in the industry is expecting a fall in passengers except possibly where rail competes with air.

 

[TheLastMinute]

That is just too simplistic - there are plenty of journeys where there is no rail equivalent and there are others where rail is the mode of choice. You cannot just agglomerate them all and make one assumption about shifts in mode. Everyone in the industry is expecting a fall in passengers except possibly where rail competes with air.

I would agree with this sentiment as there are just too many factors. For example, if road usage drops say 20% then it could well shift a significant number of people back into their cars with reduced congestion making road less unattractive.

Personally, I think Covid is going to be with us for at least the medium-term, maybe long-term. Being in a metal box by myself seems a lot less risker for my health than being in a metal tube with a few dozen other people.

 

[The Ham]

That is just too simplistic - there are plenty of journeys where there is no rail equivalent and there are others where rail is the mode of choice. You cannot just agglomerate them all and make one assumption about shifts in mode. Everyone in the industry is expecting a fall in passengers except possibly where rail competes with air.

Whilst it's a fairly simplistic view, not least as I do understand that rail isn't a viable option for many trips, the view that road won't also be impacted by this as well is more simplistic.

Whilst rail will see a change in use, mostly from fewer people commuting, road use will also see similar changes.

There are several reasons why the ownership of multiple cars (and to a lesser extent any car) will see a fall.

Firstly we have all got used to buying stuff online, with one of the main problems with this being that people aren't at home to get the delivery. Well WFH will overcome this problem.

Next up is that we've seen what our towns and cities look like without cars and seen through the smokescreen of the claim that most vehicles are delivery vehicles. This is because deliveries are up significantly yet traffic is down significantly. Traffic congestion is down to the private motor car and those who wish for there to be better towns and cities as well as those who want more active travel now have a brilliant case study to point to as to what having less traffic can look like on the roads.

Another factor is that people will lose jobs (that's just the way it will be and whilst it will be terrible for those it impacts there's no point sugar coating it), as such there's not going to be the economy to support the purchasing of so many cars. As such there will be some who will have no other choice but to use public transport to get to work. Especially if that work is of unknown length. You certainly would buy a car for a job which may only last 6 weeks before you are then looking for a new job. Especially if some/all of the work being done is WFH.

Therefore if money is tight people may start to actually look at what their cars truly cost them and may decide that they can't afford the luxury of a few pounds a day to have their own space. Especially if the numbers of days which a car is being used falls due to working from home, which can significantly increase the daily cost of travel for work.

Given that office workers are likely to be amongst the last let back out, there's a good chance that there'll be some who let their car leases lapse to then consider if they truly need a car once they are back at work. Especially if they are still being to encouraged to work from home in 6 months time (personally I wouldn't be overly surprised if some social distancing isn't still in place in 2 years time whilst a vaccine is still being distributed, as it's likely 12 months before it can be shown to be safe, with then another 12 months of vaccinations at 110,000/day to get to 60% of the population, to deliver it much faster, bearing in mind that the whole world will also want it, would be fairly tough to achieve, as to deliver it within 6 months would be the best part of 1/4 million vaccinations a day probably at a time when the NHS was seeing more normal use of hospitals and GP's so would probably not have as many spare resources to deliver such a massive program).

There's another factor which is often overlooked, car ownership is generally higher in the older population, with many of the younger generations not owning cars. Likewise the numbers of miles each car drivers had been falling. Combined, this has been changing the way the country gets about. This virus is likely to further impact this.

Now whilst car usage could spike whilst there's the perception to need to avoid others (i.e. people driving to avoid public transport), such a spike is likely to be short lived. Not least as the roads could grind to a halt. As many urban roads see congestion during peak hours, however see little congestion during the school holidays when traffic volumes drop by ~10%. This is because it takes fairly small amounts of extra traffic to overload junctions. It also doesn't take very much about above the normal congestion to bring about gridlock. Therefore if we saw extra road traffic (maybe even just from the extra delivery vehicles) it could make driving nearly impossible. Therefore long term an increase in driving at the expense of public transport isn't going to work.

