The Portfolio Committee on Transport held a second meeting to obtain public opinion and input on the National Land Transport Amendment Bill. The three organisations that made their proposals were Uber South Africa, the Congress of Democratic Taxi Associations (CODETA) and the City of Cape Town (COCT).
Uber, which had made proposals at the first public hearing a year ago, made further proposals. The first was for a standalone definition of “e-hailing” as a transport mode, and not as a sub-section of the metered taxis, as written in Section 1(c) of the Act. Its argument was that the mode of operation was different. Secondly, it requested that operators should be allowed to operate without a licence after two months of application, because the delays in licensing were often due to challenges with municipalities, and this would allow the government to take responsibility for the delays.
CODETA explained the challenges faced by minibus taxis and their non-inclusion in the transport integration process in the Western Cape. Some of the challenges listed were the lack of opportunity for capacity building, the monopoly of some private transport operators, inappropriate tender processes, inadequate enforcement of compliance with transformation requirements, and the need for a minibus taxi subsidy. Committee members said they were not clear which sections of the Act were impacted by CODETA’s submissions. CODETA said it proposed amendments to Section 5 (4)(f), Section 41(c), Section 51(4) and Section 41(c), which should address capacity building, the definition of monopoly and the inclusion of key performance guidelines.
The City of Cape Town (COCT) asserted that the power vested in it by Section 156 of the constitution to negotiate new contracts, would be stripped by various sub-sections of Section 11 of the NLTA Act if they were not reversed. The Section took away the power of the City and assigned a default responsibility of concluding contracts to the provinces. It argued that municipalities had had the responsibility in the past, and had demonstrated the ability to plan, implement and manage contracts.
Committee Members asked whether CODETA was in consultation with the national representatives of minibus taxi operators; if it had interacted with local municipalities to deal with its challenges; why Uber wanted to be regulated; why Uber gave operational access to anyone, including illegal migrants; and how COCT viewed the operations of Uber in Cape Town.
The Department of Transport indicated that it accepted some of the proposals which had been made. Cape Town could retain its default position for the conclusion of contracts -- and this applied to all metros – and it would be able to negotiate new contracts. However, it did not accept Uber’s requests for a standalone definition for “e-hailing” and to allow operators to use the receipt of applications where the issuance of licences was delayed. The Chairperson said the presentations would be filed and subsequently considered.
Ms Yolisa Kani, Head: Public Policy, Uber, thanked the Committee for the opportunity to be a part of the change and transformation process.
Firstly, Uber proposed an amendment to Section 1 (c) of the National Land Transport (NLT) Amendment Act. She said that “e-hailing” referred to in this section should have a standalone definition; it should not be a sub-definition under “metered taxi.” She explained that there were two differences between a metered taxi and e-hailing. The first difference was that a metered taxi used pre-determined rank, while e-hailing rendered services on demand. Also, the first used a sealed meter, while e-haling operated on a predetermined fare based on time. The implication was that the application of an e-haling system in public transport would not be allowed. There was no objection to the definition, but UBER proposed that it should be a standalone definition, which would allow any other mode of public transport to use such technology without the need for an amendment to the Act. She said there were three different definitions of e-hailing services in the Act, and a standardised terminology for e-hailing services should be adopted.
The second proposal was the deletion of the offence in Section 50, and the incorporation of a proposed new Section 50 (4) in Section 66 (7). Although Uber had nothing against the criminalisation of unlicensed operators, both Sections addressed the same issue. It would create confusion if there were two Sections that referred to the same offence which were similarly worded and addressing the same issue. The offence should be in Section 66 only.
She said Section 50 (4), 50 (5), Section 66(7) and 66 (8) referred to the criminalisation of people who operated without a valid licence, and proposed that it should be added that people who had submitted operating licence applications for more than three months could operate. The request was based on the delays experienced in the issuance of operating licences. In support of this proposal, she explained the difficulty in obtaining an operating licence.. She said this would impose a time limit on the Municipalities and other regulatory entities required in terms of the Amendment Act to process operating licenses timeously. The differences in the process varied widely from one municipality to another: starting points were defined differently across municipalities; there was poor communication on the status of applications; a disjunction existed between the Electronic National Administration Traffic Information System (E-Natis) and the Road Traffic Act (RTA), the NLTA and operators that leased vehicles; and time was often wasted on gazetting. It was therefore a process for which time could not be predicted -- it took between six to 18 months to obtain an operating license.
