Technology is a solution engine for many sectors, improving, spreading value, risk and opportunity in each iteration. Some call it disruptive, others call it innovative—whereas from a regulatory perspective it is simply an improvement in the signaling, screening and sorting across multiple systems. As such it becomes difficult to observe the potential implications of advances in the availability of information without considering the true nature of early adapters, and vested interests. There are a number of examples in this regard, but focusing on one makes for a shorter read.
In SA, we have discussion documents which turn into bills, and bills turn into acts after public comments, review and eventual approval or rejection. Looking at the National Land Transport Act Amendment Bill, which was at the National Committee of Provinces when this piece was written, the bill improves the existing Act. The Bill is surrounded predominantly by transport operators and local government representation. The amendment of this Act is significantly broad and multi-sectorial, however the manner in which it interacts with electronic hailing (i.e. e-hailing) seems to be the most contentious issue. As a result, for this brief I’ll focus on that.
Submissions ranged from meter taxi operators arguing that the market should be fair, and the bill must be implemented as is. Technology companies arguing that the bill must be amended in such a manner that it enables the competitive advantage inherent in e-hailing solutions. At the same time, both parties long to see safer, more secure, effective and lucrative business in the transport sector. Representation of local government through SALGA made only a comment to purport that it supports the bill with respect to integrated public transport. While the South African Bus Operators Association argued that there are no clear indications related to subsidies, and contract structures. E-hailing seems to dominate the narrative with respect to the bill. The bill almost copies-and-pastes its regulations for metered taxis onto technology enabled mobility services which is an example of the deep lack of evidence based foresight in the South African transport policy making sphere. It also highlights significantly fragmented policy making culture nearly embedded in the country.
The bill almost copies-and-pastes its regulations for metered taxis onto technology enabled mobility services which is an example of the deep lack of evidence based foresight in the South African transport policy making sphere.
Missing the current policy environment
While the Competition Commission Inquiry on Land Based Passenger Transport will only publish its findings and conclusions, this month, they have published a large volume of transcriptions, documents, footage and presentations. In many of these presentations, submissions related specifically to the regulation of land based public passenger transport pointing specifically at the National Land Transport Act as Amended. The speakers also provided practical evidence of how unique each province is, and the various tactics employed by operators, officials and stakeholders to manage ground-level problems unaddressed by the existing policies. In these submissions, electronic hailing, and other technology are a recurring theme—if not an intimated solution hidden behind the lack of information about which technologies are available, capable and adaptable to the market.
Parallel to this, was the emergence of a series of hearings related to the Essentialisation of Public Transport, wherein the CCMA’s select Committee on Essentialisation explored the possibility of essentialising public transport in order to protect the commuting public. One Union, SATAWU opposed this effort on to protect workers’ rights to strike—even if this causes significant costs to commuters. While, through appropriate agreements essentialisation would not mean that striking would be impossible, it only means that the bargaining power of unions would be reduced and some elements of the public transport market would become in many respects professionalised, with labour protection, standardisation and regulation (i.e. similar to what is found in the teaching, nursing and policing sectors). The policy issues addressed by the National Land Transport Amendent Bill seems to neglect these issues because they emerge in conjuction with the inquiry and labour review.
This is all against the backdrop of rapidly emerging technologies which enable employers to manage how their employees commute; or applications that can be used to access non-motorised transport units such as bicycles in bike-sharing schemes.
This is all against the backdrop of rapidly emerging technologies which enable employers to manage how their employees commute; or applications that can be used to access non-motorised transport units such as bicycles in bike-sharing schemes. In the logistics context where micro-cargo movement ranging from fast-food, clothing, and retail to local postal services can be accessed through websites, Commercial Transport Applications (CTAs) and telephonic devices seem to go unobserved.
The NLTA Bill does not genuinely consider the depth related to treating holding areas such as parking bays, micro-cargo loading areas, bus stops, bicycle storage docks and other vehicle holding areas and their relationship with technology for non-motorised, public and private passenger and freight transport. Partly because it seems to assume that technology enabled mobility services will not be translated into the minibus sectors, long-distance transport sectors, and others. Nor does it account for the possibility that such solutions need to be part of contracts (i.e. blockchain applications—it’s already happening actually). The policy seems to discount–if not divert–the treatment and protection of user or subscriber privacy, payment and data uses by local municipalities—which makes the submission from SALGA rather out of sync with the direction of technology tomorrow. The role of telematic industries, road freight corridor, planning, regulation and data sectors seem to be discounted: a salient divorce between the NLTA and freight transport (which is highlighted in the Road Traffic Act)—the lack of a freight logistics strategy does not help.
