Article

Preparing for potential crises in the new mobility industry

Building resilience in the new mobility industry is crucial to mitigate risks and manage potential crises. Organisations need to identify, prepare for crises, and embed crisis management processes, and protect their reputation.

The novel structures and features of the new mobility industry have enabled it to thrive within the transport, logistics, technology, and automotive sectors. Often facilitated by digital platforms and technology, the new mobility industry has created many in-demand transportation products and services, such as ride-sharing, electric vehicles, autonomous vehicles (AVs), and mobility-as-a-service over ownership.

However, developments within new mobility can pose significant risks to both customers and organisations. It is crucial to consider how these risks can emerge and transform into crises, as well as the options available for management and mitigation. A proactive approach to crisis identification and preparedness is critical for organisations building resilience.

Why is crisis preparation important?

Many risks and resultant crises within the new mobility sector are difficult to mitigate without overhauling entire business models – forcing organisations to adopt a higher risk tolerance.

Striking a balance between producing an accessible technology platform, while delivering a productive service can be challenging. Failures can lead to users behaving carelessly or dangerously – which may result in serious injury, and even fatalities. The debate over responsibility sits at the centre of many of these potential crises – raising questions on personal safety, lack of quality guarantees, regulatory concerns, and employment status and protections.

Reputations of those within the sector are intrinsically linked, and is becoming more acute with the advent of new technologies – adding a further layer of complexity. For example, trust in the AVs sector is still developing and when accidents occur involving AVs, the health and safety standards of the entire industry are immediately questioned.

Negative impacts of poor crisis preparation

Risks in the new mobility industry can quickly manifest and lead to crises, which require deliberate and delicate management. It is important to identify and mitigate all threats. Businesses without appropriate crisis management plans may suffer various repercussions, including:

Damage to business reputation, via customer dissatisfaction and negative media backlash.
Serious disruption to supply chains, which could lead to severe business interruption or business closure.
Financial losses, through negative impacts to customer demand and potential legal fees.
Cyber events, involving accidents or malicious attacks that affect and disrupt a business’ digital systems, data, operations, infrastructure, or technology.
Regulatory issues, which could lead to investigations, fines, and disciplinary actions.

How to build resilience against crises

A proactive approach to crisis identification and preparedness is critical. In the event of a crisis, it is vital that a new mobility business immediately initiate crisis management meetings. This can enable organisations to mitigate damage, while ensuring that normal business operations are maintained where possible.

The following steps can help new mobility organisations build resilience against potential crises:

Establishing transparent escalation channels - As both consumers and operators accept greater risk, it is vital to encourage whistleblowing and feedback on both sides to allow data to be collected on incidents occurring and identify where a more existential crisis may be looming. This enables operators to adopt a proactive stance and initiate a crisis management response as early as possible.
Embedding practical crisis management processes - Crisis planning plays a critical role for broader resilience in industries with a higher risk tolerance. Practical, simple processes enable leadership and tactical teams to swiftly bring the right people together to develop an action-orientated strategy to mitigate reputational, financial, and operational impacts.
Fostering proactive reputation management - The pre-crisis reputation of an organisation is instrumental to stakeholder perceptions during a crisis. As such, building stakeholder capital through your BAU approach to communications is key – this could be through communicating transparently on your safety record, social impact, or environmental standards. In times of both crisis and normality, a transparent and bespoke approach to communicating with your stakeholders should be one of an organisation’s key functions.
Preparing employees and key stakeholders - Trained employees are essential for leading a successful crisis response. Therefore, it is crucial to ensure all members of the leadership and tactical response teams have the opportunity to build ‘muscle memory’ around crisis management best practice.

Next steps

While new mobility services have the ability to revolutionise the transport, logistics, technology, and automotive sectors, the risks introduced by these transformations require a proactive approach to crisis identification and preparation. Appropriate mitigation allows organisation to deal with risks and ensure that business can be conducted as normal.

For further discussion on how to build resilience within organisations embracing the new mobility sector, contact your Marsh adviser.