Sustaining Public Services during the COVID-19 Pandemic: Experiences and Lessons from and Korea1 June 2020

Public Disclosure Authorized

1. Introduction As countries respond to the COVID-19 pandemic by imposing lockdowns, social distancing protocols, and stay-at-home orders, the sector is suffering from both demand and supply shocks. Despite these impacts, the sector is critical in ensuring essential transport services during the outbreak, and in supporting the economic recovery and citizens’ lives during the gradual reopening, while at the same time controlling the spread of the virus. As the earliest nations to go through the outbreak, containment, and reopening sequence, China and the Republic of Korea are positioned to offer valuable lessons for other countries.

This note summarizes the policy responses of their respective governments and looks at some Public Disclosure Authorized operation-level experiences of public transport operators in Shenzhen and in China, and Seoul in Korea to see if there are any valuable lessons or insights that might be gleaned from them.2

2. The Impact of COVID-19 on Public Transport Systems

A. Plummeting ridership and slow recovery In China, 27 provinces and 428 cities completely suspended their public transport services during the outbreak. 3 In the first quarter of 2020, passenger transport in 36 major cities in China dropped by more than half. Total passenger transport trips were only 43.3 percent of the amount Public Disclosure Authorized during the same period in 2019, with ridership down to 41.7 percent, metro/ to 45.7 percent, and taxis (traditional) to 43.2 percent.4 Although cities witnessed various impacts and recovery speeds, the ridership generally plummeted right after the outbreak and slowly recovered to about half in the subsequent months after reopening (for example, see Beijing in figure 1 and Shenzhen in figure 2). The pace of recovery also varied among cities. For example, by late April, and metro ridership had recovered to about 40 percent of its 2019 level,5 while in Hangzhou the recovery, by late March, had already reached 50–60 percent.6 Public Disclosure Authorized

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Figure 1: The effects of COVID-19 on public transport ridership in Beijing Source: Guo Jifu, presentation on World Bank Transport GP webinar series

Figure 2: Shenzhen Bus Group Ridership Source: Shenzhen Bus Group (SZBG) Private online taxi hailing was also hit hard by the outbreak, but its ridership rates seem to be rebounding faster than traditional public transport. In February, more than 50 cities suspended online taxi-hailing services on Didi (which operates 90 percent of the online taxi-hailing services in China).7 In Dongguan, online hailing orders dropped 56 percent in Q1 2020 compared to Q4 2019.8 By April, Didi got back 60–70 percent of its ridership level before the pandemic.

In the case of Korea, the ridership decreased by 60–70 percent for inter-urban bus services and by 30–40 percent for urban bus services, compared to during the same period of previous year.

B. Financial difficulty for operators and drivers With plummeting ridership and increasing costs to ensure essential services and the safety of passengers and employees, public transport operators have been incurring massive financial losses. According to the bus operating company SZBG, the revenue of the Q1 2020 is about 42

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percent lower than Q1 2019. Although the operational cost is also slightly lower due to cancelation of some bus services—manpower saving, and since all run on electricity, electricity and charging-service costs were also saved—it was partially offset by the costs of sanitation and personal protective equipment (PPE) needs. For the first three months of 2020, SZBG suffered a CNY 320 million financial loss due to COVID-19.9 The financial losses are expected to gradually ease off with the recovery of ridership.