One final point, what's going to power those cars? Long term it's not going to be the ICE, the problem is that EV's aren't overly green. They are less efficient than battery trains, which in turn are less efficient than EMU's.

However even leaving that aside the mining of the materials to power and provide the batteries for those vehicles is generally an ecological problem.

It had been said that our total electrical supply, to be able to be provided by sustainable power sources, needs to stay broadly the same (if not fall), charging a loaf of EV's is going to result in a very large spike. As such the age of the private car is, unless something changes fairly soon, likely to be coming to an end (at least as we understand it).

 

[HH]

Whilst it's a fairly simplistic view, not least as I do understand that rail isn't a viable option for many trips, the view that road won't also be impacted by this as well is more simplistic.

Whoa there, Trigger. I didn't say that car travel wouldn't be affected. It's just that the consensus is that it won't be affected as much as rail, at least in the medium term. The long-term is another matter, with all sorts of factors, heavily influenced by government policy; any estimate you make is likely to be wrong as there will be changes due to factors that we don't even currently know about, e.g. EV usage is very complex with a mixture of technology changes, government policy and social factors coming into play, all of which are subject to change. Everyone expects usage to go up, but that this might have a negative effect on rail, as cars may be seen as more eco-friendly than diesel trains.

In my view the one major factor affecting car ownership in the medium term will be the economic one, i.e. some will simply not be able to afford them. However, if they can in any way they will keep the car, because, for instance, it increases the pool of jobs available. Where I live, if you don't have a car, the options are very limited indeed.

I expect to see a reduction in work-related car journeys for those still in employment, due to home working, but that itself, and the reduction from economic causes, may encourage others to use the car instead of other modes, as the roads will be quieter. Otherwise, if you have need of a car now, you will still need a car in the future, even if you use it a little less often.

I'm not going to attempt to deal with all your points, I don't have the time, but let's just take one.

There's another factor which is often overlooked, car ownership is generally higher in the older population, with many of the younger generations not owning cars. Likewise the numbers of miles each car drivers had been falling. Combined, this has been changing the way the country gets about. This virus is likely to further impact this.

I don't know who overlooks this - it is well-known, although when we say older, car ownership does drop off for the very oldest. It will be affected by the other factors, such as more WFH and unemployment, but I cannot see why the trend would otherwise change because of the virus, so I suspect you are confusing causes and effects.

 

[The Ham]

Whoa there, Trigger. I didn't say that car travel wouldn't be affected. It's just that the consensus is that it won't be affected as much as rail, at least in the medium term. The long-term is another matter, with all sorts of factors, heavily influenced by government policy; any estimate you make is likely to be wrong as there will be changes due to factors that we don't even currently know about, e.g. EV usage is very complex with a mixture of technology changes, government policy and social factors coming into play, all of which are subject to change. Everyone expects usage to go up, but that this might have a negative effect on rail, as cars may be seen as more eco-friendly than diesel trains.

There's two big problems with EV's the mining in the materials for the batteries and the limit on how much renewable energy which can be generated.

This article is a useful read:

The Limits of Clean Energy

If the world isn’t careful, renewable energy could become as destructive as fossil fuels.

getpocket.com

In my view the one major factor affecting car ownership in the medium term will be the economic one, i.e. some will simply not be able to afford them. However, if they can in any way they will keep the car, because, for instance, it increases the pool of jobs available. Where I live, if you don't have a car, the options are very limited indeed.

One factor which could impact the ability to people owning cars is the price of fuel. In the short term it's very low (to the pint where the cost of trading crude oil has turned negative recently). This however will result in job losses for the oil and gas industry of this goes on for too long. That could then lead to prices going to very high if usage outpaces supply. Given that a vaccine, even if it were available today, would easily take 6 months to distribute (that's at nearly 1/4 million vaccinations a day to get to 60% vaccinated) then fuel use is likely to be more for quite some time yet.

Whilst there's always going to be some areas where a car is needed for work, about 85% of people live in an urban area (being a location with a population of more than 10,000), there's often a quote a few people for whom access to the job market is used as an excuse to keep a car. This is going to be more of just an excuse as the rates of WFH increase.

