National Land Transport Amendment Bill: proposed amendments

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06 March 2018
Chairperson: Ms D Magadzi (ANC)
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Meeting Summary

In the previous meeting, the Committee had agreed to the proposed amendments but still had concerns about clauses 38 and 48 which affected Uber, Taxify and taxi operators.

The Committee was of the opinion that it could not allow clauses 38 and 48 to be passed because they would make Uber operators illegal. The Department of Transport (DoT) had not provided mechanisms to legalise its operations and this could lead to riots. The Committee also expressed concerns about oversaturation of routes.

The Committee proposed the use of a transitional operating licence in the form of a removable sticker with a time frame of 120 days for identified Uber operators in the system that did not yet have operating licences, while refusing entry to new Uber operators. Also, it proposed a form of colour coding to identify Uber operators and mandated the legal team to ensure that Principal Act made provision for Uber operators to operate legally within the transitional period. Some Members suggested DoT consider having a system allowing central registration of transport operators that would incorporate insurance. However, some Members said that if the country registered every party that wanted to operate a transport service, it could lead to oversaturation of routes.

The Chairperson said Members needed to take informed decisions considering technology when legislating. Other countries that are not allowing technology are doing themselves a disservice. Although Parliament was caught unawares earlier, it now agrees that technology should be used in the improvement of transport services but these must be regulated.

The DoT agreed with the sentiments and solutions proposed by the Committee on legalising the currently identified Uber operators and the moratorium of 120 days, the colour coding of Uber and Taxify vehicles and stated that it did not have any problem with a central register for transport operators if the Committee agreed.

The Committee also discussed and finalised the terms of reference for the investigation into maladministration at the Passenger Rail Agency of South Africa (PRASA).and finalised the proposed terms of reference for the investigation. The Committee will look into irregular contracts and other matters raised in the Public Protector “Derailed” 2015 Report on PRASA. The Committee resolved to finalise the timeframes and submit an application to the House Chair of Committees for additional meetings.

Meeting report

National Land Transport Amendment Bill [B7-2016]: proposed amendments
The Chairperson said the Committee would continue with deliberations on the Land Transport Amendment Bill [B7-2016] and invited Members to make comments.

Mr L Ramatlakane (ANC) remarked that some clauses had been flagged during the previous meetings to ensure those clauses were better formulated by the legal team.

The Chairperson recalled that the flagged clauses were Clauses 38 and 48. She asked the State Legal Advisor (SLA) to proceed with the proposed amendments.

The Principal State Law Adviser, Ms Bongiwe Lufuno, said that the legal team had inserted Committee proposed changes into the Amendment Bill. She outlined the changes to Members clause by clause:

Clause 1
The word ‘electronically’ was proposed for insertion in Clause 1(c) and 1(d) to better describe the electronic hailing service.

Clause 7
In Clause 7(c) the phrases ‘and within a period of not more than 60 days of receipt of the application’ and ‘with reasons’ were inserted to give the Minister a time frame for dealing with licence permit applications made by municipalities.

Clause 11
In Clause 11(b)(3) a proposal was made on how a municipality may give notice in a prescribed manner that it would no longer receive applications for existing licence permits. The proposal was to re-phrase the provision by adding ‘subject to Section 39 such’ to Clause 11(b)(3). She stated that the Department of Transport (DoT) would address why Clause 11(b)(3) needed to be rephrased in this manner.

Mr Hament Patel, DOT Acting Deputy Director-General, stated that the phrase ‘subject to Clause 39 such’ was inserted in Clause 11(b)(3) because Clause 39(a) and (b) made a provision to guide the Minister on how applications for existing licence permits should be treated. These recommendations were made by NEDLAC hence, Clause 11(b)(3) would be subject to Clause 39(a) and (b).

The Chairperson asked the SLA to continue to highlight the changes.

Clause 13
In Clause 13(d)(7) the word ‘directive’ is replaced by ‘written request’ and ‘request’. This amendment was suggested by Mr Ramatlakane to ensure that ‘directive’ was substituted with a less harsh word.

