How emerging markets are boosting urban mobility

Around the globe the urban transportation sector is seeing rapid expansion, driven by economic growth and demographic shifts towards urbanisation. Politicians, urban planners and private sector actors are working together to find solutions to reduce congestion and increase the speed and efficiency of urban transport. As cities grow and urban economies develop, quality of life indicators can increase for residents. While the outbreak of Covid-19 prompted governments worldwide to impose limits on travel and delayed transport developments in the immediate term, its impact on urban mobility over the long term is too early to determine.

Driving Growth

Urban mobility has become a critical quality-of-life issue worldwide. According to the UN, 4.2bn people, or 55.3% of the world’s population, lived in urban areas in 2018. Despite its relatively lower level of urbanisation, around 50%, Asia is home to 54% of the world’s urban population. Moreover, nine of the world’s top-10 mega-cities are located in Asia, with the world’s three largest cities – Tokyo, Delhi and Shanghai – together housing over 92m people in 2018.

Meanwhile, two cities in Latin America, São Paulo and Mexico City, each house more than 20m residents. Mexico City’s population has increased from 13m in 1980 to over 21.6m in 2018. In Africa, Lagos is home to over 13.5m people, while its population nearly doubled between 2000 and 2018, and Cairo has just over 20m residents. In the coming decades these mega-cities, along with other large cities – such as Istanbul, Paris, Moscow, Bangkok and Tehran – will play a critical role in developing new urban mobility solutions. Compact urban areas are also seeing significant growth. Austin in the US saw its population rise from around 675,000 in 2000 to nearly 1.9m in 2018. Smaller urban areas will also need to find new ways to address the evolving transport needs of their growing populations.

Challenges & Potential

Urbanisation creates new opportunities for building mass transit networks. However, without proper planning expanding urban populations can cause major negative side effects, such as traffic congestion and air pollution. In Latin America cars and motorcycles generate more than two-thirds of all CO₂ emissions in urban areas. On a worldwide level, air pollution is expected to cause 6.6m deaths a year by 2050, according to research from the Max Planck Institute for Chemistry. The improvements in air quality and visibility observed in cities around the world during Covid-19 lockdown measures may provide a glimpse of what a low-carbon future with fewer cars on the road might look like.

In Europe, Asia, Africa and the Americas policymakers, city planners and the private sector are collaborating to find solutions to reduce city centre congestion and pollution, while also allowing residents to move quickly and easily throughout their cities. Cities globally are working to build new urban transport networks that combine access for passenger vehicles, metro and bus systems, bicycles, and new means of transportation such as app-based scooters and electric bicycles.

“Cities need to rethink urban transport systems to enable safe and connected networks between traditional transit, pedestrians and cyclists,” Claudia Glen, a transport consultant at the Inter-American Development Bank, told OBG. “Streets are valuable public spaces, and cities need to reimagine how to allocate that space in a more equitable way.”

Road Vehicles

Residents in most urban centres continue to rely heavily on privately owned vehicles. Passenger vehicle ownership has grown exponentially in emerging economies across the globe over the last two decades. Worldwide, the number of cars in use is expected to exceed 2bn by 2040, according to investment research firm Bernstein. Much of the global growth in future car ownership is expected to be driven by new vehicle purchases by residents in cities and towns in emerging markets, including major economies such as India and China and emerging South-east Asian economies such as the Philippines, Indonesia and Vietnam. Growth in urban passenger vehicle use is expected to be driven by the burgeoning middle class in developing countries. By 2025 the 600 largest cities in the developing world are expected to house 235m middle-class households earning an average annual wage in excess of $20,000 a year, according to projections from McKinsey Global Institute.