3. Government Responses

A. Central Government: Coordination Mechanism & Guidance The central has established a COVID-19 Joint Prevention and Control Mechanism at the national, provincial, and local levels for efficient resource allocation and streamlined decision-making. Through this centralized chain of command, the central government is providing local governments and public transport operators with in-time technical and financial guidance about the outbreak and the expected schedule and approach to re- opening. “Technical Guidelines for Disinfection of Public Transport,” issued by the State Council’s Joint Prevention and Control Mechanism in late January 2020, sets out provincial- and city-level disinfection procedures for cars, trains, planes, ships and other public transport vehicles.10

Similarly, “Guidelines to Anti-COVID-19 Measures in Passenger Terminals and Transport Facilities Based on Different Risks and Areas,” issued by the Ministry of Transport (MoT) in March in response to the rising rate of work resumption and public transport ridership nationwide, provides transport service providers with guidance regarding reopening strategies and procedures. MoT has updated these guidelines every month to reflect how the latest policy thinking is tracking the fluidly evolving transition from shutdown toward recovery. 11 The publication specifies the frequency and procedures for, among other things, disinfection, ventilation, personal protection, operation adjustment (including load and occupancy control), and public communication. For example, it instructs that the occupancy rate for all inter-city passenger transport should be less than 50 percent; passenger density on buses should be no more than 4 passengers per square meter in high-risk areas, and 6 passengers per square meter in moderate-risk areas. The maximum occupancy rate for subway trains is 50 percent and 70 percent in high-risk and moderate-risk areas, respectively.

When started to re-open its public transport services in late March, it signaled that China had fully resumed its public transportation and urban rail transit services—just two months after the onset of the coronavirus outbreak.

B. Central and Local Governments: Relieving Financial Burden Public transport operators in China, typically state-owned enterprises (SOEs), rely on government subsidies to make up the gap between operational expenses and revenues. During the pandemic, local governments provided substantially higher subsides to ensure the survival of the

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public transport system. The central government waived the value-added tax for public transport services in 2020 and extended the period of purchase tax waiver and additional fiscal incentives for upgrading bus and taxi fleet to new-energy vehicles (battery electric, hybrid, or fuel-cell vehicles) till the end of 2022. For their part, local governments and financial institutions, following further guidance from the central government,12 offered financial support to operators and drivers. This included lowered licensing and rental fee, reduced-interest loans and financial guarantees to taxi operators and drivers (including online taxi-hailing drivers), relaxed insurance terms for operating vehicles, and reduced fees from service providers such as GPS monitoring and navigation companies.

Similarly, the central government of Korea provided nationwide support to bus operators by waiving insurance payments for three months and extending the maximum allowable lifespan for ageing vehicles by one year. This has saved many old vehicles that were due for scrappage between July and December 2020, and effectively allows them to be used one year longer than legislation permits. This, however, applies only to vehicles that pass safety and emission inspections. The central government’s budget contains appropriations for additional support for both urban and inter-urban bus services, amounting to 25 billion won (USD 20 million), to be matched by local government budgets for their respective provinces and cities. Additional measures implemented by Seoul Metropolitan Government (SMG) to mitigate the shock to operators’ finances include

• Setting up an emergency fund to provide masks, hand sanitizers, and disinfection, including labor cost. Based on the principle of ‘first execution, then settle,’ and Bus Association first purchased the resources with their own budget, and then settled with the emergency fund later. This helped to expedite implementation and cut through bureaucratic red tape. Cumulatively, tens of millions of dollars’ worth of equipment have been requested, and the fund has consistently offered timely support. • Indirect support by cooperating with the operators to allow for reduced hours of operation and advancing by several months annual subsidy payments that they are entitled to. • Operational subsidies, in the form of direct financial support for bus and taxi operators, are currently under review. To ensure transparency and fairness, the operating subsidies will be based on the operational data collected from the use of fare cards and historical data. Based on the SMG’s budget for operating subsidies, which are regularly set based on such data and operators’ performance, the necessary financial support is estimated through consideration of the losses due to lower demand, compared to the same period in previous years.

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4. Public Transport Operator Responses

A. Coordination and Preparedness To respond to the pandemic effectively, Seoul’s public transport operators needed to be able to make prompt decisions and coordinate different departments. For example, SZBG established an emergency health and safety working group, which makes decisions on operational adjustments, essential service provision arrangements, an emergency procurement plan for sanitation and PPE, and so on. This centralized chain of command was highly efficient during the crisis period and in preparing for the re-opening. During the outbreak and lockdown, the priority was to ensure essential services, while re-opening meant that operators needed to sustain high-quality services (operationally and financially) albeit within a new norm of disease control.

