Brazil Burns With Bus Fares Double NYC: Chart of the Day

Brazil Burns With Bus Fares Double NYC: Chart of the Day

Brazil Bus

Residents of Sao Paulo and Rio de Janeiro devote a bigger share of their paychecks to mass transit than counterparts around the world even after winning a fight to revoke a 9-cent increase in bus fares.

The CHART OF THE DAY shows residents of Brazil’s two biggest cities must work an average 10 minutes to pay for a bus ticket, more than twice the time needed in Paris or New York. The comparison is based on the latest report by UBS AG on purchasing power in 72 cities. In Beijing and Mumbai, less than four minutes of work buys a ticket.“It ends up weighing on people’s budgets,” said Samy Dana, a professor at Getulio Vargas Foundation’s business school in Sao Paulo, who first noted the disparity using the UBS data. “Price is only half of the picture. If you look at the quality of public transport, the situation is even worse.”

A wave of protests, the biggest in two decades, erupted across Brazil three weeks ago as a result of fare increases that became a symbol for popular discontent with the cost and poor quality of public services. In a bid to quell the unrest, authorities last week canceled the 7 percent fare jump, returning the price of bus tickets in Rio and Sao Paulo to 2.75 reais ($1.25) and 3 reais respectively.

In Sao Paulo, dissatisfaction with public transport is running at the highest level in 26 years, with the quality of service rated horrible by 55 percent of those surveyed in a poll this month by Datafolha. The average wait time for a bus in Brazil’s biggest city is 21 minutes, according to a poll of 1,512 residents taken last year by Ibope.

One way to improve transportation in Brazil is for the government to boost funding, said Jerome Pourbaix, head of policy at the International Association of Public Transport in Brussels. While mass transit in many European cities relies on subsidies for about 50 percent of funding, the cost of bus service in Brazil falls largely on riders, he said.

Still, with Brazil’s economic growth forecasts being cut, and local governments banned from issuing debt, budgets are already stretched. That means the bumpy ride for Brazilian strap-hangers may continue.

To contact the reporter on this story: Joshua Goodman in Rio de Janeiro at jgoodman19@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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