Cable cars are taking Latin America by a storm

A cable car above Caracas. Image: Getty.

Cable cars are a transportation system composed of a series of cars suspended from thick cables supported by large, widely spaced towers. The name can be confusing in an American context, where it generally refers to cable-drawn rail cars such as the trolleys of San Francisco; instead, such systems are often referred to as “chairlifts”, or (this is cute) “gondola lifts”.

Whatever you call them, the technology has long been used at ski lifts, and they’re a favourite attraction at amusement parks as well. But recently, they’ve found a new application: public transport.

This new wave of urban chairlift construction kicked off in Medellín, Colombia, which introduced the new system to serve underprivileged hilltop neighbourhoods. Each line was given a letter and colour, in a move which deliberately echoed the branding of the city’s existing metro system.

Construction of the new system, the Metrocable Medellín, was completed in 2004. Soon, the idea caught on across Latin America, and cable cars began hauling passengers in major cities such as Caracas, Manizales, Rio de Janeiro, and most recently La Paz, Bolivia.

The official map of Medellín's tranpsort network, showing traditional metros, cable cars and bus rapid transit lines.

It’s easy to understand why these systems draw so much attention. Unlike buses, which grumble along at street level, and subways which are buried out of sight, cable cars soar majestically above the cityscape, offering dramatic views to riders.

But the reason they’ve taken off in Latin America, and especially in mountainous cities where informal developments tend to concentrate on hilltops, is for their ease of construction over steep terrain. Bus-based public transit is often unreliable or unavailable to slum dwellers, and in hilly neighbourhoods buses are slowed by twisting streets. Cable cars, by contrast, glide effortlessly over these areas.

Such systems have in many cases been created with the express purpose of making life better for people living in slums, while showing respect for the autonomy of such communities. Arturo Brillembourg, an architect with Urban Think Tank and one of the developers of the Caracas Metrocable, said in an interview with Architonic: “Our concept is based in architecture that has the ability to change according to the transformation of the informal city and the dynamics among its inhabitants. We only provide the framework for future adaptation.”

These noble ideas of community empowerment are echoed by the writing on the cars themselves, emblazoned with bold slogans like “social ethics”, “participation”, and “love” (also, simply “Venezuela”). Cars in Medellín aren’t so outspoken, but their human representatives are. A headline from the website El Colombiano proclaims: “The Metrocable is quality of life”.

But the cars are not without their technical drawbacks. First, their capacity is much lower than conventional mass transit: a system designed for high capacity can typically haul 3,000 people per hour in each direction, which sounds like a lot until you consider that the same number of people can be carried by just three subway trains. They’re also slower than conventional transit, ambling along at 10 mph (16 kmh), the speed of a leisurely bike ride. And then there’s the safety issue. While proponents maintain that chairlifts are statistically very safe, the idea of dangling in a car suspended hundreds of feet above the ground from a cable no thicker than your wrist is still enough to make many riders squeamish.

The public response to these systems has varied. In Medellin, it’s been one of almost unanimous support: proponents boast of sharp drops in crime and increases in investment, crediting it as one of the keys to the “Medellin miracle” in which the city turned itself around after widespread drug-related violence in the 80s and 90s. In Caracas, the cable cars have become so much a part of daily life that users angrily lashed out after an unannounced closure in late 2012. La Paz’s system seems to be doing well, too; despite initial concerns about price, a report last month found the system to be a success.

Those in Rio de Janeiro have been somewhat less successful, however. A report from the website Rio on Watch noted that ridership was lacklustre, despite the fact that the line has worked well for some residents of the Complexo do Alemão favela that it serves. It also cited transportation specialist Raul Lisboa, who claimed that system in its current state does not effectively cover all areas of the favela.

The biggest failure in the use of cable cars isn’t anywhere in Latin America: it’s in London, where the Emirates Air Line across the Thames was constructed in 2012 to much fanfare in the lead-up to the Olympics. Today, the line serves a fraction of the people who took it during the games; the Evening Standard reports that the line only gets four regular commuters per day.

Urban cable cars are relatively new – but even from their short track record, it’s clear that they excel in some situations but fail in others. Let’s hope that the planners take this into account, before the next wave arrives.

Credit for image of Metrocable cars above a Medellín street: Jorge Gobbi, via Flickr, reused under creative commons.

