Far beyond the fare, debates on the financing of transport pave the way to guarantee access
By Luize Sampaio
The new coronavirus pandemic has changed the way cities operate. The main concern now is the preservation of life and the guarantee of the continuity of access to health and education, which are rights assured to everyone by article 6, of the Federal Constitution. These social rights should help to create basic conditions of equality for everyone and their function is even more evident during crises such as the one we are experiencing. Recent attempts to guarantee them were the proposals for the virtualization of teaching and the creation of field hospitals. However, much has been discussed about the limits of access to these alternatives for a large portion of the already vulnerable population.
In 2015, access to transport entered the list of basic social rights. Although delayed, constitutional amendment 90/15 guaranteed that, like health and food, transport has to be accessible and comprehensive to all the population. But how is this really applied?
With the decree of quarantine and the official adoption of social isolation, the movement of the population around the city has fallen and one of the most affected sectors is the transport system. Among the strategies to contain the spread of the virus, governor Wilson Witzel ordered a cut of 50% of the capacity of public transport, a measure also followed by the mayor of Rio, Marcelo Crivella, who prohibited travel with standing passengers. The restrictions were published in the Official Gazette of the State on March 17.
Eight days after this decree, on March 25, the president of Rio Ônibus, a union of the bus companies in the city of Rio, Cláudio Callak, went public to say that without the financial support of the local government, they would be forced to stop bus operations by the following Friday, March 27. Crivella then asked for the understanding of the companies. The two sides have been in a legal battle since 2017. And now the bus companies wanted to increase the fare from R$ 4.05 to R$ 4.25.
The companies' reaction was already expected by the representative of the Embarque por Direitos [Get on Board for Your Rights] campaign, Cleo Manhas. The political advisor from the Institute for Socioeconomic Studies (Inesc) believed that one of the possible moves of the companies would be to appeal to the government in search of financial funds. This is because, according to Cleo, the profit of the bus companies is closely linked to the overcrowding of the public transport. Therefore, if there are now measures to reduce this, they would claim these amounts. However, for her, the government money needs to be used in other more urgent areas.
“The bill for this moment that we are going through will arrive. I thought it was going to arrive after the coronavirus, but it looks like it's coming now. I do not believe that they (the bus companies) are unable to operate. This is pressure, a cowardly pressure at the time when we have people who are much more vulnerable than the owners of bus companies, such as the users of public transport. We have informal workers without employment, such as street vendors and maids. These people should have priority over what the State is going to offer and not the bus companies,” said the expert.
However, on that Friday, March 27, the bus circulation in the city of Rio did not stop. Crivella pledged to appeal to the federal government to obtain funds and to maintain the operation of the system. According to Rio Ônibus, the operating costs of the bus system are covered exclusively by the fare paid by the user. If the fare is the only source of income to maintain the operation, does this mean that the turnstiles dictate the amount of the fare?
The union of bus companies provides, on its website, a formula created in 2010, the same year that the single ticket appeared, used to stipulate the fare readjustment from 2011 onwards. Expenses with labor, diesel, tires and not listed “other expenses” are some of the elements included in this formula that can reduce or increase the fare.
The graphs below show that even with the reduction of expenses with variables that are the basis for the calculation of the readjustment, such as the manpower that was reduced by the removal of conductors, the fares in the city of Rio continued to increase. Based on information from Data Rio, between 2010 and 2018, we analyzed the historical series on the number of workers in the bus companies, which indicates a 30.7% reduction in manpower, falling from 40,195 to 27,839 people.
As can be observed in the graph below about the number of buses in circulation, there was a decrease of 23% during the same period, which represents 2,000 fewer vehicles. The reduction pattern was also maintained in the number of bus routes and diesel consumption. The total number of routes fell by 20%, from 925 to 731. The consumed fuel decreased by 15%.
