The roots of violence in the taxi industry are deep and complex. At its heart lie a succession of incapable governments.
The national government is at a loss over how to quell the taxi violence that has left some 100 000 commuters stranded in Cape Town this week. The violence has claimed the lives of 20 people in the past month, and more than 80 in the province since the start of the year.
At the heart of the violence is a very long-standing dispute between two ‘mother bodies’, the Cape Amalgamated Taxi Association (Cata) and the Congress of Democratic Taxi Associations (Codeta), over the infamous B97 route between Bellville and the Paarl township of Mbekweni. This route is responsible for an estimated 90% of all taxi-related murders in the Western Cape.
At the time of writing, the dispute had not been resolved, as negotiations between the warring associations deadlocked. Rebecca Davis provides an excellent breakdown of the issues at play in a recent ‘explainer’ in Daily Maverick.
That this feud has not been settled, after almost a year, is not surprising. To understand why, one needs to consider not only the present conflict, but the origins of the violence which has plagued the industry for most of its history.
Permit confetti
The roots of violence in the taxi industry are deep and complex. Under the Apartheid government, in the late 1980s, the industry was very rapidly deregulated, in what students of the industry have called a ‘permit confetti’.
Against considerable resistance, some National Party officials recognised the industry as a symbol of popular capitalism. This was before the fall of the Soviet Union, and in advance of the anticipated negotiations with the ANC over a new political dispensation for South Africa. Giving the enterprising taxi industry its ‘place in the sun’, as Director General of Transport, Adriaan Eksteen described it in 1983, had propaganda value as a bulwark against communism.
In what appeared to be an ideal libertarian scenario, the Transport Deregulation Act of 1988 saw taxi permits being issued subject only to vehicle road-worthy tests, drivers’ licences, and insurance cover.
What even many free marketeers seem to forget, however, is the important role that the state plays in creating the conditions for free markets to thrive. Free markets do not mean anarchy.
To prevent competitors in a free market from sabotaging each other and resorting to violence over disputes, you need a capable state that is willing and able to protect lives, liberty and property.
This was, back in the 1980s, largely absent in South Africa. It still is.
There was a flood of new entrants into the market. Many new and rival taxi associations were formed. Many operators competed without being association members and were violently dealt with as ‘pirates’.
Deregulation works, but only when competitive rivalry is effectively mediated by good policing and a working justice system.
Mother bodies
A major factor in the continuing violence was the rise of ‘mother bodies’, which were informal groupings of local taxi associations, usually organised on a regional level.
Associations controlled taxi ranks and routes and collected fees for doing so that depended on the profitability of a route. Mother bodies provided protection to associations and taxi operators against competition by rival associations, in return for collecting a share of the revenue.
These protection rackets required hitmen and hit squads, employed by the mother bodies. In 1997, police revealed that hit men were paid R1 000 for killing a taxi passenger, R2 000 for a taxi driver, R4 000 for a taxi owner, and as much as R80 000 for an executive member of a rival mother body.
The entire industry was run like the mafia, which is exactly what you’d expect when the state is not capable of enforcing property rights, mediating contract disputes, or protecting lives.
When the new, democratic government determined to re-regulate the industry in the 1990s, in the hope of stemming its worst excesses, it made another grave mistake.
The very concept of ‘owning routes’ ought to be anathema in a free country. Just like a retailer cannot exclude rival retailers from its turf, so a transport service ought not to be able to exclude rivals from its routes.
The government, however, acknowledged and entrenched these monopoly rights by effectively delegating its permitting powers to the taxi associations. Only operators who were members of specific associations could obtain permits, and those permits explicitly restricted the taxi to association-sanctioned routes.
While government insisted on fair competition in other sectors, in the taxi industry it legalised and protected cartels, and enshrined anti-competitive practices in law.
The re-regulation, instead of quelling the violence, actually made it worse.
Corruption
Another reason for the government’s inability to control the violence was large-scale corruption. Government officials had private stakes in the industry, and police officers were directly implicated in much of the violence, sometimes even being hired as hitmen themselves.
In 1996, then-president Nelson Mandela lashed out at the police, saying, ‘The level of corruption among policemen is so high that government efforts to halt the upsurge of crime and violence are severely undermined. Government has declared war on taxi violence, but instead of helping to eliminate crime and violence a good number of policemen are known to be undermining the effort by associating with the criminals for financial gain.’
Over the years, there have been many attempts at formalising the industry. While they have had limited success, there has also been widespread resistance to formalisation.
Many taxi owners still feel that instead of being appreciated for their efforts and contribution towards working-class mobility, government is out to punish them through formalisation, imposing onerous labour conditions, safety standards and taxation.
Suffice to say there is little trust between the taxi industry and the government. Although the police are now prohibited from taking any interest in the taxi industry, the associations are happy to employ family members of police officers, with the aim of ‘buying’ the police.
Conflicts of interest
The government itself hasn’t learnt anything about conflicts of interest, either. In 2019, it announced the Revised Taxi Recapitalisation Programme, under which it appointed a private company as a ‘technical partner’. This company, Anthus Services 84 (Pty) Ltd, established a trading entity called Taxi Recapitalization SA, which was officially mandated to provide services to the industry, retaining 40% of the commercial benefits.
This included commercial services such as ‘the affordable supply of new taxi vehicles, finance, short-term insurance, spare parts, repairs, fuel, lubricants, electronic fare collection and property management’. The appointment of a government-protected monopoly is pushing countless small enterprises that emerged to service the industry out of the market.
The establishment of government-owned competitors to taxis, like Bus Rapid Transit systems has strained the relationship between the industry and government even further.
The upshot is that associations unjustly, but legally, claim monopolies on routes. The industry is deeply corrupt and operates like a mafia. The government has deep conflicts of interest in its relationship with the industry.
In the looting of last week, we all had a demonstration of the ineffectiveness of our police; they are poorly led, poorly staffed, poorly trained and poorly equipped.
Intractable problem
The impotence of the government to protect property rights, defend lives, and impose peaceful resolutions on commercial disputes in the industry, makes taxi violence an intractable problem.
There is no solution that can be imposed from above. Rival associations need to come to an agreement, and, as we are seeing now, they have little incentive to do so.
The fault lies with the unwillingness or inability of government to police the industry, and a regulatory structure that legitimises monopoly control over routes and ranks, without providing a legitimate means of peaceful conflict resolution.
Although violence does gravely mar the industry, one should never lose sight of the fact that it emerged as a free market solution to a problem created by government in the first place. That problem was to force millions of working-class people out into townships on the urban periphery, far from employment opportunities, and failing to provide adequate public transport to ferry them to and from work, shops and schools. The taxi industry grew to serve a largely poor customer base very efficiently.
The industry is a national treasure and deserves better. Lasting change will have to start with the national government, however. Without effective policing of violent conflict, anti-competitive behaviour, unsafe vehicles, overloading and reckless driving, the violence will not end, and the prospects for reform in the industry are slim.
Only better policing can enable a restructured industry in which operator licensing and control over routes is taken out of the hands of the associations, and peaceful competition can flourish.
(Much of this article is based on South Africa’s Minibus Taxi Industry: Resistance to Formalisation and Innovation, a report I wrote which was published by the Institute for Race Relations on 5 March 2020.)
The views of the writer are not necessarily the views of the Daily Friend or the IRR
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