Mr T Mpanza (ANC) appreciated the proposals, and asked the Committee’s legal advisers if the proposals made by UBER were not sufficiently covered in the Act. He said it would be important to know this to establish a base for subsequent discussions by the Committee on the proposals. There had been a proposal for a standalone definition, which might mean creating a standalone section for all other modes of public transport, and this could generate a problem. He asked the Department if the two months required for licensing in Uber’s proposal was acceptable. He said different spheres of government had different sets of rules. He proposed a meeting with stakeholders to address the issues raised by Uber.
Mr M Sibande (ANC) said some of the proposals by Uber were good, but there were still court cases in countries where Uber had started its operations. He asked why Uber wanted to be regulated. Uber gave operational access to drive to anyone, including illegal migrants. He would not support Uber, because it ran like a parallel scheme. If checked, it would be discovered the current challenges expressed by Uber were linked to its inadequacies.. The inability to get vehicles on credit was because operators did not have legal documents. If Uber allowed itself to be regulated, the problem would be resolved. He would not support the amendments. Although the Committee did not condone the fight by taxi drivers, it would also not want to fuel the situation.
Mr C Hunsinger (DA) said that although he understood the freedom of choice, the different models and continuous expansions, he would like to get an insight into the capacity of Uber. Did it have unlimited capacity for applications by operators? If there was an unlimited opportunity to add to the system, he asked how it would affect the rate. He requested an explanation on the internal policies around the number of operators that it could take.
Ms Kani said the proposal was not specific to Uber, but it was to ensure that there would not be a need to return for another amendment to the Act in future, when other operators wanted to use the e-hailing system. Uber had done a calculation which had considered the time needed from the time an application was made until licensing, and had determined that two months would be adequate. Unless a timeline was set, there would be leverage to continue with unlimited time for the processing of operators’ licences. It would be good for municipalities to fair and transparent in their processes.
When she had referred to global trends, she was talking about the changes in the world generally. Court cases all around the world were the reactions of policies to happenings. Uber would want to be regulated, but the challenge was about having regulations that were not accommodating innovations and technology.
Every operator on the system was registered and had relevant documentations. The problem of migrants was bigger than Uber, but Uber hired only migrants that were in the country legally.
She said the airport was a queuing system, which empowered first-in, first-out, and this was how the system operated. The challenges on the issuance of licences were not related to Uber alone.
She added that Uber did not want to be treated specially, but was rather asking for rules that would work.
Most employees were not creditworthy -- some of whom were previously unemployed, without work experience or a banking record. She insisted that the non-creditworthiness of the employees was not based on their illegality.
Mr Frans Hiemstra, Country Operating Manager, said Uber had a waiting list, and the signing up of operators was not done instantly. Uber had a system of managing the number of its operators.
Mr Sibande said Uber had made an earlier presentation where it had indicated that it accepted anyone, irrespective of whether they had proper documentation or not. Municipalities had plans in terms of the number of operators, but Uber had confirmed that its list was endless. He expressed concern that people agreed to be put on awaiting list because those waiting were sure that they would be employed by Uber. It would be better if Uber had said it registered a group of metered taxis.
Ms Kani said Uber engaged a lot with the current meter taxi operators, and there was no way of compelling them to be on the platform. She said metered taxis in KZN cooperated with Uber. Uber was open to engagement, not in competition, but to complement one another.
The Chairperson said the country would have to move with innovation. It would not be in the interests of the country if it did otherwise. She looked forward to a presentation on self-driving cars and electrically-propelled cars. These were welcome technologies and would help in the reduction of green house gas emissions.
Congress of Democratic Taxi Associations (CODETA) proposals
Ms Nebu Phohlele, Contractor: CODETA, requested that minibus operators should be capacitated. There was an opportunity for public transport authorities at the national, provincial and municipal levels to set the standards for what was envisaged in capacity building in Section 5(4)(1) of the NLTA. The operators that were capacitated must be allowed to take over the operations of the bus rapid transport (BRT) system. There was not a sufficient incentive to enable the transfer of knowledge to new transport workers. Over time, minibus taxi operators may find themselves out of business because of the transition to structured, formal regulated processes. The process of transitioning should be structured to accommodate the minibus taxi operators. The integration of the transport system would not be effective if the minibus taxis were not adequately incorporated.
She said that Section 41 of the Act addressed monopoly. The definition of monopoly should not be limited to parastatals or municipal transport operators. There were private organisations that operated in the monopoly. She requested that a holistic approach should be adopted, and attempts should be made to manage silo operations, because the long term effect would undermine competition.
She said the implementing models of the BRT system may undermine the integration of minibus taxi operators. There was no indication in the Bill as to what a successful integration was. The model may empower new entrants and discard experienced operators. She asked the Committee to look into the model. If the minibus operators were not transported into the bus operations, they would not be able to compete.
