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São Paulo Offers the Best Plan Yet for Dealing With Uber

Call it congestion pricing for taxi cabs.

A traffic jam in São Paulo on June 6, 2014, during a subway strike. (AP Photo/Nelson Antoine)

Much like Keyser Soze, the greatest trick Uber ever played was convincing some of the world’s biggest cities that, when it comes to traffic, it doesn’t exist. But don’t count São Paulo, Brazil, among the fooled. The congestion-riddled metro recently proposed a bold, seemingly unprecedented plan for managing Uber, Lyft, and other e-hail cab outfits that threaten both to jam up local streets and to dissuade public officials from doing anything about it.

The beauty of the scheme is its simplicity: São Paulo wants to charge these companies a mileage fee.

English details of the draft plan, whose public-comment period ended this week, come via the World Bank’s Transport for Development blog. Registered transportation network companies (let’s just call them taxis already) would bid at auction for credits that permit them to drive a certain number of miles over two months. Cars that exceed their allotment would pay a surcharge. The credits would presumably cover metered trips as well as cruising around for fares.

Such a system offers São Paulo an enormous amount of flexibility. The city could raise the fee during rush-hour, for instance, or provide discounts for cars that carry low-income travelers or disabled residents. The credit system could reward drivers who operate during off-peak hours or who venture into underserved areas. And it could entice vehicles to act as feeders for existing public transit hubs instead of competing with established bus and rail routes.

Additionally, the São Paulo plan calls for e-hail companies to provide the city with real-time trip data on “trip origins and destinations, times, distances and route of travel, price and service evaluation,” according to the World Bank blog, so transport officials can organize the road network in the public’s best interest. The proposal mentions standards for safety, comfort, and vehicle quality. It even sets aside 15 percent of the mileage credits for women drivers.

“If it succeeds,” write Georges Darido, Bianca Bianchi Alves, and Felipe Targa of World Bank, the plan “may become a model for other large cities.”

Columbia University planning scholar David King says the São Paulo concept is a smarter way for cities to deal with e-hail companies than a vehicle cap, for instance, or really any other policies offered to date. “If you’re going to be a taxi, we want to make sure that taxi is used as efficiently as possible, so there should be a charge,” he says. “And because it’s an auction, it should balance supply and demand in a way that’s much more beneficial to the city overall.”

While he doesn’t know just what sort of bid a mileage credit would fetch, King says the price would stabilize after a few auctions. Ideally, he says, all for-hire vehicles would have to buy in, and the revenue would go toward road maintenance and providing mobility to low-income residents. An even better outcome would use a share of the fees to expand and improve the public transportation system.

A low-tech way of implementing such a system would involve simple odometer readings. Of course leveraging more advanced technology would result in more rewards. With a GPS-backed mileage system, for instance, a city could coordinate the road network with extreme precision—steering taxis away from residential side streets, for instance, and toward traditional arterials. The more information sent back to the city, the better for city residents.

“It’s still the city that’s responsible for managing the streets,” says King. “Without data on how streets are being used, it’s impossible to know.”

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