South African metered taxis could get a boost against Uber from proposed new rules

Business Insider SA
  • The Competition Commission wants an overhaul of the metered taxi licencing and fare regime in South Africa, which it thinks will increase competition.
  • Metered taxis argue that Uber's prices are too low and threaten their survival.
  • Between 35% and 55% of Uber drivers are operating without a valid licence.
  • The commission recommends that fare regulations be scrapped, and that all metered taxi companies be allowed to do business wherever they want.
  • For more stories, go to Business Insider SA's home page.  

The Competition Commission has proposed changes to level the playing field and allow metered taxis to better compete with Uber, Bolt, and other ehailing companies.

The commission launched an inquiry in 2017 amid industry concerns about the impact of the meteoric rise of Uber.

Metered taxi operators argue that Uber’s prices are too low, and threaten their survival.

The commission confirmed in a report, released on Wednesday, that Uber is much cheaper than metered taxis – which on shorter routes can cost up to 250% more in Gauteng:

Source: Competition Commission

The metered taxi operators also contend that Uber is operating outside of the regulations that govern them. Government is only current developing laws to specifically regulate  electronic hailing.

See also: A driver without an 'e-hailing' permit could cost Uber R100,000 if Parliament’s transport committee gets its way

The Competition Commission notes that Uber is not governed by labour laws in its relationship with drivers using its platform –and the negative impact this has on those drivers.

Here is how the Competition Commission recommends changing the metered taxi industry, so it can better compete with the likes of Uber.

Removal of area restrictions for metered taxis.

The commission found that metered taxis are subject to area restrictions, while the e-hailing services operate anywhere. For instance, taxi operators may be limited to one municipality, while e-hailing drivers in Gauteng can operate between the Tshwane, Johannesburg, and Ekurhuleni regions.

The commission wants all area restrictions to be lifted, so that once a taxi service is licensed, it can operate anywhere in the country.

But some areas like airports should still have restrictions in place to help deal with congestion, it says.

The department of transport previously argued against the removal of area restrictions, arguing that it was a valuable tool to assist in avoiding conflict in the industry.

No price regulation for metered taxis.

Currently, taxi fares are theoretically regulated in terms of the National Land Transport Act (NLTA). The NLTA also requires metered taxi vehicles to be equipped with a sealed meter to determine the payable fare.

The commission said that this rigid approach prevents taxi operators from responding to supply and demand. It wants that sort of price regulation to be removed from the legislation, which it believes will promote competition and lead to lower fares

A complete overhaul of the taxi-licence regime.

The commission found big backlogs in the approval of operating licences at various provincial regulators for the taxi industry. While SA law requires all licences to be finalised within 60 days, in the City of Johannesburg alone there is a backlog of nearly 7 000 applications (including minibus taxi applications) dating back to 2007.

 “This has led to a significant proportion of e-hailing operators and metered taxi operators operating without valid operating licences, and thus operating illegally,” says the commission.

According to the report, between 35% and 55% of Uber drivers are operating without a valid licence, compared to 70% and 95% for Bolt.

The Commission recommends an overhaul of the issuing of operating licences, including the removal of restrictions on how many taxis may be registered in a specific area.

“This would mean that operators will still be required to apply for roadworthy permits, but their operating licence applications will not be denied based on supply and demand.”

In addition, the Commission recommends that regulators increase their capacity, and finalise pending applications “expeditiously”.

Government should intervene to help create a national taxi body.

The commission wants government to assist the industry to establish a national association of metered taxis.

“Metered taxi associations are empowered to represent the interest of the industry. A formalised structure for metered taxis will assist with consultations with the government and advance their interests in the industry in light of the digitisation of the market.”

Compiled by Helena Wasserman

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