B. Ensuring Essential Services during a Lockdown Having a functioning public transport system was crucial for providing essential services during the pandemic. Even in extreme situations—for example, in Wuhan, during the period of the strictest lockdown—buses were used to transport critical medical personnel and supplies. To keep essential public transport services open, besides the coordination mechanism, there are several other key aspects considered:

• Operation adjustment was made according to passenger demand and identification of essential services. In some cities, existing fixed-route and on-demand public transport services were repurposed or retrofitted to provide commuting services to health workers and food and other delivery services to the locked-down population. For instance, during the lockdown, SZBG reduced the dispatch frequency of buses on all regular lines (especially branch, night, and peak routes) to discourage unnecessary travel, enabling SZBG to dispatch 500 buses to assist medical staff and other crisis-related personnel to commute. Such flexibility in the system helped both the operators, who experienced significantly lower demand and thus were able to reduce their operating costs, and passengers who relied on these targeted services to sustain their livelihoods. • Information and communication: Operators have used various means to inform passengers, such as broadcasting, station screens, posters, placards, leaflets and banners to discourage unnecessary travel and educate users on appropriate emergency responses. Besides company websites and local news as well as other media outlets, information dissemination platforms such as WeChat as well as the city’s or operator’s smartphone applications, were used so that passengers could receive up-to-date information especially on schedule changes. • Leveraging of the private sector: Private-sector ride-sharing solutions that are based on real-time demand and supply information enable relatively quick adjustments of service routes and schedules in response to changing travel and delivery demand.

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C. Reopening with the New Norm

(1) Keeping drivers and passengers safe During the pandemic, and for a long recovery time afterwards, it was necessary to implement preventive measures to ensure the safety of passengers and workers. Measures implemented by transport authorities and operators range from load control to reducing passenger densities, ensuring logistics, leveraging technology, and flexible management. Governments and local administrations have set protocols and guidelines/requirements for disinfection commensurate with risk levels. Such a rule-based approach helps ensure consistent practices and risk management, especially in those cases where public transport services are provided not only by the municipality but also by private firms. Some specific measures implemented include:

• Mandatory quarantine and health monitoring for staff: In Chinese cities, during the outbreak, staff of public transport companies who were out of town during the preceding 14 days or exposed to confirmed or suspected cases, were not allowed to work on site. Seoul metro also employed a comprehensive safety approach. As of April 1, 2020, Seoul metro had zero employee confirmed cases. • Disinfection and ventilation: Adoption of frequent and regular sanitization by public transit providers to disinfect their rolling stock, buses, taxis, shared bicycles and premises, from offices to depots, stops, and stations. For example, SZBG required disinfection of the buses and taxis after each service trip. Many public transport operators also provide hand sanitizer and portable hand washers for both passengers and employees, in both buses and taxis. Steamed disinfection of chairs is done twice a month by Seoul metro. Another measure is to keep bus and taxi vehicles well ventilated, for example, by turning off the air-conditioning and opening the windows. • PPE and temperature monitoring: In China, temperature checks for drivers are conducted each day before their shift, and wearing a mask is a must for both drivers and passengers. The public transport companies distribute face masks to drivers every day. For SZBG, face masks may also be provided for passengers if requested. In Seoul, masks are placed on buses for use in case of emergency upon passengers’ request, and thermal imaging equipment has been installed in five bus terminals. Drivers and station workers are also protected by screens or shields.

