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The big-bus trap : what formal bus operators could learn from the informal sector
| Content Provider | Semantic Scholar |
|---|---|
| Author | Ferriera, E. Golub, Aaron |
| Copyright Year | 2004 |
| Abstract | Full-size buses operated by large, formal bus companies are the norm in Brazil. Over the last 8 years, informal owner-operators organized into cooperatives, generally employing smaller vehicles, have entered the urban bus markets in cities across Brazil, successfully competing with the formal bus firms. Though per-seat costs are higher for the smaller vehicles, significant cost savings result from the organizational form of the cooperatives. This article will explore some of these savings using data from formal bus firms and informal cooperatives in the city of Goiania, Brazil. The cooperative form of organization can be seen to offer some lessons for formal sector operators. RESUME : Les bus de taille normale exploites par les grosses societes formelles d'autobus sont la norme au Bresil. Au cours des 8 dernieres annees, des operateurs-proprietaires informels, organises en cooperatives, utilisant generalement des vehicules plus petits, ont penetre les marches d'autobus urbains dans des villes a travers le Bresil, rivalisant avec succes avec les societes formelles d'autobus. Quoique les couts par place soient plus eleves pour les vehicules plus petits, des economies significatives de cout proviennent de la maniere dont les cooperatives sont organisees. L'article explorera certaines de ces economies utilisant des donnees de societes formelles d'autobus et des cooperatives informelles dans la ville de Goiania (Bresil). On note que l'organisation sous forme cooperative offre quelques lecons aux operateurs du secteur formel. originated model of expanding rubber-tire and road based technologies combined with suburban rail systems became more attractive to the Brazilian leaders. At this time, most bus services were provided by small artisan-style operators. Rising incomes from the Brazilian “economic miracle” and added road capacities together created a growing demand for urban mobility, and concomitantly, for millions of private automobiles. A fall in demand for public transit, combined with the oil-price shocks in the early and late 1970s led to a period of crisis for the fragile bus industry. In response to this crisis, in hopes of preventing future ones, and in keeping with the magnitude to which every other industrial sector was being developed, national policy began promoting an increase in the size and strength of the bus companies. Mergers and conglomerations of smaller transit companies were encouraged. In the late 70s, new national and state-level regulatory bodies were created to oversee this new and more centralized model of urban transportation administration. Minimum fleet requirements for bus firms were adopted and peaked in 1983 at over 100 vehicles per firm, but were ended in 1994. New methods of fare calculations, route assignments, and terms of entry into the market were created and standardized. This history has resulted in heavy concentration in the bus industry in Brazil and the form of system management in existence today. In Rio de Janeiro, several firms operate more than 400 buses, and holding companies often control groups of large firms. The largest group controls 1350 buses, which, at roughly 70 thousands dollars per bus, equals close to 100 million dollars worth of buses. Today, formally provided bus transportation in Brazil is highly regulated. Nearly all services are delivered by private firms operating under service concessions from public agencies. Regulations exist governing fares, routes, schedules, labor rules, curbside operations, market entry standards, maintenance and equipment specifications. For service within one municipality regulations are made and enforced by the municipal governments, and for inter-municipal transport, state governments. Most large metropolitan regions in Brazil are conurbations of multiple municipalities meaning that various regulatory agencies are responsible for regulating public transit of one geographic region. Operating concessions for services are typically granted by route, or packages of routes, to the private firms for a period of 10 to 20 years. Most firms employ various modern labor and fleet management, data analysis, and accounting practices. Fares are determined in most cities by calculating costs and rewarding some rate of return on capital invested. This “cost-plus” method is obviously interrelated to the regulatory goals of expansion and concentration of bus firms, because it induces investment and overcapitalization. This will be an important issue in differentiating with the informal sector. b. The growth of informality The current wave of informal paratransit activity in Brazil began around 1994 and has experienced a steady rate of growth. While various cities in the past experienced growth of informal sectors, the current wave is more national in character. It is having profound effects on the ridership levels of the formal transport systems in many cities simultaneously around the country. By the beginning of 2000, about 70% of cities with populations exceeding 300,000 were experiencing some informal transportation activities. In about 60% of the cities, the informal systems were experiencing growth at that time [NTU, 2001]. Table 1 shows the market shares for larger Brazilian cities surveyed in 2000. Some particular routes or corridors might be even more heavily impacted, and numerous were witness to the complete failure and bankruptcy of the formal operators. Table 1. Public transit market share of informal operators in cities with populations exceeding 300,000 in 2000 [NTU, 2001]. _ Market Share of Public Transit Trips Share of cities |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.codatu.org/wp-content/uploads/The-big-bus-what-formal-bus-operators-could-learn-from-the-informal-sector-E.-FERRIERA-A.-GOLUB.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
