Failure to structure an appropriate sequence of efforts in relief and ‘formalisation’ sent commuters into an unbearable freefall—equally unprotected and largely without options. The failure, continuously repeats the same cycle.
Once upon a time, the taxi industry struck. For the first time in years, there were no hoots or boosted sounds rumbling past the misty morning windows in neighbourhoods. Johannesburg’s early hours were not haunted by lone echoes of taxis making their first trip, bouncing through its centre in search for the nearest exit. Instead commutes queued in the blistering cold, waited without refuge as the dominant form of public transport in South Africa came to a standstill. How did we arrive at that point, and was there a way out?
Sequence of events
In recent weeks, the taxi industry was the primary mode of transport for much of the national wide lockdown. While some commuters have the option to walk, cycle or drive, many relied on the minibus taxis for their daily commute and general activities.
The industry was mandated to carry only 70% of its vehicle capacity, with fewer passengers due to the lockdown, this capacity limit influences the number vehicles that operate on a route, and the total income generated. Operating costs, for those who did operate would remain constant throughout the routes in question. Subsectors like scholar transport operators and inter-provincial or long-distance operators had no income for most of the lockdown period due to the closure of schools and restrictions on regional travel, respectively.
Banners, microphones, crowds and statements coincided as policy statements of relief were articulated in the form of payment holidays, and a taxi relief fund. The vehicle repayment holidays ranged from ‘deferred payments on agreed terms’ which in practice extend the payment period, and size of the debt. Another form of repayment relief is in the form of a reduction in the payment terms, such that the payment period is effectively reduced by the number of months required for relief (2000 taxis of one financier are receiving nearly R450m in relief as a result of this). A result of this is a lower level of debt, and no vehicle repayments during this period. There were no regulations associated with the form of financial relief for vehicles that are still in the hands of financial institutions—creating a bubble of questions filled with whether the efforts are genuine or not.
As the taxi relief fund discourse floated about, the South African Taxi Council (SANTACO) had begun considering establishing its own fund amidst its engagements with the National Department of Transport. This fund initially aimed to raise R 3.5bn which would require contributions and donations from stakeholders and external parties. All the while, the DOT had also articulated a similar sentiment: a State-sponsored support for the industry. When taxi fare hikes emerged in the public discourse, it was easier to tie them to a strong-arm for a statement about relief, than to explore the diminishing returns of providing services below capacity. The evolution from an independent fund to the sole focus on a State-sponsored fund produced an ex-gratia payment: somewhat an oxymoron at first glance because of the conditions attached. However, viewed in more detail the policy discourse is much deeper than the money on the table.
How is the taxi industry regulated?
A popular policy point is that the minibus taxi industry is not regulated or it is informal. If this was the case, then there would be no point in differentiating between legal and illegal taxis. In order to obtain an operating licence, which is a permit to operate a specific route, an owner must comply with regulations such as:
- A verified tax clearance,
- A statement that they will comply with labour laws (sector specific determinations),
- A road worthy certificate, and
- Proof of insurance.
There are other requirements of course. Provincial Regulatory Entities are responsible for the issuance of these operating licences, while Taxi Associations serve as administrative representations of the needs and conditions in the market. Which is why it is unlikely that the one could start operating a taxi tomorrow morning, which is not the same situation for ride-hailing services. Furthermore, Integrated Transport Plans, are developed for all municipalities and they provide estimates of the number of operating licences that should be issued for specific routes in order to serve commuter needs without negatively impacting operators’ incomes.
In another article, I argue that the industry’s operations during lockdown legitimise its essential characteristics, and expose the need for professionalisation. However, the integrated nature of a concerted approach comes from both the industry and the state– not one without the other.
Conditions for the relief are barely new
In the DOT’s statement dated 19 June, places their argument upon the notion that there are 137 000 legal taxis operating in the market, and 113 000 illegal taxis. The ministry further presented a R1.135bn support to the industry, and acknowledged the ‘vehement opposition’ to the conditions set. The language in the statement purports that the conditions attached to the support are efforts to ‘formalise’ the industry. In practice, the difference between requirements for having an operating licence and the conditions set for the ex-gratia support is that business registration and a business bank account should be set-up.
The remaining conditions are already part and parcel of the industry’s regulation, but not enforcement. One of the primary causes of the lack of compliance is potentially as a result of a lack of sufficient administration, enforcement and coordination in the process of allocating operating licences with respect to accurate integrated transport plans. Sector specific determinations for labour in transport industries may need extensions to the minibus taxi industry, but as noted earlier, compliance with labour laws as a prerequisite for an operating licence. The question is whether municipal officials, and associations have been consistently observant and if they have authority to facilitate compliance. Therefore the conditions set are by-and-large aimed at uprooting illegal operators, and as the ministry alluded to ‘preventing public officials from double-dipping’ in the official roles and the transport industry.
Failure to structure an appropriate sequence of efforts in relief and ‘formalisation’ sent commuters into an unbearable freefall—equally unprotected and largely without options. Given that regulations already exist, associations, provinces and municipalities have their roles prescribed. The lack of implementation on the part of some spheres of government and a lack of compliance among some in the taxi industry creates a misleading façade. A hidden cause for fragmentation in the policy choices made, and public actions taken. Both the DOT and the Gauteng taxi structures are aware of the costs of such action, neither may be willing to confront the cause.
A stranded strike
The public statements about the relief, subsidy, and ‘formalisation’ remain detached from a tangible position paper, plan or strategy from the perspective of the DOT.
The #TaxiStrike or #TaxiShutDown is a spinning coin, dizzying limbo for everyone involved and affected—and it doesn’t end. Describing how it could have been avoided is one thing, instead, consider the possibility that the legacy of neglect is finding expression on every occasion.
The DOT appealed for calm, promising an inclusive public transport subsidy, and imploring with the industry to consider the plight of commuters. With the plight of operators in mind, the debate was focused on the value of support from the State, but little is known about the independent fund mentioned earlier.
Meanwhile, as long queues, congested buses, and road blocks do not pause COVID-19’s spread, the lack of a multimodal transport economy is exposed in the same breath as the importance of the taxi industry.
The most recent regulations advocate for a 100% fill rate, and if my working research is anything to go by, there are a number of problematic elements regarding this approach. Particularly without any instrumental interventions to assess the impact of such a decision, there is little to no room for genuine intervention. Instead, such a position appears to appeal to the politics of economics, rather than the economics of saving lives.
The public statements about the relief, subsidy, and ‘formalisation’ remain detached from a tangible position paper, plan or strategy from the perspective of the DOT. Something that informs the decisions, and directions, in addition to outlining where they seek clarity from the industry.
While SANTACO might need to describe their strategic direction beyond COVID-19, and carve a path forward as the industry’s representatives. Neither of these words will feed operators, or protect transport commuters from COVID-19 now, but they could bring both stakeholders back to the table and meet half-way.
At some point the coin drops, and we could either find ourselves ahead or stuck in the tailwind of our past.
Thank you for reading this article.