Latin America is a mass-transit powerhouse. But it needs fine-tuning

Demographic Economics - Migration
Infraestructure - Transport - Water

Image: REUTERS/Nacho Doce

Mass transit culture … a bus garage in Sao Paulo.

This article was previously published in the World Economic Forum Blog, on June 27, 2019.

Latin America and the Caribbean are experiencing rapid rates of urbanization, population growth and income growth, with matching increased demand for mobility services. Within the last 50 years, Latin America's urbanization rate has doubled to 80%, making it the most urbanized region in the world. By 2050, 90% of Latinos are expected to live in big cities. As Latin American cities grow, they face the challenge of transforming their existing mobility system in such a way that capitalizes on the emerging technology, incentivizes innovation and ultimately reduces traffic congestion while ensuring greater road safety and cutting down on pollution.

Latin America has an existing mass transit culture founded on widespread ridership on public and privatized bus, metro, taxi and ad-hoc minibus systems. Since Bus Rapid Transit was first adopted in the 1970s in Curitiba, Brazil, there has been a widespread growth of BRT systems in 54 LAC cities. Equally, Latin American cities with enough density and established infrastructure have begun to invest in metro systems, with 19 currently in existence. Privately owned minibus systems and taxi cooperatives provide widespread service in low- to middle-income neighbourhoods on the city peripheries. The existing public transit and shared system comprises 68% of all passenger travel, one of the highest in the world.

While there is an abundance of mobility options with peak saturation, there is also a growing automobile market. There are over 106 million cars in the three largest automobile markets in Latin America: Brazil, Mexico and Argentina. The current rising trend in vehicle ownership is due to the growing economy, coupled with low taxes on fuel, investment in vehicle infrastructure, and robust second-hand vehicle markets. While these key factors contribute to the growth in vehicle ownership, they come with their downsides, including increased road deaths, pollution and congestion. Beyond that, cars take up a lot of space, both when they are in movement and when they are parked.

As Latin America continues to develop, it faces the question of what type of urban mobility system will best suit the needs of the growing population and what are the steps the region needs to take to get there.

What should the backbone of an urban mobility system in Latin America and the Caribbean be?

Latin America and the Caribbean already has a robust network of public and private mass transit operators; it’s not about reinventing a system that already works, but rather figuring out how to fine-tune the system to increase efficiency and guarantee greater safety. The foundational factor in growing, adapting and transforming the current mobility system into the best version of itself is through digitization.

Digitization provides the foundational knowledge to catapult Latin American urban mobility into being a world leader. By digitizing all aspects of roadway infrastructure, key decision-makers in LAC cities and countries can capture previously unknown transportation data that can help them better understand supply and demand and map out their existing roads and curbs. By understanding the flows of supply and demand, transportation providers can eliminate duplicative routes, gauge the area of future transportation development and investment, and better understand the needs and demands of existing and new transit riders. Ultimately, digitization allows the existing system to be more agile and adaptable as cities transform with the new influx of emerging technologies both within mobility and outside of it.

Benefits of digitization

By laying the groundwork of modernizing the existing urban mobility system in Latin America through digitization, the region can unlock related technologies that can further increase the efficiency of transit. These include providing ubiquitous mobile payment in public transit systems that can create an advanced payment process, reducing the risk of assaults on drivers and passengers, and potentially connecting multiple different service providers through one payment system, as some transit systems have adopted. With the collection of ticketing and passenger data, transit providers can continue to capture dynamic changes in the system and adjust accordingly.

With digitization, service providers can provide on-demand transit and augment service in high-demand areas or in existing systems where peak saturation is downgrading the rider experience. An on-demand system can help both public and private transit providers reduce areas of inefficiency; suggest alternative, more cost-effective transit options in areas with low ridership; and ultimately reallocate existing funding in the urban mobility system to key areas that need improvement.

How to lay the groundwork:

Digitize everything!

• Digitize everything including roads, curbs, existing transportation systems and rail usage.

• Provide infrastructure for mobility phone penetration to increase phone usage and open the door to opportunities like mobility phone payment.

• Make report a requirement for every transit provider whether private or public.

• Share data through open APIs to accelerate learnings and incentivize innovation.

• Improve connectivity and dedicate bandwidth to transit management.

Experiment widely and frequently!

• Test on-demand services in existing transit systems to understand where to improve and apply learnings.

• Incentivize the existing private minibus operators and taxi companies to be more efficient by using cleaner vehicles, accepting digital payments and reporting general data on ridership.

• Begin introduction of automated technologies through phasing in highly geofenced areas such as around port and shipping hubs, campus environments, or in mining and agriculture.

• Combine with a widespread education campaign to inform people and set expectations.

• Share learnings widely and easily.

Act now!

• Require all procurement of government-controlled fleets and public vehicles be equipped with advanced driver assistance systems (ADAS).

• Enforce existing road rules, especially speeding, seatbelt usage and intoxicated driving.

• Restrict the importation of second-hand vehicles that do not have advanced safety features such as lane keep, airbags, anti-lock brakes.

• Make the costs of private vehicule ownership reflect the true cost on society by including externalities of pollution and congestion.

• Adopt congestion pricing, fuel taxes, registration taxes.

• Incentivize other alternative transit such as micro-transit and active transit, through routine street closures for pedestrian and cyclist-centered events like Cyclovia.

• Continue allocating space for dedicated lanes for Bus Rapid Transit, carpooling, and electric vehicles.

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