The South African National Taxi Council (Santaco) and the National Taxi Alliance (NTA) decided this week to ignore the Covid-19 transport regulations. As of yesterday morning, according to media reports, both organisations told their members that they didn’t have to comply with the regulations. This followed a similar decision by the provincial KZN Santaco structure.
The national taxi industry bodies have raised a range of issues which help illuminate why going into lockdown was a bad idea in the first place.
Fikile Mbalula postpones meetings
The taxi associations claim that while they were willing to compromise with the government through negotiation, this was made impossible because transport minister Fikile Mbalula kept postponing meetings. They could be lying, of course, but the taxi industry did compromise with the government during the early stages of the lockdown when they backed down from their demand to be allowed to use 100% of their loading capacity.
In order for there to be a negotiation, the other party has to be willing to sit down and talk; any refusal to negotiate only increases the likelihood of disagreement turning into violent conflict. The taxi industry is a crucial part of South Africa’s economy and the government has to walk the fine line of treating the industry fairly, without giving in to the urge to grant it special privileges. The government also has to consider the contribution, if any, of transport and other economic policies in the recurring violence within the taxi industry.
In their 1986 classic, South Africa: The Solution, Leon Louw and Frances Kendall point out that government involvement in industry causes conflict in and of itself. They use the fictional examples of the Trouser Control Board and the Trouser Development Corporation to show how putting the production of something as innocuous as trousers under government control would soon become a source of political conflict.
Government intervention through subsidies also creates conflict, and it is critical that the government avoids putting itself in the position where it causes such economic harm as to make itself liable for making up large losses through subsidies, as has happened with Covid-19.
Relief fund
This is the major source of conflict and it directly influences all the other complaints. Taxi owners, as represented by their associations, are not happy with the size of the proposed Covid-19 relief grant to the industry. The R1.1 billion grant amounts at most to R8462.54 per taxi, assuming that there are at least 130 000 taxis on the road.
It is highly unlikely that this would be enough to cover the losses the industry has suffered because of the Covid-19 regulations.
Loading capacity
The reduced loading capacity due to Covid-19 has been a persistent complaint from the industry since the lockdown began. The taxi industry derives a large share of its revenue from passengers in urban environments. The passenger market has been reduced by the business shutdowns, the limitations on personal movement, personal risk reduction by individuals and the government mandate that taxis carry only 70% of their capacity, (revised upwards from an initial 50% after protests by the industry).
In an environment – largely caused by the government itself – where taxi owners are being squeezed from all sides, the loading restrictions are making a bad situation even worse. This particular regulation affects taxis more than operators such as Uber or Bolt (which rely on certain high-demand days of the month to make most of their money), because the taxi rank model depends on filling the vehicle to capacity and charging low prices. It is how the industry is able to transport most of the country’s commuters.
The government is in the process of killing the taxi industry, and the decision by Santaco and the NTA to start loading at full capacity is a sign of desperation. Adding one more nail to the coffin is the restriction on inter-provincial travel, with passengers requiring permits, which the driver must check.
Inter-provincial / Long-distance travel
Both national taxi associations have indicated they will no longer be complying with the requirement to ask if passengers have a valid permit. It is my opinion, based on some experience, that this particular regulation was not being widely followed. It is nonsensical anyway; the reason for travelling does not matter, the important thing is to reduce risk while a passenger is in the taxi.
The regulation that seems, anecdotally at least, to have been most widely complied with is the limitation on loading capacity, especially on long-distance trips. Limiting numbers is a more sensible measure, but not if the cost is that everyone involved in the taxi industry becomes poorer. This runs the risk of reducing asset ownership among black people in particular. It would be ironic for a government implementing BEE to be simultaneously implementing regulations that make it more likely that black taxi entrepreneurs fail.
Taxi fares
The current crisis is made up of multiple underlying issues, due largely if not solely, to government interference in the economy. The spark for the current crisis, however, is the spike in taxi fares reported a few weeks ago when some taxi associations announced increases exceeding 100%. Among these were the Alexandra Taxi Association (Ata) and the Alexandra, Randburg, Midrand, Sandton Taxi Association (Armsta).
The government’s interference in the economy, regardless of intent, has created a situation where South Africans are losing their livelihoods. The government, supposedly in response to a virus, created an extreme set of economic circumstances. While the costs of intervention have to be borne by the government, the problem is that it relies on the very same people to produce enough money to allow for this intervention.
Now, with debt rising rapidly as a percentage of GDP, the government has just made everyone poorer while promising to compensate all of us ‘later’. The time to pay up has come, and the realities of government finances, which were apparent before Covid-19, have been brought into even sharper focus.
Perhaps, after all, we will learn the lesson that government promises mean very little without the hard work and productivity of South Africans.
[Picture: Mike Gerhardt, https://commons.wikimedia.org/w/index.php?curid=2052711]
The views of the writer are not necessarily the views of the Daily Friend or the IRR
If you like what you have just read, subscribe to the Daily Friend