The falls shown above also produced a 15% reduction in the number of journeys made annually. The graphs show that Rio Ônibus is trying to economize its activities but, in the midst of all these falls, two other important elements have not stopped increasing. Firstly, the fare price, which, in 2010, was 2.40 reais and reached 3.95, in 2018. The second is the growth in the number of total paying passengers per year, which, in the period under analysis, increased by 14%. The total amount of fares paid went from 860 million, in 2010, to 880 million, in 2018.
From this premise, we made some enquiries about the fare increases since 2011. Below, it is possible to see the weight that each of these numbers that we present has in the final readjustment value of the fare. It is clear that even with the downsizing of the number of workers, bus routes, fleet size and other expenses, the fare continued to increase along with the number of total paying passengers, who represent the annual number of fares charged. We then formulated the “howevers” that the Rio Ônibus formula does not explain.
[The “Howevers” of the formula
DIESEL OIL, BUS TIRES, VALUE OF HEAVY VEHICLES FOR TRANSPORT, MANPOWER, OTHER EXPENSES. AMOUNT OF THE FARE
Manpower represents almost one-half of the operating cost. Would its reduction not produce a considerable impact on the final calculation of the fare?
The fleet lost 2,000 vehicles. Should the maintenance amount not be revised?
The number of paying passengers increased even with fewer vehicles and journeys, and so why did the fare increase?
Additional revenue such as advertising on the buses is not included in the formula. Where do these funds go?]
What is happening today in the city of Rio is a reflection of a common scenario in Brazilian cities in which bus operations depend exclusively on the passenger fares to operate. In order to understand this context, it is important to identify that transport within municipalities and their operation are by law (Constitution, article 30, item V) the jurisdiction of the local government. Each mayor determines by whom and how the operation will be performed, as well as the amount of the fare readjustment. According to the director of the National Movement for the Right to Quality Public Transport for Everyone (MDT), Nazareno Stanislau, it is in times of crisis that these designations show their flaws.
“Currently, the municipality is an entity that does not talk to the state, which in turn does not talk to the federal government. Each one has its own interests, and so there is no coordinated transport policy. In ABC Paulista, they initially wanted to suspend the transport, in Goiânia they decided to reduce 30% (of the fleet) during peak hours, causing lines. What are the authorities doing? They reduce the number of buses, but increase the agglomeration of people in the same vehicle. Then you spread the virus much more than if everything was normal and you could get on an empty bus,” says Nazareno.
For the MDT, there needs to be dialogue between the three branches of government. The movement believes that the first step is to create an integrated system, a kind of SUS for transport that is capable of acting in times of calamity with the same efficiency that the Universal Healthcare Program presents, despite a lack of resources.
“We designed the SUM, which would be the Single System of Mobility, a structure for the state to provide public transport. Under the constitution, it is equal to education and health. Public transport is an essential service and a social right. It should be treated like these other services. Each party (municipality, state and federation) would enter with its stage of contribution as it is for health, for example. It is because of this organization of the SUS that we are confronting the coronavirus with a level of medical quality that is superior to that of other countries with the same dimensions , but transport is a mess,” explained the director.
The cost of transport on the pocket
A survey released by the IBGE last year showed that the Brazilian population spends more on fares and transport than on food, which is an alarming statistic that strengthens the discussion about the implementation of policies of extra fare financing or even zero fare programs. However, for these scenarios to become a reality, it is necessary to seek forms of financing that are capable of paying this bill.
In addition to placing access to public transport on the same level as health and education, article 6 defines that it is the responsibility of the State to promote public policies to encourage its proper operation. This resulted in the emergence of laws and bills designed to finance public transport. The Embarque por Direitos campaign seeks the regulation of this amendment, i.e., the preparation of guidelines and rules on how to apply this inclusion.
“Before the campaign, we entered into a partnership with Carlos Henrique Ribeiro, doctoring in economics at the University of Brasília, for the preparation of a study about what would be a financing fund for transport. There is no point in the legislature making a law that guarantees free travel or that changes the fare operation without first looking at the budget issue. This is because there is no way to add a fixed expense in this way without the consultation and approval of the PPA (Multi-annual Plan), to give a national example,” explains Cleo.
