# **7. Policy implications**

Analysis conducted as part of this study reveals that adoption of e-commerce could replace up to 9.1 percent of the trips made on weekdays in Bogota and between 7 percent and 12 percent of trips on weekdays in Buenos Aires. This corresponds to all trips for shopping purposes that are round trips and half of the trips for shopping purposes that are part of travel chains.

The reduction potential is greatest in the morning (though after peak hour), late afternoon, for short distance trips (< 10 minutes), and for trips made by non-motorized modes. The reduction potential among private vehicle trips is lower than among total trips, at 5.6 percent in Bogota and 8 percent in Buenos Aires. More than half of the trips by private vehicles for shopping purposes are part of travel chains, limiting their reduction potential. This implies that e-commerce has limits as a tool for reducing private vehicle use and externalities such as congestion during peak hours, given the concentration of shopping trips outside peak hours.

There is no evidence that the growth of e-commerce is having a significant substitution effect on shopping trips in either Bogota or Buenos Aires. Although the demand for trips to shopping areas in Bogota during 2019-2021 decreased more than to other areas of the city, the analysis by demand segments suggests that this was not due to the growth of e-commerce but that other phenomena (fall in employment in shopping areas, fall in consumption, etc.) are more explanatory of this evolution. Moreover, trips to shopping areas decreased less among the socioeconomic strata that are higher adopters of e-commerce. In Buenos Aires, the demand for trips to shopping areas decreased more than to other areas of the city in 2020, suggesting a certain substitution effect, but this trend reversed in 2021, suggesting that the steeper drop in 2020 was strongly influenced by the enforcement of mobility restrictions. Moreover, consumer surveys by CACE indicate that among online shoppers there was an _increase_ in visits to physical stores.<sup>6</sup> In other words, e-commerce currently generates more traffic than it avoids, as a consequence of an increased number of freight vehicle trips and a very limited substitution effect on the demand for private vehicle trips. This means that for short- and medium-term sustainable mobility strategies (e.g., mobility master plans), e-commerce is an additional challenge to manage and not a significant opportunity that can help solve mobility problems.

Despite the limitations of e-commerce as an effective tool in reducing congestion, it opens up another set of opportunities for mobility planners. If urban distribution fleets are electrified faster than the private passenger vehicle fleet, e-commerce can be effective at reducing emissions from the transport sector in a future scenario of mass adoption. In this scenario, any substitution effect would have a positive impact on emissions reduction by replacing some private vehicle trips with electric freight vehicle trips. The impact of e-commerce on road accidents and the cost of road maintenance (elements highlighted by the Bogota Mobility Master Plan as impacts of urban freight distribution) will be more complex to address, as it depends solely on the optimization of distribution chains and routes to avoid a disproportionate increase in freight vehicle kilometers traveled as a result of the growth of e-commerce. This optimization can also contribute to reducing emissions without waiting for a complete electrification of distribution fleets.

The associated recommendations for policy are as follows:

- **_Establish close relationships with e-commerce stakeholders_** . In a context of limited legal capacity to prescribe data sharing by the private sector, transport authorities should invest more resources in establishing close relationships with local players in the e-commerce sector. This may lead to a greater willingness to share information and data on e-commerce demand and its implications for mobility (RojasHuerfano et al. 2018).

> 6 The rate of returns of goods in the City of Buenos Aires is around 3 percent (Abad et al. 2022), which generates further need for physical interaction and travel.

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