#5 Dethroning Cash as King
Or, at least finding the pitchforks that work
Hey there, welcome to the fifth issue of this newsletter. You probably have a lot of zoom meetings on your calendar so let’s dive in, shall we?
Let’s start with a makeshift-mobility-slice-of-coronavirus-life :
Bangladesh went into lockdown on March 26th, but that didn’t stop Zohirul from taking his bicycle rickshaw out onto the backstreets of Dhaka, the capital, a couple of times. On his first outing he earned just 200 taka, or $2.40, less than a fifth of what he normally makes. On the second he was caught by the police, who beat him, injuring his leg so badly he can no longer peddle his rickshaw. Since then he’s been nursing his wounds and husbanding his stores of rice. “I don’t know how I’m going to earn or buy food once this runs out,” he says.
That was the harrowing lede from “Asia’s workers can’t afford to stay at home” (soft paywall) in The Economist last week.
The chart that accompanied the piece, on the size of the informal economy in eight countries shows that, in many parts of the world, the informal economy is THE economy. Just look at the chart:
The corollary is that, in most of the world, informal transportation = public transportation. And, as we discussed the last time, life in informal transportation is defined by precarity and hypercompetition built on an all-cash economy delivered in daily transactions.
Which is probably why one of the most popular, and much tried, innovations in makeshift mobility is to move to cashless fare collection (CFC).
On the face of it, it makes sense. Moving away from cash transactions could help drivers and operators smooth out their income streams, could introduce them to formalized banking, and could also deliver critical data to policymakers.
But, just because something makes sense doesn’t mean it will work.
There’s an app for that (but only if you’re on a motorcycle)
Last year, Robert Behrens and Tinka Aruho released a survey of cashless fare collection initiatives in Sub-Saharan Africa, covering 24 efforts in nine countries (Benin, Cameroon, Kenya, Nigeria, Rwanda, South Africa, Tanzania, Togo, and Uganda).
Their survey included efforts that were: planned but never piloted; piloted then abandoned; piloted, launched, and abandoned; piloted and still underway; and, piloted, launched, and still in operation. It also covered various makeshift mobility modes - from buses, to minibuses, motor tricycles, and motorcycle taxis.
The CFC initiatives stretch back to 1999, before the age of apps, smart phones, or mobile money. (South Africa’s FairCard’s many iterations included prepaid cards that you could get from a kiosk.)
Most of the efforts started after 2015 within the app-ified world of smartphone payments and location data.
Sadly, only half of the initiatives survived. Mostly the ones for motorcycle taxis. Efforts with minibuses almost all failed despite eight of them getting to a pilot.
Charts from: Aruho T and Behrens R, 2019: Cashless fare collection in Sub-Saharan African paratransit: A review of experiences, 38th Southern African Transport Conference, Pretoria.
To try to understand why some succeeded and some failed, Behrens and Aruho looked at the stakeholders involved in each initiative. They wanted to identify which factors were “industry imposed behaviors & not paratransit driver intrinsic behavior.”
They posit that it was tougher to get CFC to work for minibuses because of the rules (and vested interests) imposed by large stakeholder organizations like Kenya’s Savings and Credit Cooperatives Societies (SACCOs) and the federations of taxi operators in South Africa.
I’m guessing this study is just part of what will be Aruho’s forthcoming dissertation so I’m eager to see what comes next. (Behrens and Aruho have a short slide presentation here.)
Prof. Behren runs the African Centre of Excellence in Public and Non-motorised Transport at the University of Capetown. ACET is one of the few places doing extensive research on informal transportation these days, thanks to a grant from the Future Urban Transport programme of the Volvo Research and Educational Foundations.
Innovations Value Chain
In the monograph I wrote on innovations in informal transportation, cashless fare collection falls on the right side of the value chain.
But it can be the camel’s nose (a very big nose) in the tent. Cashless fare collection also brings in changes in hailing (hail and pay via app) and could also change the way the system managers (read: governments) permit and regulate routes.
More on that next time.
The force is all about balance
Btw, did you catch this video of the makeshift mobility driver that could stop and balance his autorickshaw on a beer bottle?
As user Radioactive-235 commented on reddit, “That man has more control of that rickshaw than I have control over my life.”
I agree.
That’s it for now. Catch you in two weeks. Till then. Stay safe and make sure you take naps after the zoom calls.
I’m Benjie de la Peña, a transport geek and urban nerd. I live in Seattle with my family and two cats who, thankfully, are helping to lower the curve by staying indoors. (Have you tried getting a cat to wear a mask?)
I think a lot about strategic design, institutional shifts, and innovation. I believe makeshift mobility could be the single greatest lever to decarbonize the urban transport sector --but only if we can organize.