By Devin de Vries, CEO, Where Is My Transport
Every week, 5 billion commuters in emerging markets have no choice but to turn to informal transport networks to get around. Vehicles go by different names – minibus taxis in South Africa, matatus in Kenya, peseros in Mexico – but typically take the form of 16-passenger vans running along semi-flexible routes.
These privately owned systems don’t always maximise efficiency. Drivers have strong incentives to fill vehicles to capacity, which means there are very few of the empty buses often seen in the developed world. However, this means vehicles leave when they’re full, not according to a timetable. No coordination between drivers, plus no real-time data, means there’s much room for efficiency gains.
Despite these limitations, minibuses do affordably move up to 80% of the population for many emerging-market megacities. Mexico City’s 199 formal public transport lines pale compared to its almost 1400 informal routes.
Bottom-up planning means extreme flexibility in the age of coronavirus
Informal public transport networks are testament to ordinary people’s ingenuity in finding pragmatic solutions where governments lack capacity. In the coronavirus pandemic, these networks are responding to every demand placed on them, often with admirable solidarity.
Without any central planning, operators have kept nearly all local routes open, albeit with fewer vehicles. Some minibus operators have even repurposed their vehicles to deliver essential goods and workers. Contrast with many formal transport agencies, which have often been forced to close routes, cutting off entire neighborhoods from even essential travel.
In Mexico City, minibus drivers are coping with reduced demand by splitting up work. Drivers pick up fewer shifts – in essence, taking a pay cut rather than lay anyone off.
Drivers typically don’t own vehicles themselves. Rather, drivers lease vehicles, paying owners an agreed-upon daily rate, then keep the profits from the day’s fares.
With fares way down, many vehicles owners have renegotiated these lease rates to make it affordable for drivers to keep essential services operating. Indeed: “We’re all in it together!”
Informal Transport Keeps Us Moving
As public services shut down, the pandemic is proving informal public transport’s value as a flexible system for any occasion. Across South Africa, for example, the government has shut down or cut back subsidised public transport, including halting service on the nation’s local rail networks.
Governments only have these options because informal public transport networks are so flexible and resilient. Developed-world cities can shut down metro stations and cut back bus service in part because they can count on private vehicles, taxis, or ride hailing services, to fill the gap for essential workers.
For emerging market megacities, informal transport plays a similar role. With comprehensive networks and no route cuts, informal transport keeps essential services running.
Formalizing Inclusive Design
Even in good times, informal public transport’s essential role has led to a long-latent conversation on the future of these systems. As government capacity expands, should formal systems gradually replace minibuses, or is it better to subsidise and upgrade an essential and adaptive service?
Coronavirus has brought that conversation to the fore. At WhereIsMyTransport, the company I lead, we have built out the first comprehensive maps for informal transport networks in 36 cities around the world.
From that work, we have come to firmly believe that while there’s room for improvement, any effort to replace informal transport networks will do more harm than good.
This is not only due to the huge numbers of people they move. A glance at the map of Mexico City’s transport networks shows the wide reach of informal routes, giving low-cost rides to the cities’ farthest-flung neighborhoods. This network should be the nervous system of an inclusive city, where transport and opportunity reach every resident – to be inclusive of informal transport would be to enable more equitable mobility for all.
For many megacities, some form of subsidy seems to be an inevitable part of the solution. Mexico City has responded quickly. The government will offer fuel subsidies starting in May, and is working with private creditors to postpone payments on loans used for fleet improvements. In the Philippines, the government is handing out cash payments to some drivers.
Informal transport is essential to enabling the return of economic activity. Even one-off payments during this crisis can help keep drivers and vehicle owners afloat — avoiding a rash of bankruptcies that would endanger informal transport’s ability to ramp up as economies reopen. Despite some minibus owners’ willingness to renegotiate rates with drivers, many businesses are teetering on the edge of viability.
What Comes Next
During this pandemic, cities are responding quickly as cars vanish from the streets. New York, Paris, and Milan are among the cities seizing the opportunity to re-imagine those spaces, planning to add hundreds of kilometers of bike lanes this summer.
I propose a similarly transformative vision for emerging megacities, but with a tweak. Informal transport’s great advantage is that routes, times, and frequencies are effectively crowd-sourced. Drivers make decisions based on commuter’s needs, often in close to real time.
For complex, sprawling megacities, this approach should be preserved. It works much better than a bureaucrat drawing lines on a map ever could.
What government can do is prioritise informal public transport to make it work better. Most important is adding fast lanes for all public transport, which would be transformative for the billions of people.
Despite fewer vehicles per route, minibus passengers in Mexico City are reporting shorter travel times. Without the city’s usual gridlock, minibuses connect neighborhoods even better than before. Faster rides give some idea of benefits for bus-only lanes, especially in cities with extreme congestion and pollution.
Formalised transit hubs could connect minibus networks with city buses and trains. In many cases that will mean expanding existing informal taxi ranks, with benefits of reduced crowding, improved facilities for vendors, and better transport.
In South Africa, the government is looking more closely at crowding on minibuses. Vehicles may run at up to 70% capacity; both passengers and drivers must wear masks. In Mexico City, the government is requiring vehicles to be fit with trackers and cameras to improve safety, in return for permission to operate. These sorts of sensible safety oversight measures are welcome – and not just in a crisis.
