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Public transport and its impact on employment 

Peru
11.12.24
3
Peru has suffered some serious strikes recently called by several transport unions, preceded by various acts of violence against business owners, workers and public transport users. 

The Automotive Association of Peru estimated the economic losses caused by these events at more than PEN 240 million (about EUR 62 million) per day of strike.  

This brings to mind not only how citizen insecurity affects the activities of business owners and workers, but also how the public transport system impacts the participation of the population in employment – in particular, those who do not have access to private transport and suffer from a low-quality public transport offer. 

Insecurity and precarious public transport: barriers to formal employment

In Metropolitan Lima, most workers commute to work mainly by conventional, non-mass, non-integrated and predominantly informal public transport. According to a report by Lima Cómo Vamos (2023), the majority of Lima residents (52.5%) commute to work by minibus or van (26.8%) or by bus (25.7%). Only 14.6% use their own vehicle (62.5% in socioeconomic level A), and only 6.7% use the integrated mass public transport system (Lima Metro, Metropolitano bus system and complementary corridors).  

The cost of public transport, including the price of the ticket, the lack of interconnection between different modes of transport, traffic, and the time spent travelling to the workplace (the Movemos Association estimates that 48% of Lima residents spend between 1 and 2 hours travelling a day, and 26% spend 3 hours or more) represents a significant limitation in daily life and hampers access to employment and, in particular, formal employment.

The impact of mobility on work-life balance

In 2018, a report by the Andean Development Corporation linked mobility conditions in Lima to informal employment. According to the report, formal employment opportunities in Metropolitan Lima are concentrated far from the districts where most of the workforce lives. INEI data from the SUNAT taxpayer registry indicate that Lima-Centro has more than twice the business density per inhabitant than the average for the rest of Metropolitan Lima and five times more than Callao; and eleven times more density per square kilometer than the average for the rest of Lima and five times more than Callao. 

Thus, the further away from downtown Lima a person lives and the lower their socioeconomic level, the longer they will have to travel to find a formal job opportunity, using a low-quality public transport service. This comes with a cost in regard to the reconciliation of workers’ family and work life, their time off or training after work, and their productivity; to which is now added not only being exposed to accidents but also to organised crime. 

Takeaway for employers

Investing in infrastructure and integrated mass public transport services of quality and safety, and promoting rather than restricting teleworking, reduces these costs to workers. It can also increase the possibilities of access to employment, especially formal employment, and productivity, generating a multiplier effect on the economy. 

Discover more about health and safety in our Global HR Law Guide

Authors
Renato Mejía
Partner - Peru
Vinatea y Toyama

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