This is especially true given that you don't need to earn as much if you are not traveling every day. In that if you didn't need a car then your costs fall, let's say that costs you £3,000 a year in costs then you could take a pay cut of ~£4,500 and still have broadly the same account of money.

However for many that can be just part of the cost savings from not having to travel so far for work.

For instance if you have childcare costs and can reduce it by £10 a day during term time, then that's another £2,000 a year (£3,000 pay cut) which is saved.

Combined those things and you could go from a £25,000 a year job to £18,000 and still have the same account of money. Now again that's fairly simplistic, as there'll be other costs (such as travel to go on holiday or visiting family). However the other side of the coin is also true, in that if you are only traveling for 20 minutes (rather than say an hour) then you should have more time to make your own lunch and not need to buy coffee away from your home/office.

I expect to see a reduction in work-related car journeys for those still in employment, due to home working, but that itself, and the reduction from economic causes, may encourage others to use the car instead of other modes, as the roads will be quieter. Otherwise, if you have need of a car now, you will still need a car in the future, even if you use it a little less often.

Which is the very reason that the number of cars within a household are likely to fall, as the justification for a second car is going to get a lot harder for many.

I'm not going to attempt to deal with all your points, I don't have the time, but let's just take one.


I don't know who overlooks this - it is well-known, although when we say older, car ownership does drop off for the very oldest. It will be affected by the other factors, such as more WFH and unemployment, but I cannot see why the trend would otherwise change because of the virus, so I suspect you are confusing causes and effects.

The point that I was making was that car ownership rates were already changing, with younger people already owning fewer cars. This is likely to continue, and quite probably at a faster rate, after the impact of the virus is known.

 

[Energy]

One factor which could impact the ability to people owning cars is the price of fuel. In the short term it's very low (to the pint where the cost of trading crude oil has turned negative recently). This however will result in job losses for the oil and gas industry of this goes on for too long. That could then lead to prices going to very high if usage outpaces supply. Given that a vaccine, even if it were available today, would easily take 6 months to distribute (that's at nearly 1/4 million vaccinations a day to get to 60% vaccinated) then fuel use is likely to be more for quite some time yet.

This also affects the rail industry, I remember reading recently that battery technology doesn't make economic sense over a diesel right now in trains, this is mainly due to the costs set aside for a new battery pack though when the current one is worn out. If the fuel prices go up we could see battery trains become more popular as diesel makes less economic sense.

 

[HH]

This also affects the rail industry, I remember reading recently that battery technology doesn't make economic sense over a diesel right now in trains, this is mainly due to the costs set aside for a new battery pack though when the current one is worn out. If the fuel prices go up we could see battery trains become more popular as diesel makes less economic sense.

It's well-known that fuel prices affects modal shift. The current problem with batteries is the weight to power ratio. It's reasonable to expect that might get better. On the other hand, diesel engines are getting heavier, due to increased regulation, designed to make them less polluting. It feels like it is only a question of time until the economics favour battery - unless an alternative fuel can be found, of course. In which case, both technologies might be superseded.

Which is the very reason that the number of cars within a household are likely to fall, as the justification for a second car is going to get a lot harder for many.

I really doubt that there will be a significant change in second cars, outside economic necessity, which you already covered. People have more than one car because the different people in the household need cars at the same time for different purposes. That they do a bit of working from home doesn't change that. I speak from experience, because I was already working from home 50% of the time pre-covid and my wife only works three 6-hour days a week. But some of our travelling to work days are common, and we do solo car journeys outside work, so we often have need of two cars at the same time. Now if we lived somewhere like London then we'd be able to use public transport, but we don't and London households already have less cars.

 

[WelshBluebird]

Ignoring regular commuters, it is probably important to mention business travel too.
And given we are talking about GWR, where I work is probably a good example. We have a Bristol and a London office, and before all of this kicked off, travel between the two offices by train was pretty common, even first class if you need to get work done / where quick enough on the advances / didn't mind paying the upgrade yourself. Going forward, given the massive amounts of money saved by avoiding travel and the fact that we have been just as productive on remote meetings that we would have traveled for before, I can't see how a lot of that travelling will continue even when we are allowed to!

