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30918151741805Group #58Minibus Taxi Industry
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TABLE OF CONTENTS
Definition of key terms
CommutersAccording the oxford dictionary, a person who travels some distance to work on a regular basis.

IOAIn On Africa
SABTASouth African Black Taxi Association
SANTACOSouth African National Taxi Council
SARSSouth African Revenue Services

ARGUMENT STATEMENT: The Government should consider the regulation within the minibus taxi industry to be centralised
Introduction
The minibus taxi industry is a major key player in the South African public transport
system. Many black South African commuters depend on minibuses to travel to work
and other locations because of its flexibility. Although minibuses are very convenient and accessible to commuters, it has become a notorious industry in the eyes of the public in general, media and commuters themselves. It is no secret that there are many problems in the taxi industry, many of which are on record.
People may argue that the minibus taxi industry plays a critical role in the public transport arena, it is evident that it has tendency to be law in itself by their actions of continuing to close roads, even highways, at any given time, reckless driving which causes unnecessary accidents and fatalities and disrespect of their commuters who are their clients. Therefore, we have compiled this report with the aim of proving that a centralised taxi minibus industry will improve the industry and the country as a whole.
The intended audience for this report is any South African citizen, in particular, the department of transport, commuters, taxi drivers as well as taxi owners and researchers interested in this topic. The report will cover the regulatory issues, collective bargaining and the customer care of the taxi industry. This report does not include information of metre taxis, ubers and shuttle services.
Defining the concept of a centralised taxi industry
The term centralisation, according to the oxford dictionary, means the concentration of control of an activity organisation under a single authority. The IOA on the 6th of May 2013, described the minibus taxi industry as a servant for urban poor. The taxi industry is the most affordable and most available form of transport in South Africa. It is against this background that we are putting forward an argument that it should be centralised for its sustainability.
Factual background
In 1983 the only recognised taxi association was SABTA (South African Black Taxi Association). SABTA was formed during the struggle and resulted from the Welgemoed Commission stating that taxis must not pick up or drop off commuters within a certain radius of a bus stop. This gave buses an advantage over minibuses in terms of making money. Thus, as a result of unfair legislation the first formal black taxi association in the minibus taxi industry was formed and later resulted in the formation of other taxi associations.
In the late 1970’s, legislation was against the minibus taxi industry as it was taking business away from the buses. SABTA struggled to purchase minibuses as they could not get a hire purchase contract as the taxi industry was not seen as a business. Police and traffic officers would get leases and buy many minibuses and give them to people in the township to operate on behalf of them. Later, legislation implied a bus to be a vehicle carrying more than nine people (including the driver). Dr Susan E Woolf and Prof Johan W Joubert state that this created a loophole in legislation and resulted in the legal use of minibus vehicles. Earlier, the Motor Carrier Transportation Act of 1930 prohibited the transportation of commuters by road without a permit. SABTA then applied for taxi permits for areas where commuters needed routes.
Currently, the ministry of transport recognizes SANTACO as a national spokesperson for the taxi industry and its own sub structures. On the other hand, taxi owners do not recognise SANTACO and they have their own associations. This leaves the whole taxi industry decentralised and unregulated.
Regulatory issues
To regulate, as defined by oxford dictionary, is to control or maintain something especially a business activity by means of rules and regulations. The minibus taxi industry displays many unique features some are lack of labour law enforcement and no basic conditions of Employment Act of 1997. The minibus taxi industry is in essence deregulated. Government bodies such as SARS find it difficult to collect taxes.
The minibus taxi industry should be regulated so that the issuing of taxi permits is controlled. The department of transport will be able to know the exact number of taxi permits issued compared to the routes available. It will also assist in the issuing of further permits needed. This will minimise if not totally eradicate the many killings and violence of innocent South African citizens. Recently, eleven people were killed when a minibus taxi was set upon with automatic rifles in an ambush in central KZN on 22nd July 2018 (Times live 2018). This is just one of many horrible killings and there are many more untold stories that result from taxi fights due to a decentralised minibus taxi industry. The CSIR Manager for Transport Systems and Operations, Dr Mathetha Mokonyama, says there are projects that will be completed within the next 10 months, that will address issues of routes mapping of minibus taxi routes in Gauteng – which is a good start and we fully support it (CSIR 2018).

