On July 7, East Japan Railway Co., (JR East) announced that its railway business revenue in the April-June quarter dropped to 34.1% from the same period of the year before. In response to the anti-coronavirus measures to avoid the “3Cs (closed spaces, crowded places, and close-contact settings)” and by adopting a new lifestyle, President Yuji Fukasawa said during a press conference, “the company will start overhauling management policies to introduce a new fare structure, including a fare system in which rates vary by the time of day.” Besides, he indicated a revision of the operation time schedule of the first and last trains of the day (setting a later first train and an earlier last train) and a new scheme for commuter passes. The introduction of new policies is intended to alleviate congestion on trains during rush hours by shifting the peak of commuters, and to standardize the business productivity by time of day, though the actual implementation period was not clearly stated. In any case, based on the premise that “the same number of passengers will never return as before the COVID-19,” JR East is reported to proceed the initiatives from the perspective of long-term business management.

The largest economical adverse impact due to the new coronavirus pandemic was brought by “restrictions on people’s coming and going.” And yet, under a rallying call of “New Lifestyle,” adjusting to the new way of life is socially required, and realization of a digitalized “remote-operative society” is regarded as a key growth strategy for the next generation. In particular, sustainable teleworking in businesses is encouraged. In other words, public benefits such as mitigation of overconcentration in large cities, vitalization of local areas and enhancement of labor productivity are anticipated as a result of the stagnation of the mass traveling of people.

If a society coexisting with coronavirus or a post-COVID-19 world pursues the people’s minimal to-and-fro in daily life, the opposite business model focusing on expansion will never come into practice. In fact, a large number of major companies have announced a standardization of their work-from-home system and reduction of their office size. This trend implies the fact that the increase of fundamental revenue based on demand for commuter passes cannot be expected any longer. If this is the case, it is a matter of course that JR East, as a railway enterprise, contemplates new business strategies as stated above.

Ultimate targets of CASE (Connected, Autonomous/Automated, Shared, and Electric) and MaaS (Mobility as a Service) would be changed if minimal transportation is socially accepted in future. Besides, it is essentially different between large cities and local communities in terms of transportation quantity as well as quality. Any solution to settle the problem presentation on sustainability of local public transportation made by RYOBI Group in Okayama is not yet provided. On the other hand, supported by the fixed premise of continuous growth of business demands, the Second Tokaido Bullet Train plans that were designed back in 1970s have still been in progress even by changing the name to SCMaglev (superconductive maglev) train plan.

The COVID-19 pandemic has unveiled the underlying risks of today’s society where people’s traveling is an indispensable factor for the growth. Obviously, a simple minimization of the quantity is not the desired right answer. The point is a matter of quality. When facing enormous crises, and if we are struggling to establish a new society that is founded by alternative premises, now is the time to develop discussions from scratch for the grand design of nationwide public transportation systems covering big cities, local cities and also express traffic networks.
 

This Week's Focus, July 10

Takashi Mizukoshi, The President