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• Load management: The Chinese MoT set a “No more than 50% Passenger Load” rule during the outbreak (or in the “high-risk” areas) on public transport to minimize physical contact. An innovative subway reservation system was piloted by Company to create staggered access at two of the busiest subway stations in Beijing during peak times. Passengers use an app to specify when they plan to enter the station. It works by means of a QR code on the user’s phone that gives the passenger a half-hour time slot to enter the station. The rationale is that the reservation system will prevent long queues inside the stations by encouraging waiting at home or at work. In another experiment/pilot, SZBG instructed passengers to board the buses through the backdoor only to better manage crowding during boarding and to protect drivers. • ITS-enabled monitoring to reduce crowding: With monitoring data from Intelligent Transport System (ITS), service schedules (frequencies, operating times, number of routes) were adjusted to ensure that service supply is trimmed when less critical, while reinforcing critical services to minimize overcrowding. SZBG is using an Intelligent Operation System to facilitate staff communication, assignment of tasks, and monitoring of the transit systems. The cameras equipped on buses and at intersections provide real- time information. Once the passenger density is forecast at, or approaches, the 50 percent limit, the system sends out as early warning signal to the fleet management to immediately dispatch additional buses to that station to pick up residual passengers. In Beijing, on-demand or customized buses and shuttles are deployed in case of crowding in metro or bus stations.

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• No-contact payment: A non-cash payment system was prevalent in China and Korea long before the pandemic. Mobile payment not only helps prevent physical contact and transmission of the virus, but also stores data on personal movements, which enables contact tracing and demand forecasting. Data security and privacy concerns, however, remain to be addressed. • “Minimal contact taxis”: SZBG has put a plastic divider screen between driver and passenger seats; drivers are instructed to open and close doors for passengers; sanitizer dispensers are provided inside taxis; one-time-use paper sheets are now provided for placement on the seat; and drivers are registered each day via QR-code.

(2) Big data and contact tracing • QR-code usage for contract tracing and certificates of good health: Contact tracing and isolation of suspected cases has proven to be one of the most effective strategies to reduce the spread of COVID-19. Beijing’s subway has set up a system of online pre-trip reservations and voluntary on-board check-ins with QR codes, providing an interesting example of how to improve traceability and reduce passenger density. In Shenzhen, there is a QR code on each bus and each taxi that passengers can scan when they embark on the vehicle. If any passenger is confirmed to be infected, other passengers who have shared or are sharing the same space receive text messages or phone calls alerting them to be further checked or quarantined. • Contact tracing through payment cards: SMG is using big data and analytics technology to track public transportation usage and the number of confirmed cases. In Seoul, buses, taxis and subways use an integrated smart transportation card system, used by more than 80 percent of their users. Such high level of smart card usage enables collection and analysis of real-time passenger movement and density data. This analysis is also used to set up specific disinfection measures that target vehicles or train cars with subsequently confirmed COVID-19 cases, as well as to inform the public. • Special work resumption routes: To address the high demand of returning passengers, Shenzhen Bus Company has adopted tailor-made “One route, one plan” services implemented using big data analysis and real-time adjustment. Passengers’ health information is also collected via the “iShenzhen” and “Epidemic Prevention” apps, allowing SZBG to develop “point to point” and “safety assured” special routes for essential medical staff and businesses to facilitate their work resumption. By the end of March, the Beijing Public Transport Group had opened 173 customized routes based on a massive survey among companies and the general public. • Privacy controversy: Big data and technology played, and continue to play, a vital role in containing the pandemic for transport management—in the form of mobile payment systems, QR codes, contact tracing systems, subway reservation, ITS for scheduling, monitoring, and management, and so on. This massive gathering of information raises

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questions about data privacy and security. While data protection concerns differ across countries and contexts, standardized protocols and legal rules may need to be developed universally to ensure that data use remains temporary, data storage is protected, and only such data is collected as is necessary for epidemic control.