During the SABTA era, minibus taxis were more visible as they were identified by “checker band” which was a model copied from the USA. Commuters were able to identify a registered minibus taxi and therefore not running the risk of the danger of boarding any other vehicle and getting exposed to rape, kidnapping, human trafficking and any other crime. A discussion held with a former minibus taxi owner revealed that both the owners and drivers of minibus taxis were held accountable. The owners had to make sure that the minibus taxi had a valid taxi permit as well as a road worthy certificate, which was renewable annually. The taxi drivers had to have a valid driver’s licence and a public service passenger permit or they ran the risk of being deregistered if they drove recklessly.
The industry would be more efficiently governed if the Department of Transport created an electronic and manual system database containing all the unique operating licence serial numbers with relevant information pertaining to items such as the Operating Licence, Date of Issue, Owner and Driver Details at Date of Issue, Vehicle Registration Numbers, Vehicle Purchase Dates, Repairs and Service History and, Attempts at Duplicating the Operating Licence.
It must be mandatory that Taxi Associations’ Documents coincide with the submitted documents at the Department of Transport.
This database would be integrated with systems belonging to the Traffic Department, the South African Police Service and Financial institutions providing finance to Taxi Owners. Any transgressions would result in solid fraud and corruption charges. It would be easier to pull illegally operating taxis off the road and block new illegal entrants, as the current situation is present as follows:
The Taxi industry’s minimum entry requirements currently under the decentralized system are the legal acquisition and possession of an Operating Licence, a Professional Driver’s Permit (PDP) and membership at a local taxi association. The general rule of thumb: One Operating Licence Per Taxi.
This indicates, at the time, entry into the industry would have been fairly easy, in theory. However, in 2007, the Department of Transport issued a prohibition stating that no new permits would be issued due to the taxi industry being over-congested with active participants. This made it exponentially difficult to obtain an operating license/taxi permit, which, sequentially, increased the difficulty of entry into the taxi industry.
However, this created a greater problem than the initial problem of over-subscription in the industry, namely being, the illegal purchase/transferring of taxi permits/operating licences. The creation and sale of taxi permits does not block entry into the market but rather creates a new illegal market. With the taxi industry heavily decentralized and Department of Transport not having the above-mentioned database to check the operating licence validity amongst the industry effectively, this meant the market was uncontrollable and extremely lucrative.

Furthermore, Financial Institutions approving taxi owner loans for the acquisition of new fleets, inherited a new responsibility of ensuring operating licences are valid before loan approvals. Therefore this meant that, Financial Institutions would be the last-line of defence against illegal entry and expansion in the taxi-industry. It is not part of a financial institution’s ordinary course of business.
However, it seems that the general consensus amongst people in the industry is that Financial Institutions ignore this responsibility, and continue approving loans as it means more business. However, this, in the long-term will lead to taxi owners being unable to meet monthly bank repayments due to increasing over-subscription and new market entrants. This will therefore, negatively affect these Financial Institutions. (Masuku, Sne. 2017. Taxis’ Fake Permit Scheme. www.iol.co.za, Date Accessed 17 August 2018)
This database would better alert the Department of Transport as to which routes are assigned to certain Taxi Associations as a main cause of war in this overly-congested industry is seen to be route-allocation. Government is said to allocate routes to new participants, which have already been allocated to existing participants. Being aware of route-allocations will allow the Government to minimize violence caused over route-allocations thus sparing driver and passenger lives in South Africa.

Others may argue that the minibus taxi industry is a black taxi market as it is owned by black people for black people and if it is over regulated many people would be out of business or risk not being able to join the business. If taxis are not available commuters will struggle to get to work on time. Our intention is not to remove the minibus taxi industry we are simply stating that it should be properly regulated in order to be subsidized by the government and for the safety of not only the commuters but the drivers as well.

Looking at the current budget deficit South Africa currently faces, South Africa may not have the time, money and infrastructure to create, implement and maintain this database effectively without error, waste and/or corruption. Thus defeating the main purpose of the inception of decentralization.

Corruption already exists currently in the form of traffic officers accepting bribes in order to let trespassing taxi drivers by without consequence. It can be argued that as soon the database system is implemented, those who have access to it will illegally manipulated it in such a way that lets taxi driver’s off due to being bribed.

This will be too much administration on the part of government to organize and clear. The process will take too long to implement which therefore faces a potential of abandonment and waste in gathered funds for the implementation and operation of the database.

However, one must recognize the benefits that will encompass the industry post-implementation.