How to reduce the final price of the tickets?
Experts point out that the creation of a federal mobility fund would be the start in the reduction of bus fares and could be composed of a series of taxes and fees. Federal Law 12587/12, known as the Law of Urban Mobility, states that all revenue referring to the taxation of public highways, such as the charge for urban tolls, for example, should be applied exclusively to the subsidy of the fares and in the infrastructure of non-motorized modes and public transport. A mobility fund would then comply with this guideline. According to the director of the MDT, it is also necessary to pay attention to the taxation of sectors that profit directly from public transport without giving anything in return.
“The fact that the bus is in the congestion of the car makes it cost 20% more for the user. We usually say that everyone is against the urban toll for the car, but what is the urban toll that the transport user pays? We will take funds from those who benefit economically from the transport system. There are several sectors that benefit and pay nothing. In São Paulo, only the increase in the IPTU in the areas that the subway passes would be enough to subsidize the entire work of this transport. Worldwide today, no system of transport exists without taxing the real estate sector,” explained Nazareno.
The residents of Queimados, a municipality in the Metropolitan Region of Rio, perceive the creation of a municipal mobility fund as an alternative to placing already existing municipal laws into practice. Among them, Law 1355/17, which authorizes the creation of a single ticket at the municipal level, and Law 1415/17, which allows the local government to create a special single ticket for the unemployed. These deregulated 2017 laws were "discovered" by a group of students from a public policy course in Queimados, held by Ampara with the support of Casa Fluminense last year. This discovery was made during the production of the Queimados Integrada [Integrated Queimados] campaign, which has as one of its targets the reduction of the cost of fares with the implementation of the municipal single ticket. Jorge Peixoto, one of the campaign mobilizers, explains how it was to discover the existence of these laws.
“Our proposal in the Queimados Integrada campaign changed when we learned that these laws already existed. The idea now is to complement the law that already talks about the creation of a mobility fund, but does not specify the sources of financing. This leaves a gap for the Executive to say that there is no money to make the B.U. (single ticket) happen, which may even be true,” said Peixoto.
The group has been thinking about ways to finance a mobility fund for Queimados. Among the taxes that they are considering claiming are the parking fees in public locations, the advertising revenue on the buses, and the tax rate from the ISS (Service Tax), but this revenue is still in the ideas stage. Two companies operate in the city: Fazeni Transport e Turismo Ltda and Gardel Turismo Ltda . Buses are the city's main form of public transport, which is divided in half by the train station.
The different realities of transport in the state of Rio de Janeiro
In the Agenda 2030 newsletter about mobility, published by Casa Fluminense last year, it was disclosed that a person who earns the minimum wage could spend up to 20% of his income with the daily use of a city bus. Even though transport is a social right guaranteed by law, in the municipality of Rio it is the passenger who pays in full for the costs of the bus service.
However, in cities neighboring the capital of Rio de Janeiro, the local governments are seeking other paths. In Maricá, for example, the zero-fare policy was introduced and the population has been guaranteed free access to the local municipal buses since 2013. Two main factors contributed to this, the first is the main issue as always: payment. The city is one of those that most receives funds of royalties from the oil exploration that takes place on its coast. This money is used to maintain the zero-fare program. The other factor is the creation of a public transport company that made the project viable and ended the monopoly of bus companies that had lasted over 40 years in Maricá.
There is also another municipality in Rio de Janeiro that has managed to guarantee free access for the entire population and without needing royalties. This is the case of Volta Redonda with the Zero Commercial Fare Program, which began in 2018. The city was the first in Brazil to have a public electric bus and today there are 3 vehicles that connect the commercial centers of Volta Redonda. The idea is to stimulate trade by increasing the circulation of people. The project was developed in partnership with the Municipal Department for Economic Development and Tourism.
This is the first in a series of reports about transport. In the next one, we will talk about two very important subjects for improving the system, which are transparency and the bidding processes. Keep reading!
This text was originally published on the website of Casa Fluminense, on May 29, 2020.