(3) Managing demand • Flexible working hours and telecommuting: Governments encouraged all employers (except essential service providers) to use telecommuting, implement flexible working hours, video conferencing, and home-based work, and avoid gatherings. Beijing government issued a ‘flexible working hour notice during COVID-19’ to all entities and businesses in Beijing to encourage large enterprises and agencies to implement staggered working hours with 30-minute intervals starting from 8 a.m. to 10 a.m. Similarly, in Seoul, employees are split into teams working in separate office spaces while encouraging others to work from home. • Alternative non-motorized modes: Cities have experienced a huge shift in the transport modes that are available and that are being used. For instance, along with the work resumption, bike-sharing appears to be back on the rise in China. According to Meituan and two other major bike-share companies (Hello-Bike and Didi Bike), ride volume in Beijing has increased 120–187 percent compared to before the pandemic. Biking operators took the initiative to disinfect all bikes on city streets regardless of the brand. And given the price sensitivity of the typical bike user—for example, students—city governments such as Beijing’s have banned price increases for bike-sharing.

(4) Public campaigns, communications and training • Infection prevention guide and emergency protocols: Many operators have installed floor stickers to mark adequate passenger spacing, and displayed information on how to access medical help. SZBG has online training courses on virus prevention and control available to all staff members. Seoul Metropolitan Government (SMG) has provided a COVID-19 Prevention Guide in multiple languages (Korean, English, Chinese), posters, announcements, billboards, and video displays on subway trains and buses for foreigners. COVID-19 prevention information is also posted on public transit websites and apps, notices posted at bicycle rental stations, and text messages sent to users. SZBG has developed online training for employees, including frequencies and procedures for disinfection, emergency protocol, and so on. Some operators have also offered counseling with psychological professionals for drivers and employees who are in quarantine or under self-isolation. • Schedule change and disinfection information: Given the importance of communicating schedule and route changes to passengers, SBG has put daily disinfection information on its buses and taxis to give passengers confidence to ride.

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(5) Mitigating drivers’ falling income In China, bus drivers are employees of the operating companies and their income does not depend on fare revenues or ridership levels. Taxi services, however, are commercially operated. For example, SZBG owns the taxis and rents them out to individual drivers to operate. Drivers pay SZBG a monthly rental and a fixed maintenance and repair fee (all taxis in Shenzhen are electric). Given the sharp fall in taxi passenger numbers even during the recovery phase due to a significant decrease of night activities, SZBG has tried to reduce the financial burden of drivers by:

• reducing the monthly rental for drivers; 13 • offering daily operating incentives for the drivers to provide services; • reducing the charging service fee by 50 percent; • given the rising logistics and delivery demand during the outbreak, SZBG established a partnership with SF Express and assigned taxi drivers to delivery tasks, which generated significant income (often surpassing income from passenger ) during the lockdown; • With the practice of the ‘minimal contact anti-virus taxis’ described above, SZBG is considering transforming some of the services into premium taxi services which are targeted to customers with a higher willingness to pay.

5. Recommendations Going forward, the imperative will be to tackle the dual challenges of keeping the public transport system both safe and viable in the long run. Based on the experiences of Shenzhen, Beijing and Seoul, the lessons that emerge about appropriate responses to COVID-19 for public transportation include:

• Sustain essential passenger services. Governments should consider how to intervene before the crisis does irreparable damage to the financial sustainability of the public transport system and to the public’s trust in it. Public transport planners, managers, and operators see recovery as a long gradual process with multiple phases. Redesigning public transport services to be more resilient will require looking at what are the essential services and what should be the balance between fixed-route and on-demand services. Close cooperation between government and public transportation operators, and timely financial support for the operators, are needed for social and economic stability after the crisis. 14 • Implement emergency measures by public transport companies and operators for the safety of both public transport passengers and workers. High public awareness is also needed to maximize the efficiency and effectiveness of the fight against the virus. • Rebuild the public’s trust in public transport services. Government and operators might consider the use of apps that share and provide data, personal health certificates, and

