Large-scale infrastructure investment and vehicle-sharing platforms boost urban mobility

Across the globe the urban transportation sector is experiencing rapid expansion, driven by economic growth and a global demographic shift towards urbanisation. Politicians, urban planners and private sector actors are working together to find new solutions for reducing congestion and increasing the speed and efficiency of urban transport. However, unless proactive steps are taken to plan and invest in well-executed infrastructure, urban mobility can deteriorate.

Challenges & Potential

Urban mobility has become a critical quality-of-life issue worldwide, due to rising migration to urban centres and the emergence of mega-cities. According to the UN, 4.2bn people, or 55.3% of the world’s population, lived in urban areas in 2018. It will be crucial for governments to address the major negative side effects of growing urban populations. 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. On a global level, policymakers, city planners and the private sector are collaborating to reduce congestion and pollution, while allowing residents to move quickly and easily throughout urban spaces. New urban transport networks are combining 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

Urban residents continue to rely heavily on privately owned vehicles. Worldwide, the number of cars in use is expected to exceed 2bn by 2040, according to investment research firm Bernstein. Much of this will be driven by new vehicle purchases by the burgeoning middle class in emerging markets such as India, China, the Philippines, Indonesia and Vietnam. By 2025 the 600 largest cities in the developing world are expected to house 235m middle-class households earning an average annual wage of over $20,000 a year, according to the McKinsey Global Institute.

For example, Indonesia has a population of around 260m, but a car ownership rate of 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 one of the world’s most congested cities, with vehicle emissions accounting for 70% of urban air pollution. On average, drivers in Jakarta spend 184 hours a year stuck in traffic, incurring $7.1bn in economic losses. Traffic congestion is 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.

Congestion

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, approximately one-third of which are registered in the capital Riyadh, the most-congested city in the Middle East. Riyadh’s population is expected to increase from 6.5m to 8.3m by 2030.

In addition, many mega-cities across the globe have experienced significant increases in motorcycle usage. In Mexico City motorcycle ownership increased from just under 294,000 in 2000 to over 3.5m in 2017. “The motorcycle market is relatively new in Mexico; it is growing slowly but hasn’t yet become part of the lifestyle like in other countries,” Fernando Zapata, director-general of Grupo Zapata, told OBG. 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. Motorcycles and scooters now make up 70% of city’s vehicles. While the adoption of electric vehicles could help decrease air pollution, it still does not address the congestion problem. Thus, long-term solutions are likely to be driven largely by public transport.

Rail

In some major cities metro rail lines form the central pillar of the public transport system. The metro system in South Korea’s capital city Seoul transports 7m passengers per day over 1600 km of track. The system includes nine lines and a commuter rail linking the central station to Seoul’s new international airports.

Seoul has set a high standard for urban mass transit, and global governments are looking to catch up. City planners in Algeria inaugurated the country’s first metro line in the city of Algiers in 2011 and in 2018 added two metro lines and two new tram lines. Algiers now has 17 metro stations, which carried between 100,000 and 200,000 passengers per day in 2018, according to the Algerian Business Leaders’ Forum. Authorities in Algiers are now planning further extensions to the metro system and a refurbishment of the city’s roads, tramway system and public bus fleet.

Other countries are working to adapt older systems for rapidly expanding populations. In Brazil many of the mass transit systems built in the early 20th century were dismantled between the 1930s and 1970s. 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 severe congestion has 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 per day. The second phase of the project, which will extend to the north of the city, is expected to open in 2024. The government hopes that 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 in Africa in 1987, which carries over 4m passengers a day. As part of the Vision 2030 development programme, the government plans to develop a further 180 km of metro lines to accommodate over 7m passengers per day.

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 Metro in September 2009, followed by Makkah Metro, which opened for the Hajj season in 2010. Although not yet operational, Doha Metro is currently in the testing stage, and its first three lines are expected to enter into service by 2020, with 37 stations being included in the network. There is scope for up to 60 more stations, the addition of another line and the extension of existing lines, all of which are planned for 2026. Doha Metro is also on track to become one of the fastest driverless trains 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 to inaugurating the system in 2020 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, which will take place in Dubai. To prepare for the increase in events and visitors, the city’s Roads and Transport Authority enacted a 15-km extension to the current system, known as Route 2020, which will come on-line in May 2020. Route 2020 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 $22.5bn metro system. The metro will partially open in 2019 and is set to be fully operational by 2021. The new metro system will use driverless electric trains running on six lines, covering 176 km of track and connecting 85 metro stations. Upon completion, the Riyadh Metro is expected to increase the share of residents using public transport from 2% to 20%.

Bus

Mass transit systems that are bus-based provide another critical tool for improving urban mobility. In Latin America, Bogotá, Mexico City and Santiago de Chile have invested heavily in this segment. Bogotá’s TransMilenio articulated bus system was an early pioneer in this regard, with 12 routes spanning more than 114 km as of March 2019. The city’s bus network carries more than 1.7m passengers every day.

Smaller cities are also implementing smart bus systems, many of which incorporate new green technology. In 2019 Indianapolis is expected to introduce a 13-mile north-south electric bus system. Los Angeles – the second-largest city in the US – is in the process of replacing its entire 2200-vehicle bus fleet with electric vehicles. Meanwhile, Riyadh 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 251-km TransJakarta system carries over 350,000 passengers every day in air-conditioned buses.

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, which makes it the largest network in South America. Buenos Aires also 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 car-free days, but struggle to make use of their bikes 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 daily commutes feasible and safe. In Cairo urban planners are 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 bicycles were used by less than one-fifth of all commuters. However, Beijing has recently experienced a massive expansion in cycling thanks to the introduction of more than 16m shared bicycles by around 60 new bicycle-sharing firms. City planners aim to support this by expanding the network of bike lanes and sidewalks to over 3000 km by the end of 2020.

Creative Solutions

A number of new start-ups have emerged, following in the wake of ride-hailing apps such as Uber, Lyft and Didi, offering 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. For example, two Chinese two-wheel vehicle-sharing companies – Ofo and Mobike – are expanding their operations across the world.

Electric scooter-sharing apps are also emerging, with Bird being launched 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 to Mexico City in October 2018, with plans to enter other major cities in Latin America. Meanwhile, in Jakarta, GO-JEK, a local motorbike ride-hailing and delivery platform, began to allow users to rent electric scooters. Nevertheless, while electric scooters and motorcycles may offer an alternative to private cars, they remain a complement to, rather than a replacement for, investment in rail, bike and bus systems.