Clause 26
This clause deals with the definite period in which operating licences could be valid. In Clause 26(1) a proposal was made to substitute five with seven years. It was also proposed that the year of operation of the NLTA be changed from 2016 to 2018 and to insert ‘to an operating licence’ after the word ‘converted’. Two proposals were made to insert ‘for a period not longer than seven years’ after the word ‘converted’ and after ‘date’ to insert ‘and such applications for conversion or renewal must be made to the regulatory entity that is responsible for receiving applications for operating licences for the relevant services’.

In Clause 26(2) proposals were made to substitute ‘seven’ instead of ‘five’, the NLTA year of operation be changed from 2016 to 2018, the insertion of the phrase ‘valid for a period not exceeding seven years’ after ‘licence’ and insertion of the phrase ‘for a period not exceeding seven years’ after ‘renewal’.

The SLA said that these were all the proposed amendments.

The Chairperson asked if the law advisors had engaged with DoT on the two clauses that had been flagged.

Clause 38
The SLA said that she and the PLA had engaged with the DoT and the amendments in Clause 38 were in the document provided.

The Chairperson asked Members to view the proposed amendment for Clause 38 and asked the law advisors to explain the proposed amendments.

The SLA said that Clause 38 dealt with the electronic hailing application and read out the proposed amendment in Clause 38.

The Chairperson asked Members if they agreed to the proposed amendment.

Mr Ramatlakane asked the legal team and DoT to clarify the impact of the use of cell phone technology on Uber and what electronic hailing meant.

Mr M Sibande (ANC) remarked that the law appeared to be disconnected because it was silent and did not address operators without permits.

The Chairperson asked the legal team and DoT to state the implications of using an App/cell phone.

The SLA replied that the implication of using an App/cell phone is that Uber prohibits a party that did not have a permit or whose permit has expired, to connect to the application. If the party did not comply with disconnection from the application it would be an offence.

Mr Patel said that Clause 38 was introduced into the National Land Transport Amendment Bill by DoT. The electronic hailing service/Uber operates by downloading an App on a cell phone. The party needs to apply to Uber to operate an electronic hailing service and Uber checks if the party meets its specifications before it approves. However, in the past Uber was not checking if the party had an operating licence. During engagements with the Minister, the DoT said that the parties needed to submit an operating licence or get it within a specific time failing which the party must get disconnected. If the party does not get disconnected it would be committing an offence. There are currently about 2000 operators in the City of Cape Town that do not have an operating licence.

The Chairperson stated that she did not have a clear answer to Mr Ramatlakane’s question.

Mr Ramatlakane said that the intention of the amendment was to outlaw parties without an operating licence who had to cease to function as Uber immediately. However, the question to DoT is does it have an enabling mechanism to enable Uber operators to get legalised. One of the implications of the legislation is to declare war on parties that are illegal. The question that the Committee needs to answer is how it would manage the implications of the provision when it becomes a law. He expressed concern that if the Committee accepts the legislation there would be a ripple effect. The same situation happened in Sandton and there was chaos. He suggested that the law recognise that the parties are operating illegally but it needed to assist Uber operators to operate legally.

Mr C Hunsinger (DA) said that Mr Ramatlakane had adequately described the situation. He suggested that as part of the solution Uber operators should be informed that it needs its services to be to identified. The Uber vehicle would need to have colour codes.

Ms S Xego (ANC) remarked that the enactment of the Amendment Bill would be an answer to what is happening between taxi and Uber operators. The Committee needs to find a way to legalise Uber operators. The operators with an operating licence are perhaps charging slightly higher than the parties using Uber technology because they pay to get their operating licence. Uber provides a value added method to get from point A to point B. However it needs to be legalised because introducing a law that makes it illegal to operate Uber without an operating licence would lead to riots and the country is not ready for such a situation now.

