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January 2016

Sao Paulo’s Innovative Proposal to Regulate Shared Mobility by Pricing Vehicle Use

Georges Darido's picture
Taxi drivers in Sao Paulo recently protesting the regularization of TNCs such as Uber.
Photo by: Diego Torres Silvestre / Flickr

How to regulate and manage the emerging services of shared and on-demand mobility? This was a topic of much debate during the most recent Transforming Transportation event, a major global conference of transport professionals organized by the World Bank and the World Resources Institute in Washington DC in January 2016. 

One recent development from Sao Paulo stands out as a worthwhile effort to balance the objectives of promoting innovation by Transportation Network Companies (TNCs, such as Uber, Lyft, EasyTaxi, 99Taxi, and others) and ridesharing services (such as BlablaCar, Caronetas, Tripda and others) with the interests of the city and its residents. 

The Municipal Government of Sao Paulo has published for public comments until January 27, 2016  a draft decree to charge TNCs an upfront fee based on an estimate of vehicle-kilometers, also referred to as “credits”, to be used by its fleet of passenger cars in a two month period, plus a surcharge if credits are exceeded.   The idea is that any registered TNC could bid in an online public auction to purchase credits periodically and with certain limitations to ensure competition.  This approach would create a market for these credits and be aligned with the principle commonly known in the vehicle insurance industry as “pay-as-you-drive”, and would allow the city to receive a fee from TNCs for the commercial use of its public road infrastructure, which can then be used to better manage and maintain it.   The decree would exempt free ridesharing services which the city believes would help reduce the total number of vehicle-kilometers on its congested road network.

Transforming Transportation: From Global Targets to Local Action

Pierre Guislain's picture
Photo by Mariana Gil/ WRI Brasil Sustainable Cities

Last year saw major international commitments on critical topics like climate change, sustainable development and road safety. From the adoption of the Sustainable Development Goals (SDGs) to the Brasilia Declaration on Road Safety and the climate agreement reached at COP21,  these commitments—including the World Bank’s own pledge to increase its climate-related financing by one-third by 2020—provide clear international targets for the next 15 years.

Translating these global targets into effective action and tangible benefits for people across the world will be a huge challenge, however. It will require the alignment of various processes and initiatives at the global, regional, national and local levels, as well as significant support to the national and local authorities responsible for implementation.

Transport as a Solution

Transport is at the heart of these commitments – not only because transport is part of the climate and development challenge, but also because it is a big part of the solution.