Abel López
Urban Transport Specialist
World Bank Group
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Insight

Curbing Total Travel Costs Through Digitalization

Sat, 09/01/2018 - 12:36

Improving local mobility ecosystems and reducing total travel costs in Mexico’s largest cities can be can be assisted by the use of technologies and the digitalization of mass transport systems. However, the country must overcome several challenges to make the best out of new technologies, says Abel López, Urban Transport Specialist at World Bank Group. “Approximately 60 percent of Mexico City’s population commutes using urban transportation means,” says López. “However, only 1-2 percent of all trips in Mexico are digitalized, which offers a key opportunity for improvement.”
Knowing when the next bus, taxi or subway train arrives enables people to more effectively plan their commutes. Although the entrance of new technologies such as Uber or Cabify has offered commuters more certainty on waiting times, public institutions still need to understand the importance of information to improve mobility ecosystems. “The total travel cost for commuters drops as Mexico advances toward having real-time information on waiting times,” says López. “Cities must learn to produce, process and share data related to urban transportation, which combined with the regularity of mass transportation will translate to a better impact from any mobility plan implemented by the city.”
There are already digital platforms specialized in offering mobility services, as well as software solutions that tell drivers what roads to take to avoid traffic. However, López says more platforms should be created to benefit urban populations. At the same time, the country should promote better access to digital devices where users can access these platforms. “Although Mexico has a high access rate to smartphones compared to other countries in Latin America, this indicator is still far from 100 percent,” he says. “Around 80 percent of the people that use public transportation means in Mexico are part of lower-income population segments with limited access to these devices.” López says the role of World Bank Group is to push for better-structured projects where the technological risk is covered. “We need better project planning to implement programs where new technologies can sustain themselves over time,” he says. “It is important that vehicles are substituted for those with newer technologies.”
As a development bank, World Bank Group has focused on collaborating with the Mexican government to improve urban transportation in the country. The bank developed the MX-Urban Transport Transformation Program to boost the use of mass transportation means in cities with over 500,000 inhabitants, designing it as a complement to the Federal Government’s Mass Transport Support Program (PROTRAM).
Eight years after its implementation, World Bank and Mexico’s public sector have collaborated in urban transportation projects in Monterrey, Guadalajara and Tijuana. “We have learned about the needs of Mexican cities, the challenges that public transportation operators and state and Federal Governments face and the role of OEMs, commercial banks and technology suppliers in urban transportation projects.”
In its efforts to promote development that contributes to ending extreme poverty and boosting shared prosperity, the World Bank Group plays a key role in promoting transparency and efficiency in the use of public funds. All projects financed by the bank must comply with procurement norms that promote competition. “In the area of civil works, companies might feel more comfortable participating in tenders where the World Bank’s resources are involved because they know those resources are secured and that the tendering process will be transparent,” says López. In rolling stock projects, on the other hand, World Bank reviews that projects are structured through solid grounds thus maximizing value for money. “By motivating international tenders and working closely with government officials, the bank boosts the competitiveness of urban transportation,” he says.
López says the two challenges that need to be addressed in urban transportation projects are planning and financing. “Cities’ mass transportation projects are not solid enough to attract private investors willing to take some risks in exchange for returns or maximize value for money, It is important but expensive to prepare mass transportation projects and necessary to have resources in place to finance them.”