Mr Sibande said that DoT must have a mechanism to legalise Uber operators because he is concerned about giving out more permits without verifying if the routes need more operators as that could lead to oversaturation. The organogram of taxi operators shows the routes and the taxi ranks from where they originate. The municipalities must research to find out the routes that have vacancies so there would be no repeat of clashes that occurred when the bus rapid transit operators took over some of the taxi operator routes.

The Chairperson asked DoT to comment on the concerns of Members.

Adv Takalani Nndanduleni, Deputy Director: Legislation, DoT, said the law is that any operator that operates in the electronic hailing service must operate with an operating licence. The DoT agrees with the proposal for colour coding as it would assist law enforcement agents to identify, stop and check Uber operators that do have operating licences.

Adv Alma Nel, Committee Content Advisor, commented that she was part of resolving the challenges Uber operators had in Gauteng. Uber drivers did not regard themselves as transport operators but as service providers. To regulate the Uber operators they were categorised as Meter Service Operators (MSOs) although this led to riots because the exiating MTOs did not agree initially. This challenge was however addressed through stakeholder meetings. In situations where an Uber operator had to move passengers within two regions, the Uber operator was not allowed to pick up passengers from the destination region. The challenges of oversaturation would be addressed through the transport plan. In Gauteng, Uber operators were asked to apply for an electronic hailing sticker however because family members ride with the operators at other times, the municipality issued a removable sticker. Section 39 of the NLTA Bill provides for situations when the municipality could refuse to grant a permit based on oversaturation. The NLTA Bill is working on ways to ensure implementation but it depends on law enforcement agents to enforce it.

The Chairperson asked if Members agreed with the proposal based on the explanation given.

Mr Ramatlakane remarked that Adv Nel had identified the problem but the DoT had not resolved it. The operating licence must answer the question of the route where the Uber operators would operate. The problem is that the current legislation makes it illegal for Uber operators to operate without operating licences but it did not provide a way to get one. The law would not see the light of day except if the framework for Uber is changed from operating from point A to point B. Cape Town could borrow the procedure used in Gauteng to achieve the same results. DoT could also have markers based on colour coding for Uber vehicles already in the system and stop others from getting in while finding a way of getting operating licences for the 2 000 identified Uber operators who do not have licences yet. The mechanism provided by Adv Nel could serve as a transitional arrangement to avoid riots that could occur if Uber operators are declared illegal.

The Chairperson said it would be better if timelines are given to implement the transitional arrangement.

Mr Ramatlakane said the transitional operating licence could be in the form of a removable sticker which had a time frame of 120 days for the 2000 identified Uber operators. The legal team and DoT would then ensure that there is a provision for Uber operators to operate legally within that period. The regulations must have a provision that makes this interim arrangement.

Mr Hunsinger remarked that when Uber arrives in a country it firmly participates in the transport sector. Therefore, the Committee needs to have a system that allows a form of central registration of transport operators to ensure that all participants are identified. The central register of the transport sector should also incorporate insurance.

The Chairperson said that the DoT would tell the Committee the way forward after all the Members have communicated their concerns.

Mr Sibande said that he still had concerns because if the country needs to register every party that wants to operate it could lead to oversaturation,

The Chairperson remarked that that the DoT had to consider the position of members and state the way forward.

Mr Patel said that DoT agreed with the sentiments and solutions proposed. DoT accepted the suggestion of legalising the identified 2000 Uber operators and the moratorium of 120 days. It also agrees with colour coding of Uber and Taxify vehicles. Presently, a process has started for branding and the electronic hailing operators have agreed to the process. DoT did not have a problem with a central register for transport operators if the Committee agrees and DoT can make it a regulation.

Ms Phadziri, Director: Legislation, DoT, stated that the DoT legal team had noted the concerns of the Committee and it would go back to the Minister to address the provisions proposed.

The Chairperson asked DoT how long it would take for the proposed provision to be inserted.

Ms Phadziri replied that two days was enough.

