The top five mobility developments in Latin America

It was not until the 20th century that urbanization across the world began to grow at a rapid pace. Countries face new challenges with respect to the population density, citizens’ living standards and the city’s mobility. Challenges for which Intertraffic finds solutions. This November Intertraffic will take place in Mexico City offering a large network of professionals in the traffic industry sharing knowledge. This article covers the five current key mobility developments in Latin America.

1.Growth vs. Surface

Today, Latin America is one of the most urbanized regions in the world. The sub-continent is home to more than 649 million people and some 82,8% of the population is urban. Its cities may be diverse, but they bump into the same problem: the speed and scale of the urbanization. It is predicted that Latin America’s cities will include close to 90% of the region’s population by 2050. This rapid growth also challenges the traffic infrastructure around cities, as more and more people are moving in and around the metropolitan area, which asks for improvements in traffic infrastructure, parking and road safety. More than 30% of the traffic in large cities consists of vehicles looking for a parking spot. According to Tom Tom’s Congestion Index, Mexico City is now the most congested city on Earth, with journeys taking on average 66% longer than in free-flow conditions and traffic gridlock adding 227 frustrating hours of travel time to the annual life of a typical commuter.

This offers a unique opportunity for cities to invent and adopt innovative solutions to accelerate urban mobility. Mexico City already introduced the environmental “Hoy no Circula” programme, which indicates at which day citizens should leave their car at home by placing a sticker license plates. 

2.Shared mobility

Shared mobility is a good alternative when travelling a shorter distance. This trend is gaining more and more popularity in the sub-continent. Traditionally, Latin Americans place significant value on private car-ownership and are often tied to more regular modes of public transportation such as trains, subways and buses. However, the roads of large cities including São Paulo, Mexico City, and Bogota, have reached their limit. The search for parking spaces slows down traffic and the abundance of cars on the road are causing traffic accidents and constant congestions.

Because of these congestions new ways to go from A to B are explored. One of “the fastest growing new mobility business models” is eHailing. It enables the user of a smartphone app to be picked up by a car or taxi and dropped off once the destination has been reached. The user can select the driver through the app based on several criteria, including drivers’ reviews, proximity and type of car. In addition, eHailing is often cheaper than a regular cab and generates a sense of security and comfort due to the driver and price transparency.

The eHailing segment has generated $518 USD in Latin America in 2018 and is expected to grow to $1,017 million USD by 2023. A Dalia survey revealed that Latin Americans that are in possession of a smartphone and live in an urban area are most likely to have used a ride-hailing app or site. Overall, 45% of the Latin Americans with a smartphone living in urban areas have used a ride-hailing app or site, with Mexico taking the top position at 58%.

However, not everyone is happy with the emergence of these eHailing services. Mexico City was blocked by protesting taxis as the regular taxis demand stricter regulation of the ride-hailing apps. The National Movement of Taxi Drivers (MNT) argued that drivers who work for app-based services do not have to meet the requirements and pay a range of fees that regular taxi drivers have to. As a result of this protest, the federal government promised to examine the legality of the ride-hailing services together with a group of legal experts.

3.Micro-mobility

Aside from car sharing, micro-mobility is gaining more and more popularity across Latin America. People can rent scooters or bicycles for short distances via easy-to-use, self-serve apps on smartphones.

The micro-mobility company Grow recorded its tenth million ride in Latin America in June 2019. The company is the result of the merge of two mobility firms Yellow (Brazil) and Grin (Mexico) earlier this year. It has operations in six Latin American countries disseminated in 23 cities with a combined fleet of approximately 135,000 lightweight vehicles.

Micro-mobility will improve the connectivity of people using public transit, being less reliant on private cars, and it reduces emissions. Next to that, it has the potential to optimize the existing space by “rightsizing” the vehicle relative to the distance to be covered.

4.Bus Rapid Transit (BRT)

Due to urbanization and the fact that a lot of Latin Americans rely on public transportation, timely solutions are needed. In terms of innovative solutions, Latin American public authorities have created some remarkable advances in terms of integrated public transport. An example of this is the BRT scheme. BRT stands for Bus Rapid Transit and can be found in Brazil, Colombia, Chile and Mexico. It integrates the benefits of traditional buses and rail lines into a successful public transportation system to increase the overall mobility of an area. This implies separate bus lines, stops that pass by stations, intersection signal priority, off-board payment combined with a rapid pace. In Mexico City it even connects the cable car Mexicable. This new mode of urban transport is used by 20,000 people a day going to school or to work in a safe way.

5.Switch to electric

Electric vehicle sales in Latin America increased by 90% in 2018 as a result of growing demand in Mexico, Columbia and Costa Rica. Various Latin American countries are creating incentives to activate the Electric Vehicles (EVs) market. 

Mexico, Ecuador, Uruguay, Colombia, Brazil, Costa Rica and Argentina lowered the import taxes of electric cars to encourage purchases. Some among them go beyond that by offering exemptions or deductions on VAT that come along with the purchase of an electric vehicle. In the light of clear sales targets, Colombia strives for a significant number of electric vehicles; it aims to have 600,000 EVs on its roads by 2030. Do you want to know what business models can help to make electro mobility more flexible? Jorge A. Suarez of ENGIE will talk about that at this years’ Intertraffic in Mexico City.

In Mexico and Ecuador a considerable number of parking spots are reserved in public parking lots for EVs. In some cases, the vehicles are even allowed to enter traffic restricted zones. Moreover, the cars are permitted to use bus lanes in Colombia and Mexico, which is beneficial considering the high number of BRT’s lanes in the regions.

On top of that, a number of Latin American countries set up plans to stimulate the construction of a charging network. Though national service companies are predominantly in charge of the installation of charging spots, the Brazilian senate approved a bill that demands electric utility companies to install recharging spots in cities.

The electric vehicle market in Latin America is expected to increase continuously as EV prices come down, automakers introduce new models and governments ramp up e-bus procurement.

Latest development: new governmental projects for economic growth in Mexico

The Mexican president, Andres Manual Lopez Obrador, announced that Mexico will soon reveal a set of major infrastructure projects drawn up by the private sector. These projects are meant to help elevate the Mexican economy due to the recession earlier. The president spoke at a news conference on October 2nd and declared that about 1600 projects are considered that have the potential to “reactivate” Mexico.

“This is really important, because it would help us to spur economic growth” – Andres Manual Lopez Obrador, President of Mexico.

The Mexican president started his administration last December and intends to leave the recession behind during his presidency, aiming for an annual growth of four percent. It is forecasted that more than $400 billion USD will be allocated to the programme over the course of the 2018-2024 administration. The president commended the private sector’s attitude and its effort crafting the infrastructure plans. The Central Bank is positive that the Mexican economy will show improved results in the last few months of 2019.