Analysis
16 May 18

Pros and cons of personal transport in Brazil

Although many commuters in Brazil opt for collective transportation services to get to and from work, some favor alternative means of transport due to overcrowded systems which may not provide the comfort they seek.

 

While buying a car is an option, the growing trend today is more about the shared usage of vehicles. Among the options in Brazil are Car-Sharing, Ride-Hailing, Peer-to-Peer Rental, traditional Rent-A-Car, and corporate fleet leasing. Let’s look at the pros and cons of each.

 

Car-Sharing, which basically involves renting a car for a few hours, is convenient if the service provider has enough cars throughout the city to serve all neighborhoods. With the use of technology, you can even pick up your car without speaking to another person, a model that attracts a lot of clients.

 

However, this model is not found in very many cities and the network of cars available are often quite small. Moreover, as many car-sharing companies require drivers to return cars to the same place they picked them up, this alternative becomes less attractive.

 

Commuters, in turn, commonly seek taxis or ride-hailing services. Among the ride-hailing companies available in Brazil are Uber, Cabify, Easy Taxi, and 99.

 

“As renting a car is equivalent to approximately four hours of ride-hail service, using a company such as Uber is ideal for up to four hours,” says Global Fleet advisory board member for Latin America Joao Andrade.
 

Another option is Peer-to-Peer Rental in which one rents a car from an individual (like Air B&B for cars). Some of the positives, according to Andrade, is that you can choose the exact car model you want and that it is usually cheaper than renting a car from a company.

However, the person renting you the car does not guarantee that it is in good mechanical shape. What happens if the car breaks down during renting? 

Moreover, many Brazilians don’t like sharing their personal cars. There are risks of the driver getting a ticket, using the car for illicit activities, or even stealing the car.

Although these alternatives are more common than in the past, their market share is still quite small and according to the executive, traditional car rental and fleet leasing companies are investing in infrastructure and technologies that make their services just as attractive.

As for Car Rental which is the largest and most mature business model in Brazil, one key positive is that these agencies assure the quality of the vehicles being rented.

For the corporate sector, this option is also becoming much cheaper as companies are adopting yield management systems, says Andrade who is also the general manager of Brazilian car rental and fleet management company Localiza.


Joao Andrade (Source: Localiza)

 

“As for Localiza, we are investing in new car rental locations to expand coverage and implementing new technologies aimed at making the car rental experience faster and more pleasant. One technology we offer is Localiza Fast, a counter by-pass rental procedure for special clients in our loyalty program,” says the executive.

 

Last but not least are longer term vehicle leasing agreements. As investments are higher and terms are longer, this is an option usually used by corporate clients seeking fleet and mobility solutions.

 

“Besides taking away the burden of owning a car, this model is a financially sensible product which enables companies to focus on their core business. To improve efficiency and make a difference for our clients, we are investing in a number of new technologies,” says Andrade.


If you would like to disover more about personal transport and fleet management challenges and opportunities in Latin America, participate in the 2018 Global Fleet Conference in Rome where Joao Andrade and others will be speaking during a dedicated session on Latin America. A unique occasion to learn and network

Authored by: Daniel Bland