The Chairperson asked if the time line given was in consultation with the parliamentary and state law advisors.

The PLA, Ms N Mpikashe, agreed that the two days’ time line was enough.

The Chairperson asked Members to note that laws were not static hence Members needed to take informed decisions by considering technology when legislating. The other countries that are not allowing technology for services are doing themselves a disservice. Although Parliament was caught unawares earlier, it agrees that technology should be used in the improvement of services but it must legislate.

Clause 48
The Chairperson invited Members to comment on Clause 48, a new Clause amending Section 90 of the Principal Act.

Mr Ramatlakane recalled that Clause 48 dealt with punishment that could be meted out on Uber operators that operate the electronic hailing App when their permits expire. He said that Members had hoped that a part of the clause would speak to the integrated public transport plan. He suggested that a provision be made that allowed taxis to have a feeder route for bus rapid transit (BRT) systems like MyCiTi. Also, the legislation should empower feeder routes for taxi operators instead of buying taxis out.

Adv Nel stated that Clause 18 of the Bill addressed the issues raised by Mr Ramatlakane but the provision had to be linked to Clause 39. Hence, when dealing with new licences Clause 18 would be applied while Clause 39 would be applied for old licences. The challenges were that not all operators agreed with the Master Plan. She was not sure if the municipality had considered the possibility of allotting feeder routes to taxis but Members also needed to consider the 1996 White Paper to ensure that the routes were not oversaturated.

Mr Ramatlakane said that where taxis were made illegal because of BRT systems, the option of feeder routes were not considered rather pay-outs were only given. As feeder routes were not implemented the DoT created more illegal operators instead of resolving challenges amicably. In Gauteng the taxi operators were not kicked out but integrated into the transport system. He suggested that DoT needed to find a way to incorporate Adv Nel’s suggestions into the legislation.

Adv Nel said that the City of Johannesburg was implementing the provisions in Clause 39. In the City of Johannesburg, a moratorium was given by allowing the taxi operators to buy shares in the BRT companies. She noted that Cape Town law enforcement officers had not implemented the provisions in the legislation.

The Chairperson stated that any indictment on Clause 48 would be addressed through the Committee’s oversight. She asked for comments from the SLA.

The SLA stated that the intention of the clause was to penalise offences based on contravention of section 66(7) of the principal act for clause 48(a)(1)(a) and contravention of 66(8) for Clause 48(a)(1)(b).

The Chairperson asked if Members agreed to the proposed changes.

Mr Ramatlakane said that there was a correlation between Clause 38 and 48 so the issues addressed in Clause 38 needed to be addressed in Clause 48.

The Chairperson observed that only Clause 38 and 48 were pending because of issues concerning both Uber and taxi operators. The Committee would finalise deliberations on the Bill after the DOT legal team had completed engagements with the parliamentary and state law advisors.

Committee Report on Northern Cape oversight tour
After deliberations, the Chairperson said that the draft report would be circulated to Members to verify that it was a true reflection of the visit and discussion before being submitted to Parliament.

Committee investigation in to maladministration at PRASA
The proposed terms of reference for the investigation into maladministration at PRASA were finalised by the Committee. The Committee will look into irregular and illegal contracts entered into with service providers and other issues raised in the Public Protector “Derailed” 2015 Report on PRASA.

The Chairperson said timeframes must now be finalised and an application for additional sittings submitted to the House Chair of Committees The Chairperson that the interest of the Committee was to provide safe, affordable and reliable rail transport to people. Also, it must ensure that PRASA was a well-governed state entity that is able to honour its service delivery obligations to the people while honouring its commitment to account to Parliament and DoT. The Auditor-General has in the past highlighted challenges that PRASA has seemed unable to resolve. The process is now at a stage where the Committee needs to develop timelines and prioritise key issues that need urgent attention. This could require that the Committee sits at irregular times and once the plan has been finalised, an application for additional sittings will be submitted to the Office of the House Chair.

The meeting was adjourned.

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