The expectation of the transformative objective of the legislation could not be over emphasised, but there were no clarity on how the transformation would be achieved. There was a need to identify opportunities in the mini bus value chain. The amendment missed the opportunity to address the issue of subsidising the passengers of minibus taxi operators. Proper integration would be difficult if minibus taxi operators had to compete with other modes that were subsidised. The lack of a subsidy placed the commuters at a disadvantage.
Ms S Xego (ANC) referred to earlier information provided by the City of Cape Town (COCT) on the BRT rollout, and wanted to know if CODETA had any contractual agreement with COCT. Were there any negotiations between the two parties? Was there any section of the amendment Bill that addressed the up-skilling of the operators? She said there must be an intervention by the Committee. The Committee had invited the cities because it was serious about the BRT system.
Mr Sibande said CODETA should provide clarity on the challenges it had mentioned -- capacity building, monopoly, tender processes, and the possibility of compliance with transformation requirements. He asked if CODETA had had interactions with local municipalities on its challenges, because there were guidelines on how the integrated public transport should work. There was a risk of the minibus taxi operators being forced out of business, and there was concern about the BRT. The position of the Committee was that the BRT must be integrated and not taken above the local operators. He requested that CODETA should specify the gap in the process of integration so that it could be adequately addressed. A clear expression from CODETA would help the Committee to engage the National Department on the issue.
Mr Hunsinger said the presentation had emphasised transformation, and the need for clarity on the various processes, with a focus on information, systems and structure. It had also emphasised the development of opportunities for minibus taxi operators. The requests of CODETA were what informed the meeting; the Committee was working towards achieving these requests through public participation and expected inputs regarding certain sections of the Amendment Bill. He asked CODETA to propose a structure that would convey opportunities for the taxi industry.
Mr Mpanza said he had expected the presentation would identify sections of the Bill that addressed the required changes for consideration.
Mr Achmat Dyason, Advisor to CODETA, said the Committee had complained that there was nothing in the Act and the Amendment that addressed how the government would address minibus taxi operators meaningfully. There had been no true engagement with the minibus taxi operators. The Golden Arrow operator controlled 13% of the sector market, while the minibus taxis controlled 82%, yet the minibus taxis were not subsidised and continued to operate in stiff competition with subsidised operators. The usual excuse was that the minibus taxis belonged to the informal sector; so it was difficult to subsidise them.
CODETA had engaged the city in 2007, and had done so again recently. The BRT was not a bad idea, but the implementation had not been done correctly. The BRT had not considered the data set on population density in its plan, and the areas that should have been prioritised in the implementation of the BRT had been ignored.
It was difficult to interact with legislation because it did not speak to the needs of CODETA. CODETA was left to perform functions that were the government's responsibility. He asked for subsequent further discussion with the Committee on the issues raised. He said the system was transplanting the current status quo into its new plans. Engagements and solutions had never considered the minibus taxi industry. The presentation had not been vague on its purpose, but the legislation did not address the concerns of the minibus sector.
Mr Hunsinger said the engagement was an opportunity for the desires of CODETA to be met by changing legislation. He had been able to identify two requests from the presentation -- the suggestion for a 50% subsidy in the purchase of vehicles during recapitalization, and that licensing should be paid for by the government. This had been an opportunity for CODETA to offer solutions to their problems. CODETA had to acquaint itself with the process of legislation, and should come up with specific ideas, structures and critiques on the Amendment Bill. CODETA's inputs should come in form of requests to change, delete or add to Sections in the Bill. The aim was to make amendments to the Bill for the benefit of all.
Ms Xego said she understood the requirements of CODETA, and would engage with the Department. It was clear that they lacked information, and she assured CODETA that it also had significant importance. She asked if CODETA did not belong to a national group, or receive information given at the national level, because the Parliament should deal organisations at the national level.
Mr Besuthu Ndungane, Regional Executive, CODETA, said CODETA was not aware when invitation was sent, that it would be engaging on the BRT. CODETA lacked the capacity to understand the legislation and how to respond to it. It was an error to assume that information passed to the national structure reached the local branches. CODETA’s submission had been made because it was directly affected by the challenges. None of the people trained could operate a bus company, though a lot of money had been spent. In any transformation plan, Golden Arrow was often considered as the immediate beneficiary, which was not the same for CODETA. He appreciated the opportunity given by the Committee to give their input on the legislation.