For example, Indonesia has a population of around 260m, but a car ownership rate of just 4%, according to figures from Pew Research Centre. Indonesia’s capital city Jakarta, a city with a population of 10.5m, is already overburdened by traffic. It is also one of the fastest-growing cities in terms of new car ownership and already ranks as one of the world’s most congested cities, with vehicle emissions accounting for 70% of air pollution in Jakarta. On average, drivers in Jakarta spend 184 hours a year stuck in traffic, incurring around $7.1bn in economic losses. Traffic congestion is also a major challenge in other urban areas, such as Mexico City, which is the world’s most congested city. Nearly half of all residents own cars, with 4.7m cars registered in Mexico City and an additional 5.1m registered in the surrounding Mexico State, according to the National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía, INEGI). Mexico City has implemented measures to restrict the use of cars, but the city remains dependent on passenger vehicles as many residents need to travel long distances from their residences to their workplaces.

Congestion

After the UN ranked Mexico City as the world’s most polluted city in 1992, officials worked to improve emissions standards for vehicles and provide alternative transportation. The introduction of requirements for catalytic converters and other emissions controls helped cut the amount of lead in the air by 90% and the levels of particulate matter by 70% between 1990 and 2010. While Mexico’s capital is no longer the worst city for air pollution, it still needs reduce congestion and lower CO₂ emissions caused by vehicles. Other cities around the world are also confronting the challenge of congestion. In Algiers there are now more than 300,000 cars operating on a road system that was originally designed to handle 40,000. Meanwhile, there are nearly 7m registered vehicles in Saudi Arabia, about one-third of which are registered in Riyadh, the most-congested city in the Middle East. Riyadh’s population is expected to rise from 6.5m to 8.3m by 2030. In addition, the city is planning to add 1500 km of new roads to help accommodate its growing population.

In addition, many mega-cities across the globe have experienced significant increases in motorcycle usage. “The motorcycle market is relatively new in Mexico; it is growing slowly and it continues to face some prejudices around it,” Fernando Zapata, the director general of Grupo Zapata, told OBG. “In some other countries the use of motorcycles is part of a lifestyle, while here it is something you buy when you cannot afford a car.” Motorcycle ownership increased from just under 294,000 in 2000 to more than 3.5m in 2017, according to INEGI. India is the world’s biggest market for motorcycles and scooters. For example, residents of Bangalore – a city whose population grew from under 5.6m in 2000 to nearly 11.4m in 2018 – now own nearly 5m motorcycles and scooters. This rise in motorcycle ownership arose in tandem with increasing congestion problems in the city, with motorcycles and scooters now making up 70% of cities vehicles. Moving forwards, the adoption of electric cars and scooters may help decrease urban air pollution. However, in the longer term more significant improvements are likely to be driven by investment in public transport.

Rail

In major cities metro rail lines form the central pillar of the public transport system. One city that has emerged as a world leader in urban rail transit is Seoul. The metro system in South Korea’s capital city transports 7m passengers a day over 1600 km of track. The system includes nine lines, eight of which are operated jointly by the city council-owned Seoul Metro and Korea Railroad Corporation, the state-owned rail company. Additionally, Line 9 is run as a joint venture between domestic private firm Hyundai Rotem and international public transport firm RATP Dev Transdev Asia. The city also has a commuter rail linking the central station to Seoul’s new international airports.

While the city has set a high bar for the possibilities of urban mass transit, other cities around the world are making efforts to catch up. City planners in Algeria have been working to expand the country’s metro network. The country inaugurated its first metro line in the city of Algiers in 2011, and in 2018 Algeria introduced two metro lines and two new tram lines. Algiers now has 17 metro stations, which carried between 100,000 and 200,000 passengers a day in 2018, according to the Algerian Business Leaders’ Forum. Residents of Algiers expect further additions to the public transport network, with the authorities planning further extensions to the metro system and a revamp of the cities roads, tramway system and public bus fleet.

While many emerging mega cities are coordinating construction of new metro systems from the ground up, other countries are working to adapt older systems for rapidly expanding populations. In Brazil many of the early mass transit systems built in the early 20th century were dismantled between the 1930s and 1970s. Rio de Janeiro and São Paulo stand out in Brazil for preserving and expanding their public transport networks. Although more than a dozen cities in Brazil have built rail-based public transport networks, Rio de Janeiro and São Paulo are the only two cities in the country that have fully functional underground metro systems. Municipal authorities are undertaking efforts to improve this system further, with a major extension of the São Paulo metro system earmarked for completion by 2020. The expansion project features 11 new stations along 14.4 km of track with four integrated bus terminals, and has been developed under a public-private partnership supported by the World Bank.