Collective Bargaining
The term collective bargaining, as defined by the oxford dictionary, is the negotiation of employment by an organised body of employees. The term bargaining, as defined by the oxford dictionary, is to negotiate the terms and conditions of a transaction. In this report, we will not be restricted to the bargaining between employer and employees but we will discuss the importance of collective bargaining as described in the definition of bargaining.
As described in the regulatory issues above, the minibus taxi industry has a lack of labour law enforcement and no basic conditions of Employment Act of 1997 and therefore the industry does not have standardised remuneration scale. Some taxi drivers are paid as determined by their owners and other demand a certain percentage on what they have collected – meaning they work on a commission basis and this causes instability in the industry.
During SABTA times, minibus taxi owners had an opportunity of collective bargaining and could purchase many things. It should be noted that taxi owners were not registered as SMME’s and many could not get a loan or buy minibuses on hire purchase. SABTA was able to negotiate with Westbank and motor industries eg Toyota SA, Nissan SA and Volkswagen SA to be able to purchase a minibus through a minimum deposit of 10% or 20% (Chicago Tribune, 1987). This led to the opening of Future bank which was mainly for SABTA members. The minibus taxi industry could negotiate with other entities like Goodyear for tyres and Uni-parts for cheaper prices (Chicago Tribune, 1987). The industry being centralised at that point in time enabled the taxi owners to share good practices across the country as SABTA had representatives in all the provinces and local structures too.

An article on Ap news 1988, is an indication of the what a minibus taxi industry can in a not decentralised environment as it states, SABTA was a cooperative with 45 000 since its formation in 1979, SABTA had an annual budget of R60 million ($30 million), it ran 16 gas and serviced stations for its members and arranged discounts on parts and repairs. The organisation had also persuaded the Toyota, Nissan and Automotive plans in South Africa to modify their vans to better accommodate the need of taxi drivers. Successful black taxi drivers in urban areas earned as much as R1000 ($500) a month making them the highest-earning black group in the country, said Godfrey Ntlatleng, the association vice president.
Having an acceptable level of centralization would put the industry’s employees on a platform of protection and bargaining, as there is little bargaining and rights offered to employees in this industry in terms of wages and taxi operation costs.

Taxi driver’s in the taxi industry work on average fourteen hours a day and queue marshals have no measureable average of hours worked as they knock-off when all activity has ceased, which is usually late in the day. Taxi drivers are responsible for any damages or repairs to the taxi during the time of operation. Most taxi drivers do not receive basic wages but instead earn daily income based on the amount of income derived from the daily trips made. They are also liable for all traffic fines incurred be it related to missing fire-extinguishers or invalid documentation.
Furthermore, it is said that taxi owners commonly frown upon trade unions, as most are of the view that trade union membership will cost them a certain level of competitive advantage in the form of an increase in operational costs in the long-term compared to their fellow non-member counterparts who do not recognize trade unions and are not members/apart of them
Due to a lack in collective bargaining, drivers operate under stressful and abnormal work conditions in order to stay and satisfy the prevalent stakeholders in the industry. This includes engaging in risking activities such as speeding and operating un-roadworthy taxis in the city. (Barret, J., InFocus Programme on Boosting Employment through Small Enterprise Development, Job Creation and Enterprise Department and International Labour Office and South Asia Multidisciplinary Advisory Team. 2003)
The opposition might argue that if we regulate the minibus taxi industry under the basic conditions of employment act 1997 then the hours a taxi driver must work are restricted as taxis operate from morning till late in the evening. They might also argue that working on commission is preferred by taxi drivers because in some cases they make more money than if they had to work on a wage basis. However, it is not ethical, it is unhealthy and it is a health hazard. for any human to work such long hours without rest. Working on a commission can be a disadvantage to the taxi owner and commuters because taxi drivers end up overloading and the car gets strained from the endless trips. This is the cause of many accidents and road rage.
Furthermore, it may be argued that there is a lack of incentive for taxi owners to join trade unions and collectively bargain with employees as this will in turn, inevitably, lead to an increase in business operation costs and cut into their profits. Wages may be implemented; membership fees may be mandatory and hike at a certain point in time where the collective bargaining framework becomes sophisticated and legislatively binding in South Africa.
The current system in place in South Africa is already operating functionally, excusing the parts of violence and conflict. The current consensus regarding taxi drivers taking responsibility for costs, repairs and fuel has been widely accepted and continues to be accepted today.

It may be argued that those who complain about the working conditions within the industry were not meant to be in it or were not cut out to operate in it, as they do not have the skill set to match the required operational competitive advantage.

The industry is functional and is a vital part of the poor’s everyday lives. Centralizing it to allow collective bargaining may negatively affect them through a hike in taxi prices once centralization has been completed in the form of taxi owners trying to recoup the decrease in profits, attributed to increased costs due to centralization, from the passengers themselves.