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perhaps also “COVID safety” labels for operators certified by governments. Government will need to consider all funding sources for providing essential services. • Promote non-motorized transport (NMT) and alternative modes. Many cities have seen a large increase in walking and biking trips due to reductions in public transport and other services. These trips serve not only people’s mobility needs but also their physical and mental health needs. As a result, many cities have seized the opportunity to reallocate road space, temporarily or permanently, away from motorized vehicles and toward NMT, and some are accelerating investment in NMT facilities. • Use big data to realize targeted control measures, including traffic flow, operation monitoring, passenger demand forecast, contact tracing analysis. By analyzing big data collected through smart transportation cards in Seoul, the government was able to intervene with quick prevention measures and adjustments to the pandemic by using the data to track down confirmed cases. Big data also enabled transportation experts to grasp, in real-time, various usage patterns and movement inefficiencies within the public transport system and make adjustments such as rushing on-demand buses quickly to various points of the city to alleviate peak-hour traffic or over-packed vehicles. Adequate data security protocols need to be developed to create the kind of public acceptance and comfort with big data that would allow data analysts to fully leverage the power of big data in managing crises such as pandemics. • Leverage technology to improve operational efficiency and disease control: governments and operators might explore innovations such as mobile reservations of commuting times, use of non-contact fare collection and crowding monitoring and control. • Give play to businesses and employers. Post-crisis recovery requires the cooperation and collaboration of employers in all sectors to help stagger the return of commuters by hour and day. • Government should consider further investments in integrated management systems, digital solutions, and flexible contingency plans to handle future shocks.

ENDNOTES 1 This note was prepared by Yang Chen (Senior Transport Specialist, IEAT2), Yuan Shao (Extended Term Consultant, IEAT2), Jen JungEun Oh (Senior Transport Specialist, IEAT2), Georges Bianco Darido (Lead Transport Specialist, IEAT1) and Tabitha Wambui Kariuki (Intern, IEAT1). For further inquiry or discussion, please contact Yang Chen ([email protected]) or Jen JungEun Oh ([email protected]).

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2 The World Bank’s series of webinars attracts hundreds of participants from all over the world. Two webinars have been particularly relevant to public transport: “Ensuring Essential Transport Services during the COVID19 Outbreak: Experiences from Shenzhen and Beijing,” hosted on April 8, 2020; and “Knowledge Exchange with Seoul Metropolitan Government and Korean Metro Operators about COVID-19 Response,” hosted on April 22, 2020. More information including video-recordings and presentations can be accessed here: http://t.newsletterint.worldbank.org/r/?id=h8862e76,3b10188,3b42c24 and http://t.newsletterint.worldbank.org/r/?id=h8862e76,3b10188,3b42c23. 3 https://www.thepaper.cn/newsDetail_forward_5914134. 4 http://xxgk.mot.gov.cn/jigou/zhghs/202004/t20200422_3365000.html.

5 http://www.xinhuanet.com/info/2020-05/11/c_139046308.htm. 6 http://zj.news.163.com/20/0326/10/F8L0O7VD04098FC3.html. 7 https://www.ithome.com/0/476/339.htm. 8 https://static.nfapp.southcn.com/content/202004/16/c3414047.html. 9 Source: Unaudited estimation from Shenzhen Bus Group (SZBG) operational and financial data. 10 http://www.gov.cn/xinwen/2020-01/29/content_5472905.htm. 11 http://www.gov.cn/zhengce/zhengceku/2020-05/11/content_5510517.htm.

12 A summary of financial support guidance can be found at http://xxgk.mot.gov.cn/jigou/cwsjs/202006/t20200624_3399214.html.

13 The monthly rental fee was reduced by CNY 3000 (about a 40 percent reduction) in February, by another CNY 2500 in March and April, and by yet another CNY 1000 in May. Monthly maintenance and repair fees were also reduced—by CNY 600 (a 40 percent reduction) in February and March. 14 Please see the World Bank blog on “Protecting public transport from the coronavirus... and from financial collapse.”

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