 
 
 
 

High streets and shopping malls face a ‘domino effect’ from major store closures

Another one bites the dust: House of Fraser plans to close the majority of its stores. Image: Getty.

Traditional retail is in the centre of a storm – and British department store chain House of Fraser is the latest to succumb to the tempest. The company plans to close 31 of its 59 shops – including its flagship store in Oxford Street, London – by the beginning of 2019. The closures come as part of a company voluntary arrangement, which is an insolvency deal designed to keep the chain running while it renegotiates terms with landlords. The deal will be voted on by creditors within the month.

Meanwhile in the US, the world’s largest retail market, Sears has just announced that it will be closing more than 70 of its stores in the near future.

This trend of major retailers closing multiple outlets exists in several Western countries – and its magnitude seems to be unrelated to the fundamentals of the economy. The US, for example, has recently experienced a clear decoupling of store closures from overall economic growth. While the US economy grew a healthy 2.3 per cent in 2017, the year ended with a record number of store closings, nearly 9,000 while 50 major chains filed for bankruptcy.

Most analysts and industry experts agree that this is largely due to the growth of e-commerce – and this is not expected to diminish anytime soon. A further 12,000 stores are expected to close in the US before the end of 2018. Similar trends are being seen in markets such as the UK and Canada.

Pushing down profits

Perhaps the most obvious impact of store closures is on the revenues and profitability of established brick-and-mortar retailers, with bankruptcies in the US up by nearly a third in 2017. The cost to investors in the retail sector has been severe – stocks of firms such as Sears have lost upwards of 90 per cent of their market value in the last ten years. By contrast, Amazon’s stock price is up over 2,000 per cent in the same period – more than 49,000 per cent when considering the last 20 years. This is a trend that the market does not expect to change, as the ratio of price to earnings for Amazon stands at ten times that of the best brick-and-mortar retailers.

Although unemployment levels reached a 17-year low in 2017, the retail sector in the US shed a net 66,500 jobs. Landlords are losing longstanding tenants. The expectation is that roughly 25 per cent of shopping malls in the US are at high risk of closing one of their anchor tenants such as a Macy’s, which could set off a series of store closures and challenge the very viability of the mall. One out of every five malls is expected to close by 2022 – a prospect which has put downward pressure on retail real estate prices and on the finances of the firms that own and manage these venues.

In the UK, high streets are struggling through similar issues. And given that high streets have historically been the heart of any UK town or city, there appears to be a fundamental need for businesses and local councils to adapt to the radical changes affecting the retail sector to preserve their high streets’ vitality and financial viability.


The costs to society

While attention is focused on the direct impacts on company finances, employment and landlord rents, store closures can set off a “domino effect” on local governments and businesses, which come at a significant cost to society. For instance, closures can have a knock-on effect for nearby businesses – when large stores close, the foot traffic to neighbouring establishments is also reduced, which endangers the viability of other local businesses. For instance, Starbucks has recently announced plans to close all its 379 Teavana stores. Primarily located inside shopping malls, they have harshly suffered from declining mall traffic in recent years.

Store closures can also spell trouble for local authorities. When retailers and neighbouring businesses close, they reduce the taxable revenue base that many municipalities depend on in order to fund local services. Add to this the reduction in property taxes stemming from bankrupt landlords and the effect on municipal funding can be substantial. Unfortunately, until e-commerce tax laws are adapted, municipalities will continue to face financial challenges as more and more stores close.

It’s not just local councils, but local development which suffers when stores close. For decades, many cities in the US and the UK, for exmaple Detroit and Liverpool, have heavily invested in efforts to rejuvenate their urban cores after years of decay in the 1970s and 1980s. Bringing shops, bars and other businesses back to once derelict areas has been key to this redevelopment. But today, with businesses closing, cities could once again face the prospect of seeing their efforts unravel as their key urban areas become less attractive and populations move elsewhere.

Commercial ecosystems featuring everything from large chain stores to small independent businesses are fragile and sensitive to change. When a store closes it doesn’t just affect employees or shareholders – it can have widespread and lasting impacts on the local community, and beyond. Controlling this “domino effect” is going to be a major challenge for local governments and businesses for years to come.

Omar Toulan, Professor in Strategy and International Management, IMD Business School and Niccolò Pisani, Assistant Professor of International Management, University of Amsterdam.

This article was originally published on The Conversation. Read the original article.