Worst of all, considering the relationship between Toyota and Uber—which may result in public transport enhanced minibus taxis, long-term integrated maintenance plans and so on. Or Blablacar shock where long distance transport operators in France, Italy, India, and many other countries, where drivers offer seats for people as a they travel between cities (digital-hiking).
This policy seems either out of tune with the contemporary developments or it there is a need to formulate a white paper on regulating the Mobility as a Service market. In fact, many Tambai, Ventures and other micro-taxis offer Mobility-as-a-Service, MaaS type services without the app—just a waiting game or an SMS, if not a scheduled daily or weekly service. In Indian cities, fuel price volatility has opened up a market for mobile applications that enable rapid access to nearest and real time fuel prices. These are not necessarily far out for the South African market.
Case Study: Growing from a data collection application, GoMetroPro has expanded its service scope to various other transportation applications. Potentially an all-in-one firm with the services, systems and technology support underpinning their business model, they stretch far beyond their “live” counterparts. Technology companies, in my view, are only technology companies when they trancend the application and delve into the actual hardware, business and systems infrastructure (as part of their service). I see this in CTrack and Amazon Web Services, alike. What Justin has done, right under everyone’s nose is move away from the information end of the spectrum, which is where one finds WhereIsMyTransport, to the systems-services end of transportation business itself. Both ends are valuable, but only one is fundamentally durable due to the associated fixed costs, contracts and inherent industrial partnerships that keep the ball rolling.
Technology in Africa
Technology in Africa is technology everywhere else in the world, just with much larger multiplier effects than before. I am of the view that one role of technology in Africa is to liberate markets from inefficiencies through well selected, developed and implemented systems. Any marginal improvement in technology from walking to cycling; from USSD to GPS based solutions; to new inventions that improve the average quality of life of a people, entity and or the state.
The day policy teams go in the deep end of the policy making cycle, it will take much longer, but each phase, each output, will certainly inspire a wave of valuable confidence and action.
Regulators must become aware of the fact that inaction may cause deadly misunderstandings between new entrants and incumbent operators. With the embedded multiplier effect, the tensions may become very difficult and surrounded by misinformation. When CTA drivers were on strike recently in SA in July, and November 2018, they argued that the commission absorbed by Uber and Taxify, for instance, must be lowered. On SAFM, one of the main arguments I proposed was that these drivers are more like subscribers to a transport service that distributes contracts than they are employees of the companies. The biggest weakness in the driver-partners’ argument was that they perceive themselves as employees of these CTA’s not subscribers– or contractors. The German approach seems to have been to focus specifically on these mobile applications as meter taxi enhancements– subject to various regulations. In many other countries, metered taxis and other transport operators are building applications similar to the ones we see, they will unfortunately find themselves competing with ordinary people with empty seats and in need of extra money. Regulators need to be prepared for commuter hostages as these strikes may emerge across various sectors due to the operation of these CTAs. This year, drivers are now striking facing the IPO as a massive reward to the executives but not much reward for the drivers. Interesting podcasts on this issue can be heard on the BBC’s World Business Report with and MetroFM Talk.
Caveat: I think the grant distribution tools in SA had an issue with biometric identification, some of the employees felt that it was an additional burden to them and was not part of their training or contract–among many other issues.
The new policy is already out-of-date
No country can afford a reactive policy instrument that is not aligned with public needs or abreast with public-private sector changes, domestically or internationally. At the same time, competitive economies use an analog framework to coordinate a digital world with a clear ambition to improve mobility, access and opportunity for society at large—this does mean everything changes, but the truth remains consistent. Transport is about justice. With better information, good quality screening processes and deeper policy and institutional alignment the long term cracks can be prevented and regulation can mean enabling a fair and effective environment for competition and well-being. Grand statements aside, the parallel lines between transport policies in South Africa is a red-flag for a long season of various policy amendments, constantly trying to keep up. The day policy teams go in the deep end of the policy making cycle, it will take much longer, but each phase, each output, will certainly inspire a wave of valuable confidence and action.
Problem misspecification due to asymmetric information, policy proposals overwhelming the politics and the extent to which the NLTA needs to be amended exceeds the technical competencies of those involved to clearly specify the policy problem and the various environments it occupies. Verdict? The policy as is may be temporarily effective for ride-hailing, but more amendments will be necessary to reflect the sharing economy with respect to Section 66A. What do you think?
Endnote: Overall, the policy has a number of glitches, I am still looking at the responses from the National Department of Transport and will share them once I’m done (03/12/2018).