In Jakarta, over-reliance on cars has contributed to severe congestion and rendered buses slow and inefficient. The centrepiece of the city’s public transport overhaul is a mass rapid transit system. The first phase of the project, which opened in March 2019, comprises 13 stations across 16 km of track, connecting the south of the city to the business district. The $1.2bn project is expected to move 170,000 passengers a day. The second phase of the project, which will expand the network to the north of the city, is expected to open in 2024. The government hopes that as infrastructure comes on-line, public transport will accommodate 60% of commuters by 2030. Meanwhile, Cairo – the largest city in Africa – was an early adopter of mass transit in the region, opening the first fully fledged metro system on the African continent in 1987, which carries over 4m passengers a day. As part of the country’s Vision 2030 development programme, the government plans to develop a further 180 km of metro lines to accommodate over 7m passengers per day.

Gulf Projects

Given the relatively recent urbanisation of the Gulf, many cities grew around the prominent use of cars and therefore have limited public transport systems. However, the 21st century has brought a number of key projects to the region. This began with the opening of Dubai’s metro in September 2009, followed by Makkah’s metro, which opened for the Hajj season in 2010. The entirety of Doha Metro in Qatar gradually came into service between May and December 2019, composed of three lines covering 76 km. There is scope for the addition of another line and the extension of existing lines in the coming years. Doha Metro is also set to be one of the fastest driverless train systems in the world, with speeds of up to 100 km per hour, and is expected to contribute to a 50% reduction in traffic congestion. An added benefit of the system will be its use for the 2022 FIFA World Cup, to be held in Qatar during November and December of that year.

Another international event to be held in the region is Expo 2020, originally slated to take place in Dubai from October of that year until April 2021, though likely to be delayed due to Covid-19. To prepare for the increase in visitors, the city’s Roads and Transport Authority enacted a 15-km extension to the current metro system, known as Route 2020. The expansion will bring the city’s total network to 110 km of metro track, with hopes to extend the network to 421 km by 2030.

Riyadh is also in the process of building a $23bn metro system, which is slated to begin operating in the second half of 2020 but may see delays due to Covid-19-related supply chain disruptions. The new metro system will use driverless electric trains running on six lines, covering 176 km of track and connecting 85 stations. Upon completion, the Riyadh Metro is expected to increase the share of residents using public transport from 2% to 20%.

Medellín, the second-largest city in Colombia, hosts the country’s only rail-based urban mass transit system. The Medellín Metro includes two intersecting rail lines and four cable car routes as well as two high-capacity bus lines, a tram route and a complementary system of buses. The rail system connects approximately 27 stations, while the tram service links nine stations. The rail system began operating a limited capacity in 1995 and expanded to its current capacity in 2013. “Public transport is a priority in cities like Medellín,” Humberto Iglesias, the transport minister of Medellín, told OBG. “We are going to keep investing in public transport.”

Despite a series of major delays, the Lagos Rail Mass Transit project is expected to be fully operational by 2022. The new transport system is slated to include seven lines connecting different areas of the city. When the urban rail system is completed it could decrease residents’ average commuting time from two and a half hours to just 37 minutes. In July 2018 the Lagos state government signed an agreement with French infrastructure giant Alstom to finish construction of the system’s blue line. Upon completion the blue line is expected to connect 13 stations along 27 km of track and carry 400,000 passengers each day.

Bus

Bus-based mass transit systems provide another critical tool for improving urban mobility in both smaller cities and major metropolises. In Latin America, cities such as Bogotá, Mexico City and Santiago de Chile have invested heavily in the development of their respective bus systems. Bogotá’s TransMilenio articulated bus system was an early pioneer in this regard, with its network covering 12 routes spanning more than 114 km as of March 2019. The city’s bus network carries more than 1.7m passengers every day, a significant proportion of Bogotá’s 10.6m residents.

