Transport apps on the rise in Rio

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Behind the deadlocked scuffle between taxi drivers and private drivers using apps, is the dispute for a million-dollar market. An estimate made by the coordinator of the Center for Business Studies at Insper, Paulo Furquim de Azevedo, shows that, in just the two largest cities in the country – São Paulo and Rio de Janeiro -, drivers with apps, whose rides are much more affordable than those of taxis, already turn over between R$1.5 to R$3 million (US$480 – 961 million) per day. Considering taxis and apps, this amount reaches close to R$10 million (US$3.2 million) a day.

“The markets of Rio and São Paulo are very similar. Although the population of Rio is smaller, the use of taxis and private cars, via applications, is more intense due to the high price of parking lots and the lack of empty spots. We made our estimates based on the average daily movement of taxis,” explains Furquim.

In the professor’s estimations, app drivers in São Paulo and Rio number 50K in each city, already surpassing the number of taxi drivers, which is 38K and 32K, respectively. He used as a basis the growth rate of the number of drivers of these companies in recent years. Furquim recalls, however, that many drivers are on several platforms at the same time, which may distort the data a bit:

– The growth of unemployment has led many people to these applications.

In addition to the loss of passengers, the apps caused another type of problem for taxi drivers. The entry of these platforms into the market has lowered the value of city-issued licenses (medallions) for taxi drivers, which have always been negotiated in the secondary market for very high amounts.

“The licenses lost about 50% of their value with the entry of apps. Our estimate indicates that the stock for these authorizations had a value of R$23 billion (US$7.3 billion) in São Paulo, two years ago. In Rio, this stock was worth R$29 billion (US$9.29 billion), says Furquim.

According to the Insper professor, there is still no survey that indicates the potential of private transportation throughout Brazil. He notes that the more cities grow, the greater the demand for this type of service is because of traffic jams and a lack of parking spaces. In smaller cities, where there is no traffic, the passenger who doesn’t use public transport opts for their own car or a taxi.

Projects recently announced by the app companies for the country show that the market can still grow a lot. Just at the beginning of the year, investments announced by two of these companies in Brazil – Cabify and 99 – reached US$300 million.

Uber, which already operates in 40 Brazilian cities, had a 13-fold increase in the number of passengers in just two years. The platform has been operating in the country since 2014. According to the company, there are 13 million active users, people who have used the application at least once in the last three months. The number of drivers has already surpassed the 50-thousand mark in the country. – Source (PT)


Interesting to note that in both markets (Rio and SP), Uber users are becoming entrepreneurs by renting out a fleet of cars to new drivers who don’t have cars of their own. 

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