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Brazil: Does our approach deserve reassessment?

image credit: What's the balance between cost and value?

Brazil: Does our approach deserve reassessment?

A recent example shows how much we lack to reach the level of developed countries.

Renting a car in Brazil requires much more time to pick it up and return it. Bureaucracy is a relevant factor, in addition to the rental companies' ritual to check in detail whether the car was returned by the customer under the same conditions that it was received.

Several photos are taken, inspections are made, checking if the spare tire is in the trunk, and the list goes on!

Bottom line: it took me around 2 hours (pick-up and returning the car).

Recently I rented a car in the United States. I arrived at the airport, went to the rental company's booth, my reservation was immediately confirmed, they indicated the location where my car was available. 

A week later, I arrived at the airport, in the rental company's designated location and when I stopped the car I was promptly told that everything was OK! Nothing else would be necessary. No delay.

What I would like to emphasize is that our system is stupid. The 2 hours of wasted time in Brazil must have a final cost (in people and system) than the American who has a more practical and simple approach.

And more importantly, it costs more to rent a car in Brazil.

Rafael Herzberg's picture

Thank Rafael for the Post!

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Matt Chester's picture
Matt Chester on Feb 19, 2020 5:04 pm GMT

How do you relate this to the utility sector, Rafael-- is there an analogy/parallel here?

Rafael Herzberg's picture
Rafael Herzberg on Feb 19, 2020 6:07 pm GMT

Hi Matt! 

Every other Brazilian transaction is associated with important ineffiicencies. The post brings an easy to understand example in plain and simple words regarding an activity that is simple(car rental).

But since you are heavily involved in the power sector let me give you examples of the same ineffiicencies:

1) The official power clearinghouse is in a default situation in connection with USD 2 Billion. It means that deregulated energy users who are willing to sell excess energy on any given month, have to pay an addition fee to power traders "to sell this amount toanother energy user".  Theoretically the official clearinghouse would not charge this "spread" just the ongoing markte price.

2) Power theft is ahuge number in Brazil. Double digits. Since nothing is done to prevent it it is the wire fee payers that bear the associated extra costs.

3) The demand response program was officialy conceived and "offered" to selected regions of the country. But this was oly "for show" because regulations are such that the DR transactions would have to be cleared at the officialclearing house. But... no one sane would risk using the officialclearing house given the default situation.

And the list goes on and on!

Dr. Amal Khashab's picture
Dr. Amal Khashab on Feb 21, 2020 8:16 pm GMT

A wise says " Do not compare an Apple to Banana"

Rafael Herzberg's picture
Rafael Herzberg on Feb 24, 2020 6:53 pm GMT is so tempting!!!!

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