In a utopia far removed from the South African reality, minibus taxis are the ideal model of entrepreneurship and small-scale financial empowerment.
In that reality, minibus taxis are owned by individual drivers who have either acquired them through years of toil and saving, or through debt provided either by the financial services sector or state agencies. Because they are owner/drivers, they value their assets. They keep their vehicles in pristine condition, drive safely and respect the passenger as a customer. They run registered operations, have bank accounts in which they deposit their takings, are registered for tax and make contributions towards other protections that include workmen’s compensation and unemployment insurance. Those who employ drivers pay them a decent wage, respect labour laws and do not overwork them.
We sadly don’t live in an utopia. We live in a country where the industry is a law unto itself. Taxis are driven recklessly; drivers have no respect for their own passengers, break the rules of the road with impunity and often disputes are settled with violence. The drivers are always grumpy because many put in 12 to 16 hour shifts, for little pay and not enough opportunity to rest. Big men, whose bosses own thousands of vehicles, often operate in the shadows, collecting takings from drivers without regular maintenance of the assets that make them super rich. They hide their cash under the mattress instead of in legal bank accounts where they can be audited and held liable for tax. Feared taxi bosses employ hitmen to silence rivals, instead of settling differences diplomatically by working out ways to amicably share this lucrative pie.
A report caught my eye last week. Responding to a parliamentary question from the DA on the taxi industry’s company tax contributions, finance minister Tito Mboweni revealed that the SA Revenue Service only collected R5m in corporate income taxes from operators. This from a R90bn industry that employs an estimated 300,000 drivers. The taxi industry is important to this country’s economy. Close to 70% of households rely on it as the main mode of transportation. It ferries people to their places of employment, youngsters to school, it carries friends and relatives when they visit each other, the elderly to collect their grant payments, the sick to hospital. A typical South African road is incomplete without a taxi full of passengers making its way from A to B.
Taxi operators have complained to government that while other modes of public transport (buses and trains) are subsidised, their industry does not enjoy this benefit. This is a genuine grievance, and cannot be dismissed lightly. Government should not miss a trick here; the industry’s plea for subsidies is an ideal opportunity to transform it for a greater good. The Taxi Recapitalisation Programme — which basically gives owners a scrapping allowance to dump their old vehicles and buy new ones — has failed. While it has given owners incentives to purchase fairly new vehicles at shorter intervals, it has not managed to fully legalise and professionalise the industry. So while the vehicles improve, old problems still persist: violence, reckless and dangerous driving resulting in accidents, long hours, unsafe working conditions and taxi owners evading taxes.
Government should not miss a trick here; the industry’s plea for subsidies is an ideal opportunity to transform it for a greater good.
Government should sit the industry down and offer subsidies if they are willing to accept certain conditions. Each owner/operator must register a business entity, open a bank account where funds will be transferred, and register to pay tax on profits. Owners must also prove they have registered their drivers for unemployment insurance and workman’s compensation, and are making monthly contributions towards these. They must also make a pledge towards respecting the labour rights of their employees (drivers), creating mechanisms whereby they reduce long hours by employing ad hoc drivers when the main driver is resting.
The industry should also be incentivised, based on respect for the rules of the road and respect for customers. Drivers should be monitored by their owners and law enforcement agencies under the risk that constant law breaking will result in operating permits being cancelled and subsidies lost. Government must also set up a formal dispute resolution chamber for the industry, where independent people will adjudicate on grievances relating to routes and permits. Those who perpetuate violence must be identified, jailed and banned from the industry for life.
Government should also improve taxi ranks, to make them welcoming and safe for commuters and drivers. It must create public transport lanes for use by buses and taxis on major routes. It must also zone safe side-islands on taxi routes, where they can pick up passengers without being a nuisance to other motorists. The industry should also be encouraged to go cashless through innovative products that allow passengers to scan bank cards to make payments for trips. Special paying cards can be created for those without bank accounts. Drivers must undergo regular professional driving training and etiquette courses focusing on better customer experience.
If taxi bosses want to benefit from the taxpayer, they must be prepared to modernise their industry and get out of the shadows.
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