Smaller cities are also implementing smart bus systems, many of which incorporate new green technology. For example, in September 2019 Indianapolis introduced an electric bus system and had more than 30, 18-metre buses in operation by the end of the year. Los Angeles – the second largest city in the US – is moving beyond its car-dependent image, with the city government is in the process of replacing its entire 2200-vehicle bus fleet with electric vehicles. Meanwhile, Riyadh – the fifth largest city in the Middle East – is expanding its bus network to include 956 buses travelling routes spanning over 1000 km.

Jakarta has also followed Bogotá’s example by investing in a rapid bus transit system. The 120-mile TransJakarta system provides an alternative to passenger vehicles, with its air-conditioned buses carrying over 350,000 passengers every day. Many cities around the world are following suite, finding ways to open and operate new environmentally conscious bus systems.

Bike Lanes

Bicycles are also set to play a critical role in the transport systems of 21st century cities. Copenhagen and Amsterdam are known around the world as bike-friendly cities. Nearly two-thirds of Copenhagen’s residents commute on bicycles, making use of 350 km of dedicated bike lanes. In addition, mid-sized urban areas like Boulder and Montreal are also investing heavily in bike lane infrastructure. Within Latin America, Rio de Janeiro has led the way in embracing bicycle-based transit and building bike-friendly infrastructure. The city offers over 435 km of well-paved bike lanes, the largest network in South America. Buenos Aires has also made significant investments in bicycle infrastructure. The city has a municipally run service that provides free bicycle-sharing services for residents and tourists to use, with over 195 km of dedicated bike lanes as of March 2019. In Jakarta thousands of cyclists enjoy Sunday morning rides on the city’s carfree days, but struggle to make use of their bicycles as a tool for commuting. In 2005 Bogotá initiated a weekly Ciclovía every Sunday, granting cyclists exclusive usage of some of the city’s main avenues. Mexico City has built a dedicated bike line along Reforma Avenue in the city centre and opens a recreational cycling-only route on Sundays. Furthermore, the city’s public EcoBici bike-sharing programme has over 120,000 users. Nevertheless, cycling advocates state that the city still lacks sufficient infrastructure to make longer distance commutes to the city centre feasible and safe. In Cairo, urban planners are working to address the city’s long-standing congestion problems by introducing a new bike-sharing programme and building over 700 cycling lanes. In China, Beijing was long touted as a world capital for bicycle commuting; in 1980 nearly two thirds of all commuters in Beijing rode bicycles, but by 2014 that reduced to less than one-fifth.

More recently, Beijing has started to experience a massive expansion in cycling thanks primarily to the introduction of more than 16m shared bicycles by around 60 new bicycle-sharing firms. City planners are aiming to support bicycle and pedestrian transport by expanding the city’s network of bike lanes and sidewalks to over 3000 km by the end of 2020, highlighting the need for proactive planning to ensure cities become more bicycle-friendly.

Creative Solutions

A number of start-ups have recently emerged, following in the wake of ride-hailing apps such as Uber, Lyft and Didi, to provide access to privately owned, shared-use scooters and electric bicycles. “New semi-public modes of transit such as ride sharing and shared vehicles are challenging conventional urban transport planning and providing a more tailored mobility solution,” Mariana Torres, vice-president at New York-headquartered John Laing Investments, told OBG. Two Chinese two-wheel vehicle-sharing companies – Ofo and Mobike – are starting to expand their operations outwards across Asia, Europe and the Americas.

Electric scooter-sharing apps are also emerging, with the launch of Bird in Santa Monica by former Uber executives in September 2017. Santa Monica is already taking a leadership role in embracing car-free transit and providing infrastructure to facilitate the adoption of electric scooters. Bird has since expanded its operations, launching in Mexico City in October 2018, with plans to enter other major cities in Latin America.

Meanwhile, GO-JEK, an Indonesia-based motorbike ride-hailing and delivery platform, now allows users to rent electric scooters as an alternative option for dealing with the city’s congested streets. Nevertheless, while electric scooters and motorcycles – facilitated by ride-hailing and sharing services – may constitute a welcome alternative to private cars, they remain a complement to, rather than a replacement for, sufficient investment in rail and rapid transit bus systems.