You’ll hardly find a smartphone without a transport app installed. Whether tailored commuting, ride-sharing, bicycle rental or even car-sharing, requesting such services is part of the routine of big city dwellers. 

In the city of São Paulo alone, the most popular of these apps, Uber, has 150 thousand drivers available every day to serve passengers. Across Brazil, there are about 500 thousand drivers and over 20 million Brazilian customers subscribed.

“The service of Uber partner drivers is considered an alternative to owned cars that, on average, are idle 94% of time,” Guilherme Telles, general manager at Uber Brazil, tells newspaper Folha de São Paulo.

No wonder the capital of the state of São Paulo is the city using the service mostly among the 65 countries where Uber operates – in addition to a host of other similar apps, such as Cabify, 99, LadyDriver etc. With 12 million inhabitants (21.5 million when taking into account the entire metropolitan region) that, on daily basis, considering all types of transport, sum over 43 million trips, 46% of them for work purposes and 30 million of them made using private cars. 

The outcome is São Paulo citizens’ everyday-struggle: traffic jam leads to an average commuting time of 1.5 hour and to productivity loss of 7.8% in the metropolitan GDP. The impact of this growing ride-sharing hype in this scenario is still uncertain.

Gridlock: do apps free or jam traffic?

To date, major evidences have shown that the higher use of car-sharing makes big city traffic worse. A study conducted in the United States by consulting firm Schaller concluded that for each 1 Km that app cars take vehicles out of the streets, they add 2.6 km, meaning that car influx goes up 160% – considering either individual or shared trips.

The same study showed that between 2016 and 2017, the number of transport app users has grown 37% in American cities, reaching the impressive number of 2.6 billion passengers that year. Big cities are the ones using this service the most: 70% of the total of trips are made in Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington DC.

The conclusion by the study author, Bruce Schaller, is that shortly, there will be fewer people on public transport than in shared cars. Therefore, more traffic jams.

Proposing a proper urban planning that ensures mobility and population wellbeing is a government commitment. And, in order to prevent traffic chaos, an alternative of little popular appeal may be the solution: charging fees and taxes. This is what Guillermo Petzhold, urban mobility expert, said in an article for Worldwide Resources Institute Brazil.

Petzhold mentions the state of São Paulo legislation, first of its kind in Brazil, as an example: taxes are charged not only by mileage, but by other broader factors such as gender equity, motor power (hybrid or electric motors) and service daytime (tax is lower outside rush hour). 

“New fees and taxes should not only increase revenue. They can go beyond that: make cities more habitable and transport more sustainable. This revenue should be used wisely, in such a way as to improve urban mobility as a whole,” he explained. He mentions the improvements in road safety conditions, building of bike paths and revampment or expansion of pedestrian spaces as possible measures to improve urban transport.

Car-sharing “reaches shantytowns”

The coverage area of transport apps has blind spots. A large portion of big cities is off range, especially more remote and peripheral areas. The justification is that there is little demand and lack of access. However, reality shows that, with few fixes, this business model may also work in such areas.

JaUbra, a company operating today as a startup in the heart of the peripheral district Brasilândia, in the northern of São Paulo City, proves that. In 2016, Alvimar da Silva started making trips in the area in a scheme based on the apps’ system, but adding some peculiarities. He would receive calls or WhatsApp messages for trips going in or out of the region and would charge a variable rate for time and distance – currently, each 1 km is worth BRL 1.8 and one minute BRL 0.80. 

When his daughter, Aline Landim, asked to leave a safe job to board on the venture, Alvimar was running business only with a mobile phone and a laptop. Now, the structure is much bigger – a smartphone app is about to come out. Same for the operation: there are about 4 thousand trips a month and over 20 thousand users subscribed, plus 80 active drivers (and over 400 in the waiting list). 

The business has been positive for all those involved. Drivers can work in their own neighborhood without facing long routes, heavy traffic and driving restriction days. And, sometimes, they earn even more than in other companies – the system keeps a rate of 15%, the most profitable among major apps. And residents have an efficient service that bridges gaps that even the public system can’t handle: take the elderly to doctor appointments and drive the youth for night outs to places where buses and vans do not run.

“More than two years later, we noticed that residents’ self-esteem has improved. Now, there’s a service for all, the young, the elder, those living in barren or narrow streets… Drivers always find a way,” Aline explains. “We received partnership proposals from the neighborhood’s shopkeepers, repair shops, stores, car wash owners. This is a way to drive local economy,” she concluded.

At the moment, JaUbra provides services via call center and WhatsApp – including the option to send audio, a solution to serve elderly customers. And the company area of business targets Brasilândia and neighboring areas, such as Freguesia do Ó and Bairro do Limão – “it’s important to be from the area because drivers know the streets, the residents respect them, they have mutual trust,” says Aline. The payment method is an example: 90% of trips are paid in cash, and when the customer only has card, there’s always a way – they can pay at gas stations or put on the cuff.

“When the venture started, we had no idea how it would impact the neighborhood. When we found out we’re a startup, we realized we have a social commitment: generation of jobs and income and offering of an important service to the community,” the entrepreneur completed.

How can car-sharing help urban transport?

The growth rate in the sector shows no sign of slowing down: today, the ride-sharing market is evaluated in 61.3 billion Brazilian Reais and is to reach US$ 218 billion by 2025. And it may render a revolution in the urban transport system.

Besides cars, another vehicle that is a hit in this sharing structure is the bicycle. The major companies in the sector, Yellow and Grin, together, sum up more than 135 thousand scooters and bikes available in seven countries, making 2.7 million trips in the last six months. The structure provided by the service allows users to borrow bikes (or electric scooters) in several spots in big cities. 

Replacing cars with bikes has three direct impacts: in health, pollution and pockets. With São Paulo as basis, the project Economia da Bicicleta (Bicycle Economy) informs that riding 1 hour generates benefits to health inversely proportional to the harms of exposure to pollution for 7 hours and that life expectancy falls by 3.5 years on the account of air pollution. Yellow states that, in ten months operating in Brazil, its users burned half a million calories. 

Regarding the environment, considering data from all over Brazil, the survey points out that 8.32 million of Brazilian bicycle riders stay away from 17 million tons/year of CO² annually, and also around 1 million ton/year of nitric oxide and 350 thousand ton/year of carbon monoxide. 

And financially it’s not bad either: in a family where two people swapped motor vehicles for bicycles, the annual income had a bump of BRL 12,800.00. According to the Brazilian Association of Financial Planners, the difference is even greater: the annual cost of a car is estimated in BRL 20.5 thousand versus an annual cost of BRL 1 thousand with mobile bicycle apps and BRL 2.8 thousand with bicycles combined with public transport.

“The total of our trips in areas near subway, train or bus stations is usually ten times higher than in other areas of the city,” informed the Grow consultancy, who keeps Yellow and Grin services. “The purpose is to revolutionize transport by making available transport alternatives, especially for the so-called ‘first and last mile’ of urban trips,” he completed. 

Bicycle-sharing services may help to provide a smarter urban mobility and also a smarter data sharing of its users. Information available by transport apps may help to develop more efficient public policies. “Sometimes, it’s hard to justify bike paths when it involves removing parking spots. Data showing routes used by bike riders support these policies,” Guillermo Petzhold wrote in an article.

Some Brazilian cities already have regulations that require apps to provide data on routes and mobility behavior of its residents. This is a worldwide trend with a purpose in mind: turn technology into smart urban transport policies.

Content published in July 1, 2019