While millions of commuters are staring at a fare increase in June, taxi operators have welcomed government’s efforts to subsidies their industry, a programme that could see fare hikes being minimised in the future.
Despite progress being made to subsidies the taxi industry, operators have not ruled out the possibility of fare increase coming sooner than June, citing financial pressure brought on by the Covid-19 pandemic.
Yesterday, Competition Commission head Tembinkosi Bonakele released the final recommendations of the 2020 Public Transport Market Inquiry report in which he pleaded with the state to fast-track the subsidisation of the taxi industry and smaller interprovincial buses and transform the country’s public transport system.
Bonakele said the taxi industry was getting a raw deal from the government despite 66.5% of households in the country using them.
He said government needed a clear and long-term plan to look into the subsidisation of taxis, an industry worth between R60bn and R90bn that employs over 500,000 people.
This while Gautrain and Metrorail, which serve only 9.9% of SA’s commuters combined, enjoy a bigger share of government support and subsidies.
“The top concern from the taxi industry is that subsidies skew competition in favour of the subsidised services as well as route allocation challenges which fuel violence,” he said.
He also charged that regulatory processes needed to be reviewed, including the issuing of taxi operational licenses which take up to 18 months when, by law, it should be 60 days.
Last year, transport minister Fikile Mbalula organised a National Taxi Lekgotla where the formalisation and subsidisation of the taxi industry was discussed.
South African National Taxi Council spokesperson Thabisho Molelekwa said
a committee compromising taxi operators and officials from the department of transport had been formed to look into subsidisation.
"We are positive on the commitment shown by the minister (Mbalula). In the 20 years that we have been talking about the taxi subsidisation this is the first time where a minister expresses willingness to subsidies us and also has attached time-frames which are in the current financial year (2021-2022)," he said.
Molelekwa said the capacity restriction imposed under the hard lockdown last year had a big financial impact.
“The leadership is even considering moving the price hike forward but no final decision has been made. Our end-game with subsidisation is to also provide cushion to commuters who are also impacted by fuel hikes.”
However, National Taxi Alliance spokesperson Theo Malele said taxi subsidisation was a pipe-dream. The alliance did not participate in the lekgotla.
“When we approached the government for the Relief Fund for Covid-19, they started changing the focus of the conversation to include the formalisation of the industry. That bogus lekgotla was also about confusing us even though the relief fund was more urgent to us because of the impact of Covid,” said Malele.
Bonakele said subsidisation should address fragmented subsidies in the public transport sector to improve coordination and correct the skewed distribution of subsidies between urban and rural areas. There should be equitable allocation of subsidies to the taxi industry and rural bus operators.
He also blasted the Passenger Rail Agency of South Africa (Prasa) for allowing Autopax to bully smaller interprovincial bus operators with the perks and bailout it gets from Prasa. Autopax owns Translux and City-To-City coaches.
Bonakele said according to submissions received in 2017, Autopax enjoyed using bus terminals for free while other smaller operators were expected to pay.
He said the metered taxi industry was disadvantaged against e-hailing service and the two operators needed to form associations that would give them an equal voice.
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