Transportation apps: How SP and NY deal with impacts – Jason Jackson

Jason Jackson, Ford Career Development Assistant Professor in Political Economy and Urban Planning, MIT


Professor Jason Jackson spoke at the MIT Sloan Latin American conference, “The Future of Work,” held on August 29, 2019 in São Paulo, Brazil.

Transportation apps like Uber and Lyft are rapidly transforming the market into cities around the world. But there are still debates about the social costs and benefits of the digital mobility revolution.

On the plus side, these apps – including Grab in Singapore; Hello in India, Bolt (formerly Taxify), based in Estonia; and 99 in Brazil – made it convenient to move around cities, at least for those who can afford it. They also opened new income generating opportunities for potential drivers.

But these apps also raise numerous questions. For workers, there is no guarantee that they will receive a decent wage. This is important since in major cities such as São Paulo and New York, most drivers work full time. These professionals must also provide their own vehicle and are responsible for all costs. In addition, while it was thought that these apps could improve public transportation, especially the “last mile problem” in cities like New York, people using public transportation migrated to them, resulting in increased congestion and carbon emissions.

Confronting the challenges of gig economy work is difficult. However, over the past two years, several cities, including São Paulo and New York, have developed progressive policies to address some of these social and environmental imbalances. The goal: to ensure that the benefits and costs of transportation are distributed fairly. The first results are promising.

In 2016, São Paulo adopted an innovative approach to regulating urban mobility applications, instituting policies to shape their impacts. To counter the environmental effects of having more cars on the street, the city has imposed a progressive tax. Today, companies pay $ 0.10 per kilometer as a basis for using public roads – this rate increases if a company is responsible for more than 36,000 kilometers traveled at any time of the day.

In addition, the city has created incentives to encourage companies to achieve certain social goals, including discounts for female drivers (to promote gender equity in the workforce), off-peak travel (to control traffic), travel starting off-center (to provide access to underserved communities) and using electric or hybrid cars (to lessen dependence on fossil fuels).

São Paulo’s regulation includes other requirements to increase customer safety and convenience. For example, all cars must be under the age of eight, drivers must undergo a 16-hour training course, and applications must include mechanisms for passengers to provide driver feedback and make electronic payments.

New York has also enacted regulations on social equality. In a measure aimed at guaranteeing workers the right to a decent wage, the city’s Taxi and Limousine Commission set a wage floor of $ 17.22 per hour after drivers’ expenses, or $ 26.51 per hour, prepaid expenses. According to an independent review by the commission, the new rule, which came into force in January, will increase average compensation by 22 percent a year to more than 77,000 drivers.

Read the full post at NEXO.

Jason Jackson is Ford Career Development Assistant Professor in Political Economy and Urban Planning at MIT. 

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