The Chairperson said CODETA should not lose focus that it was dealing with an amendment to the Bill. The Bill had been amended once, and the meeting was for the second public hearing. It was not yet a law, and there was still room for engagement. It was important for CODETA to check on the happenings in Parliament so that it could follow the trend of events in the sector.
Mr Hunsinger asked if CODETA had any other proposals for inclusion in the Bill.
The Chairperson explained to CODETA there was still an opportunity for it to use the platform of the National Council of Provinces (NCOP), since it would also be engaging the public on the Bill.
Ms Phohlele said the submission of CODETA impacted on three Sections of the Amendment Bill -- Section 5 (4)(f), Section 41(c) and Section 51(4). She said the proposal for Section 5 (4)(f) requested that the public transport authority should set a standard for capacity building. Secondly, the definition of monopoly mentioned in Section 41(c) should be broader and, if possible, the general definition of monopoly should be used. Finally, key performance elements should be added to Section 51(4) to avoid negative unintended consequences, because it envisaged that a cut off time may lead to unintended consequences.
The Chairperson thanked the CODETA delegates and said the Committee and the Department would accept all submissions necessary to improve the transport system. Public transport impacted on the economy and it was paramount for everyone to work towards taking the country out of its present economic state.
City of Cape Town proposals
Ms Marissa Moore, Director: Business Resource Management, Transport and Urban Development Authority, City of Cape Town, said the key responsibility of cities was to achieve spatial transformation, and the perspective of the Bill was to provide intermodal integrated public transport, and to support transport-oriented development.
The City of Cape Town (COCT) relied on its powers in terms of the constitution to achieve these objectives. It would not be able to carry out these objectives if the NLT Bill deprived it of its constitutional powers. Sections 156(1) and 156(4) of the Constitution assigned functions to the municipalities. This power would be deprived by various sub-sections of Section 11, which by default assigned responsibility for concluding negotiated contracts, subsidised service contracts, commercial service contracts and stopgap contracts to provinces. This function should, by default, be assigned to municipalities. The COCT had demonstrated capacity for planning implementation and management of these types of contracts in the past.
COCT had also observed that Section 11(2) of the NLT Amendment Bill indicated that the Minister may assign the function contemplated in (1)(a)(viii) to a municipality, and the discretionary function of the Minister was not welcomed. She said that the implication of the clause was that the Minister may chose to assign the functions to a municipality, or not do so. If the function was not assigned to municipalities, it then automatically became a function for the provinces, and not municipalities. These sections would open the COCT to financial and physical risks. It would mean that the national government would be dealing an operational matter.
The COCT asked for a review so that the municipalities had the default powers for concluding negotiated contracts. She said the other proposals were in the submissions.
Mr Hunsinger said the discretionary decision of the Minister was not a direct threat, as it was stated that it would only be in particular situations that the instruction could happen. It would be better if the COCT, as an experienced entity, should identify and highlight the capacity needed and provide it to the Minister to enable the decision.
Mr Sibande asked COCT how often it interacted with local stakeholders, like the minibus taxi associations. The local taxis operators were part of the integrated public transport system, and he asked how COCT related with the group. He asked the city to identify problems associated with the burning of trains in Western Cape so that it could be looked into by the Committee. The COCT’s references to Section 11(1)(a) had been broad. He asked what it was doing to curb the operations of Uber, because Uber had found more expression in the Western Cape than inany other province.
Mr Mpanza said it was pleasing to hear that there were discussions between COCT and the minibus taxi industry in Western Cape, though this was subject to confirmation from CODETA. He could not understand the challenge highlighted by COCT on the discretion of the Minister. When there was a collision between the constitution and discretion, the constitution prevailed. He said the Minister’s discretion must be applied within the provisions of the constitution. He asked why the discretionary function of the Minister was a concern only to COCT. He assumed that it should be a concern to other municipalities, otherwise he would like to know what difference existed between COCT and other municipalities.
Dealing with operational issues, he said minibus taxi operators should look at synergy among their structure so that a national structure could represent them to speak with one voice before Parliament
Mr Sibande said the COCT had indicated the law would disempower it by giving more power to the provinces, and asked if the COCT had considered the other municipalities.
Ms Moore said the discretion of the Minister interfered with the functions spelt out in 156 (1) of the Constitution. She said the function of the national government was to provide local government with planning, regulatory, management and regulatory functions, but here the operational function had been moved back to the national level and required COCT to ask for the function.
The rail service was currently not a function of COCT, but there were ongoing engagements to include rail services in its portfolio of services because of its importance to the economy of the nation.
The BRT system would not work if there was no clarity. The city was in constant engagement with its stakeholders. Cape Town had seen the advantages of combining the best of transport to the best of technology to improve efficiency, reduce cost and accessibility.