 

[The Ham]

It's well-known that fuel prices affects modal shift. The current problem with batteries is the weight to power ratio. It's reasonable to expect that might get better. On the other hand, diesel engines are getting heavier, due to increased regulation, designed to make them less polluting. It feels like it is only a question of time until the economics favour battery - unless an alternative fuel can be found, of course. In which case, both technologies might be superseded.


I really doubt that there will be a significant change in second cars, outside economic necessity, which you already covered. People have more than one car because the different people in the household need cars at the same time for different purposes. That they do a bit of working from home doesn't change that. I speak from experience, because I was already working from home 50% of the time pre-covid and my wife only works three 6-hour days a week. But some of our travelling to work days are common, and we do solo car journeys outside work, so we often have need of two cars at the same time. Now if we lived somewhere like London then we'd be able to use public transport, but we don't and London households already have less cars.

Whist I understand that there be quite a few people for whom a second car will still be perceived as a necessity. I do wonder if whether other options could work out to provide the travel options required for less money in many cases.

Whilst taxis aren't cheap you could spend £20/week, £1,000 a year, which sounds a fair amount of money. However few are likely to be spending less than that on purchase costs on their car, with other costs likely to be at least another £1,000 a year on top of that.

Since getting married I've never lived in a place with a population of more than 10,000 (so rural by government definition) and my wife and I have only ever had one car, because the cost of a second car would always have been more than the other travel options used.

What that does is it results in the train being used more for occasional travel.

Could we go car free? Possibly, but that would require further changes to the way things are done and having a local car club would massively help in that regard. However going car free certainly isn't the preserve of those living in London or other major urban areas.

 

[HH]

Whilst taxis aren't cheap you could spend £20/week, £1,000 a year, which sounds a fair amount of money. However few are likely to be spending less than that on purchase costs on their car, with other costs likely to be at least another £1,000 a year on top of that.

The cost of a taxi from our town to anywhere you might want to go is £15 minimum each way. To many places, e.g. the rail station, it is £25-30. Taxis are not a substitute for a second car, unless you are fortunate enough to be very close to such things as train stations, shopping centres, theatres/cinemas, etc. Even if I wasn't going to work at all, I'd be spending about £150 a week on taxis. Perhaps you don't get out much if you can manage on £20 a week.

 

[The Ham]

The cost of a taxi from our town to anywhere you might want to go is £15 minimum each way. To many places, e.g. the rail station, it is £25-30. Taxis are not a substitute for a second car, unless you are fortunate enough to be very close to such things as train stations, shopping centres, theatres/cinemas, etc. Even if I wasn't going to work at all, I'd be spending about £150 a week on taxis. Perhaps you don't get out much if you can manage on £20 a week.

As I said there's always going to be people for whom a car would be needed, however there's probably quite a few who could make changes to the way that they do things. For instance, how often do you need to go to the shipping centre or could most of that shipping be done online?

For most people (the majority of those 85% of those who live within an urban area, which is defined as somewhere with a population of over 10,000) most of their facilities aren't that expensive to get to.

As I've said I live in a rural settlement (circa 8,000) however it has a lot of things going on, which means that I have little need to travel long distances (3 pubs, 7 community rooms/halls in addition to the 3 churches, a few restaurants/takeaways, post office, travel agent, supermarket, amongst other things) although I'm also lucky that the settlement does have a train station, so that does reduce the need to go to other places by taxi. Also given that it's about 2 miles end to end with the station and most of the facilities are broadly in the middle.

Moderator note: Recent posts in this thread are now duplicating discussions elsewhere and there isn't any discussion relevant to GWR so I am closing this thread for now. If anyone has anything to add regarding the potential impact on GWR, please feel free to report the opening post in this thread, or this post, and let us know what you would like to post, and we will consider reopening the thread at that time. Thanks.