After Rivalry with Taxis, Uber Launches R$ 6-Fare and Alarms Bus Sector

09/02/2016 - 10h26

Uber's strategy to encourage shared medium-distance rides in São Paulo city for the promotional price of R$ 6 (US$ 1.8), close to that of the tickets that include bus, subway and train on the same trip, alarmed businessmen of the mass transportation sector.

As it occurred in the 1990s, when the sector lost passengers to minibuses, it now worries that the competition with Uber might lead to the loss of passengers and disorganization of the services rendered under concession or permission contracts – which first occurred in the taxi market.

This week, Uber began to test the temporarily fixed fare of R$ 6 for the use of its cars in shared rides (with up to four passengers in each car) in an area previously defined and during the busiest hours.

From Pompeia (West zone) to Morumbi Shopping (South zone), for example, in a route of little more than 13 kilometers, the cost of the trip via public transportation (trains and buses) is R$ 5.92 (US$ 1.85)– only R$ 0.08 (US$ 0.025) short of the price paid if passengers chose Uber.

In the non-shared Uber category, the cost is R$ 40 (US$ 12.5), and in a conventional taxi, R$ 50 (US$ 15.6).

The São Paulo bus system cannot stay in business only with the tickets paid by passengers – that is why it received some R$ 2 billion (US$ 625 million) from City Hall in 2015.

Bus companies fear that other apps like Uber might enter the segment. For this reason, the directors of the national association of bus companies (NTU) have already requested a judicial report on the specifications of mass transportation to try to stop this type of venture.

Translated by THOMAS MUELLO

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