This bulletin looks at government investment into commercial firms prompted by the QLD Government's possible investment in Virgin Australia.
Transport is a sector where ‘business as usual’ no longer applies. Smartphones and ride-sharing began a disruption which is continuing to shape the industry.
New transportation service offerings are emerging ― such as ride-sharing, Mobility-as-a-Service (MaaS) and micro transit such as electric scooters. These services, the technological platforms that tend to underpin them and changing consumer behaviour, will transform transportation.
The coming disruptions in the transport sector create both opportunities and challenges for governments, transport regulators, transport providers and the travelling public. They can no longer think about service quality and efficiency in individual transport modes. Instead there is a need to take a broader network and policy perspective.
Governments’ historical roles as transport service operators, regulators and owners will also need to evolve. While their role as a provider of last resort is likely to remain essential in many parts of the country, governments should consider reshaping their role. They focus should shift to ensuring users receive high quality services as efficiently as possible by incentivising operators to innovate.
In a similar vein, greater numbers of electric vehicles will accelerate the decline in fuel excise, as electric vehicles currently pay no charge related to road usage. The upshot of this is that road pricing or, rather, transport network pricing, will need to be implemented. While there are no shortage of practical, regulatory and equity challenges to this implementation, the outcome should be the more efficient utilisation of the transport network.
Read more from Frontier Economics on Next-Gen Transport