Customer Care
Customer care, as defined by Collins dictionary, is the work of looking after customers and ensuring their satisfaction with one’s business and its goods or services. In this day and age customers are aware of their right to a high standard of customer care. The minibus taxi industry should be no different in treating their customers (commuters) with respect and ensuring their satisfaction of the service they are provided with.
This decentralised minibus taxi industry is notorious for not treating their commuters with the necessary care and diligence. Taxi drivers are known for overloading, treating commuters with disrespect when the commuters complain about the overloading or any other issue, they are known for driving recklessly, not respecting road signs any other drivers on the road and at times there are minibus taxis that are not clean and hygienic and the taxi drivers themselves not looking presentable.
During SABTA days, SABTA would host an annual conference (AGM) and some of the things they were enhancing are safety and talent. SABTA together with the department of transport would host a safety competition specifically for taxi driver. In this competition they would train taxi drivers on issues of safety from a local level and at a national level the winner would win a minibus donated by Nissan South Africa. In the process many taxi drivers would have been exposed to training from the department of road safety. The talent enhancement was done through the Shell Road to fame which was sponsored by Shell SA, and the winner would be announced at the SABTA conference. Winners such as Rebecca Molope would then record songs and in between her songs, department of safety and SABTA would record messages of safety and customer care, respectively. The messages would also be encouraging the dress code of the driver and how to keep the vehicles clean. As a result of taxi drivers being forced to play these cassettes, commuters would be aware of their rights and also knew where to report any misunderstanding or issue. It is evident that this method of conducting the minibus taxi industry was working as there were very little incidents of unethical taxi behaviour.

The opposition might argue that is impossible to make taxi drivers play a certain type of music as the taxi owner will not be able to monitor the taxi driver is playing this music they might even say it is wishful thinking. However, it should be noted that the method used is not forced upon the taxi driver but it is a process. The method did not start with the taxi drivers being given the cassettes to play in the minibuses, it started with training which had a prize in the end, while getting developed in the processs. Therefore we believe if this method can be given an opportunity, positive results will realized.

Conclusion:
It has been established throughout the report that the main arguments underlying South African taxi industry centralization would be:
The trade-off involved in keeping the current decentralized system versus running the risk of having the industry being over-regulated.

The benefit of taxi industry centralization versus its technical and practical feasibility in terms of implementation and upkeep.

The impact of introducing legal collective bargaining to address wages and working conditions in the industry versus its implication on the taxi owner’s operation management and his/her bottom-line.

The impact of SABTA control measures versus the treatment of passengers and other road users.

This report is of the view that history has proven when the industry is centralized; processes and policies are put into place that result in many beneficial results. These include commuters being safe, respected and fulfilled. Therefore one may argue that more people would use commute via mini-bus taxis as centralization would have established the taxi industry as a recognized and respected business sector.
Taxi drivers would have regulated wages and would stand the chance of receiving employee benefits other professionals in other governed industries receive such as medical aid and pension fund benefits. Other users of the road would no longer feel threatened by taxi drivers leading to a mitigation of taxi wars and road rage.

Reference List:
News24. 2018. Things to consider before starting a taxi business | News24 . ONLINE Available at: https://www.news24.com/Archives/City-Press/Things-to-consider-before-starting-a-taxi-business-20150429. Accessed 17 August 2018.

Organizing in the informal economy : a case study of the minibus taxi industry in South Africa . 2018. Organizing in the informal economy : a case study of the minibus taxi industry in South Africa . ONLINE Available at: https://www.ilo.org/empent/Publications/WCMS_117698/lang–en/index.htm. Accessed 17 August 2018.

SANTACO History | SANTACO. 2018. SANTACO History | SANTACO. ONLINE Available at: http://www.santaco.co.za/santaco-history/. Accessed 17 August 2018.

Simnikiwe Hlatshaneni and Chisom Jenniffer Okoye. 2018. Route allocations play a big role in taxi killings – Santaco – The Citizen. ONLINE Available at: https://citizen.co.za/news/south-africa/1985609/route-allocations-play-a-big-role-in-taxi-killings-santaco/. Accessed 18 August 2018.

Taxis’ fake permit scheme | Daily News. 2018. Taxis’ fake permit scheme | Daily News. ONLINE Available at: https://www.iol.co.za/dailynews/taxis-fake-permit-scheme-10382879. Accessed 17 August 2018.

Western Cape Government. 2018. Applying for a public operating licence | Western Cape Government. ONLINE Available at: https://www.westerncape.gov.za/service/applying-public-operating-licence. Accessed 17 August 2018.

What we do – TETA . 2018. What we do – TETA . ONLINE Available at: http://www.teta.org.za/inner.aspx?section=2&page=15. Accessed 17 August 2018.