The coronavirus has shown us how critical informal public transport networks are to keeping our smallest and largest emerging market cities running. They are the unsung heroes of our emerging market cities.
Cities should seize the opportunity to learn from informal transport networks and incorporate them into the urban fabric, embracing their strengths of resilience, flexibility, and adaptability. Other informal sectors, such as street vending, are central to so many economies, and will also flourish from this collaboration.
More is possible, with what we have today. Let’s seize the moment.
ARE MIDDLE EAST ENTERPRISES PREPARED FOR THE FUTURE?
Deloitte releases 2020 tech trends report
Deloitte’s 11th annual report on technology trends captures the intersection of digital technologies, human experiences, and increasingly sophisticated analytics and artificial intelligence technologies in the modern enterprise. The report explores digital twins, the new role technology architects play in business outcomes, and affective computing-driven “human experience platforms” that are redefining the way humans and machines interact.
During the current COVID-19 crisis, organizations have been turning more and more to technology to enhance business resilience and continue to operate. As organizations are forced to utilize remote working where possible or take pause, many are also realizing the benefits of this way of working as an option post COVID-19, to improve efficiencies and become more agile. While currently dominated by communication technologies, building resilience will also require us to closely examine, and build on, trends such as ethical technology and trust, human experience platforms and architecture, and the macro forces of digital experience, cloud and risk.
“The most successful businesses today are combining cutting-edge technologies like machine learning and IoT with disruptive IT architecture and supercharged talent to create entirely new ways of working – and they already see the benefits,” said Bhavesh Morar, Lead Partner for Enterprise Technology and Performance, Deloitte Middle East. “And with enterprises needing to adapt and respond quickly to ongoing technology disruption, Deloitte expects to see more IT and finance leaders working together to develop new flexible approaches for funding innovation.”
The Deloitte report’s five trends of focus for 2020 include:
- Digital Twins – Bridging the physical and digital:Digital twin technology allows businesses to create increasingly sophisticated virtual models to optimize processes, products, and services, enterprises will integrate IoT, machine learning, advanced computing infrastructure, and more to unlock entirely new business models.
- Architecture Awakens:Systems architecture will become a strategic priority as enterprises redefine the architect role to be more nimble, responsive, and collaborative. Architects will work across the business and work creatively with non-technical project teams – forming a competitive differentiator in the digital economy.
- Ethical Technology and Trust:Enterprises in every geography are realizing that their embrace of technology is an opportunity to gain – or lose – trust, and with it, customers’ business and brand loyalty. CIOs will emphasize ethical tech in the coming years – and create processes to help solve ethical dilemmas related to disruptive technologies.
- Human Experience Platforms:To address the lack of connection humans often experience with daily digital interactions, a growing number of enterprises are injecting emotional intelligence into their systems. These include AI capabilities such as machine learning and voice and facial recognition, which can better detect and appropriately respond to human emotions. The net result is emotionally intelligent human experiences that leverage connections between people, systems, data, and products.
- Finance and the Future of IT: As enterprises become more agile, financial operations will need to support new modes of working. That means CIOs and CFOs will need to explore how a new, flexible approach to enterprise finance¾across budgeting, contracting, capital planning, and more¾can redefine the future of tech innovation.
“Enterprises in the Middle East are no longer satisfied with being regional leaders – now the ambition is to go global and lead globally. There is a growing interest in looking beyond what’s new to what’s next. At present, many enterprises are looking to strengthen their structures, capabilities, and processes required to harness technology macro forces and innovate effectively in the face of exponential change,” concluded Morar.
TECHCOMBANK AND COMPASS PLUS CELEBRATE 15 YEAR MILESTONE IN BANKING PARTNERSHIP
Since issuing the first Visa card 15 years ago using solutions provided by trusted partner Compass Plus, Techcombank, one of the top commercial joint stock banks in Vietnam, has become the country’s market leader for Visa payments volume and has received numerous prestigious awards from the international payment network.
Techcombank was Compass Plus’ first customer in Vietnam, and following the initial project in 2005 to issue Visa cards in the country, the partnership has continued to go from strength to strength. The bank has used Compass Plus solutions to expand its card business and banking portfolio, and has also built an in-house processing centre using its partners software.
Originally brought in to help grow its business and develop its offering for individuals and small to medium businesses, Techcombank selected Compass Plus as the partner that had the expertise to support both its technical and business requirements.
“We are proud to mark this milestone in our partnership with Compass Plus,” said PhD Hoan Dang Cong, EVP, Deputy Head of Retail Banking at Techcombank. “Over the last 15 years, we have appreciated the efforts from the strong and well-established relationship we have with our trusted partner, as well as stable card business performance and flexibility to enable business growth.”
“Techcombank is one of the most technologically advanced banks in the country, and we are proud to be able to say that not only are they our customer, but that we have such a positive and long-standing relationship with them,” said Igor Simonov, AVP, Business Development and Sales Manager at Compass Plus. “As the Vietnamese banking sector responds to demands for more advanced payment methods than ever in a move away from cash, we will be ready to deliver and to provide the ongoing support needed to spur further growth for banks, such as Techcombank.”
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