She said Uber was flexible. COCT was investigating Uber to see how to use metered taxis in the country to provide improved public transport. Public transport in Cape Town was working because they were all taking care of specific roles. There was a need to regulate Uber without destroying the flexibility.
COCT proposed that municipalities that did not have capacity should request the provinces to help out. Transformation between the transport services was an ongoing process, and the BRT had the highest priority. It was committed to capacity building, and the city would continue to support that. The main aim was to ensure that it had a system that met the needs of passengers. Another forum where the discussions could take place was at the South African Local Government Association (SALGA).
Mr Dani Bosch, Manager: Business Planning, COCT, said clause 7(a) of Section 11 indicated that the national government must conclude a contract, while the constitution provided that the municipality should conclude contracts. The new section 11(6) clause 10 said the Minister may prescribe the requirement, which meant that the Minister was not under an obligation to do so, and that the function may be given or denied. The clauses of the Bill were in conflict with the constitution.
He said clause 7(b) was not relevant in the proposal of COCT, but relevant to the proposal was the clause that stated that it was ‘what the Minister decides’. If the Minister did not decide, then the responsibility automatically fell to the Province. The constitution had taking away the fundamental power needed for the day to day engagement of COCT, and the power had been given to the province. The Bill also ensured that the province continued to deal with that contract until it was lapsed, expired or cancelled, and the clause that allowed the Minister to reassign the contract had also been removed.
He said the proposal was that the Act comply with the constitution so that municipalities retained their powers to conclude contracts, and for provinces to step in when municipalities did not have the capacity. The default approach should be that the function remained with the city, and the existing clause allowing the assignment by the Minister should remain, because its adjustment was not necessary.
Ms Moore indicated that the city was proposing additional funding that focused on support for the minibus taxi industry.
Mr Sibande said he agreed that the province and municipality could make a proposal regarding powers. He observed that COCT’s response on Uber had been positive, yet the whole world was concerned about Uber and he was concerned that Uber had made South Africa a dumping place. He was concerned that Uber was not discrete about the people it allowed to work in its system, and the response of COCT was a contradiction to its claim for transformation, so he doubted its proposal. There were responsibilities in terms of technologies and e-hailing. He said there would be unannounced visit to COCT.
Ms Moore said she had no personal interest in Uber, but she was interested in its regulation. Her emphasis was that Uber used a common mobile phone technology, which was widely available in the city, for cheaper, accessible and safe transport. E-hailing should not be considered only in terms of Uber. There was a need to regulate, but there was also a need to consider the positive influence of technology. E-hailing was the future of transportation and a technology which would be available to all taxis in the near future.
The Chairperson thanked the delegates from COCT, and asked the Department to respond to the proposals from the three presentations.
Mr Bosch said one should not think about e-hailing as a part of Uber, rather how one would regulate the taxi industry by using e-hailing. It should be looked at in a way that e-hailing could be a system for taxis in the next five years.
Mr Hament Patel, Acting Deputy Director-General: Department of Transport, said the Department was in agreement with the proposal made on Section 11(c), which requested that the functions for new contracts should remain with municipalities. Since municipalities were already contracting and had demonstrated the ability to plan, manage and implement contracts, it was reasonable to allow them continue with the function.
The power to impose timeframes for targeted categories of passengers in Section 8(1)(y) would be addressed by adding guidelines to the Bill, because activity was subject to fund availability. However, the Department disagreed with the removal of national level contracts. National level contracts were important when provinces and municipalities failed to conclude a contract -- the provision allowed the national government to step in, and so it should be contracting.
The Department agreed with the municipality being in the default position. The assignment had been narrowed down to a licensing function. If the Committee agreed with the changes, in future metros would have the functions, while other municipalities would go through the criteria.
He said Uber’s proposal in Section 1(c), which requested that it should not form part of the sub-category of the metered taxis, was not accepted. It should be a sub-category of metered taxis because the only difference was the instruments used. Uber’s proposal requesting the deletion of the offence from Section 54 and 56 would be adopted. However, the proposal in Section 54(2)(e) that requested two months was not accepted by the Department because anyone providing public transport for reward must be licensed. Operators would not be allowed to operate with a receipt.
He said the e-hailing definition provided for taxis that would in future use the e-hailing instrument.
On the proposal made by COCT on Section 47 (1) regarding the lapses of operating licences, he said the indefinite licences were still operational and had not lapsed yet.
The Chairperson said the presentations would be filed and subsequently considered.
The meeting was adjourned.
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