National Land Transport Amendment Bill [B7B-2016]: public hearings

NCOP Economic and Business Development

11 September 2018
Chairperson: Mr M Rayi (ANC, Eastern Cape)
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Meeting Summary

The Select Committee was briefed by stakeholders in the South African taxi industry – including e-hailing operators and metered taxi organisations -- on their views on the National Land Transport Amendment Bill.

 

Uber welcomed the Bill, but had three main concerns. These concerned the punitive measures, the vehicle markings and area restrictions. On punitive measures for operating without an operating licence, it said there were challenges when applications for operating licences were not issued within the prescribed period of 60 days. Uber proposed that the Minister of Transport delay the implementation of the provision until the challenges were resolved and that a clear process for challenging decisions made without following the prescripts of the Act was in place.

 

On vehicle markings for e-hailing services, Uber in principle supported markings but given the current context of intimidation and violence directed at e-hailing drivers, it said the introduction of markings would result in an escalation of targeted attacks. Markings should be applied only when the violence had subsided. The problem with area restrictions was that they reduced competition and inhibited more efficient models, which lowered prices and increased unemployment. The restrictions were no longer suitable in the face of new business models such as those of e-hailing drivers.

TransForum Business Development (Uber) said E-hailing had to be seen as having quite different characteristics and uses compared to metered taxis, and as such were in line with the coming of the Fourth Industrial Revolution. The concern with area restrictions was that the provisions could be used to artificially restrict the area in which an Uber driver operated and would affect the overall level of service to the customer. If e-hailing vehicles had special markings, they could be vulnerable to attack. On punitive measures, people were operating without operating licences due to processing delays. There appeared to be no consequences for government officials who did not process applications within 60 days.

Taxify said e-hailing services be seen as a distinct category, apart from a metered taxi. It recommended additions in the Bill to expand the definition. It suggested the possibility of interim licences being issued by municipalities, pending the final decision on applications. Vehicle markings/branding posed the danger of violent attacks. Limiting an e-hailing service provider to specific areas was a practical impossibility by the nature of the roaming service and the technology involved, as well as the consumers in the market that it serviced.

The South African Metered Taxi Operators (SAMTO) for the most part agreed with the proposed amendments in the Bill. It agreed that vehicles should be marked. However, it felt that e-hailing was not defined properly and the term should not be used in the Bill. It did not agree with the deletion of the provision in the Bill that had set standards for sealed meters in accordance with standards set by the South African Bureau of Standards (SABS). were that a distinction needed to be made between taxi services and charter services.

The South African E-hailing Association (SAEHA) emphasised the need for there to be to be strict adherence to the processing of operating licences within 60 days, otherwise temporary licences to operate had to be issued. It also expressed concerns about area restrictions and special markings on vehicles, and said if markings were necessary, they should be removable. The easiest was to have the marking on the vehicle’s windshield.

Members of the Committee encouraged stakeholders to participate in the public participation processes in provinces and to bring up issues that were relevant to them. They were concerned about the delays in application processes for operating licences, and said it would seem as if there were different processes in different provinces. The Department of Transport would be asked why processes varied.

The Chairperson in conclusion said that the Committee did not agree or disagree with what had been presented by the stakeholders. The Department of Transport would respond to the inputs that had been made on 9 October 2018.

Meeting report

National Land Transport Amendment Bill: Uber input

Ms Yolisa Kani, Head: Public Policy SA, Uber, said Uber had been launched in South Africa in September 2013. It had over 679 000 active monthly riders, and also had over 120 000 active monthly partner-drivers. Uber welcomed the Bill, but had three main concerns. These were with regard to the punitive measures, vehicle markings and area restrictions.

Punitive measures

The Bill proposed the insertion of section 66 A(7), which provided that e-hailing companies switch off operators operating without an operating licence or else face a fine of up to R100 000 or imprisonment. The problem was that there were challenges faced by public transport operators in applying for operating licences when these licences were not issued within the prescribed period of 60 days. Uber therefore proposed that the Minister of Transport delay the implementation of the clause until the challenges were resolved, and that a clear process for challenging decisions be made without following the prescripts of the Act that was in place. This should apply across all modes.

Vehicle markings

Section 66A(5)(b) states that the Minister must make regulations prescribing special markings, or any other requirements for vehicles used for e-hailing services. Uber in principle supported markings, but given the current context of intimidation and violence directed at e-hailing drivers, the introduction of markings would result in an escalation of targeted attacks. Markings should be applied only when the violence subsides. The use of “may” was preferred instead of “must”. In the first draft of the Bill, “may” had been used. The Minister should be given discretion until such time that the violence blew over. Uber proposed that the clause be delayed.

Area restrictions

Section 66A(2)(b) provided that an e-hailing vehicle may pick up passengers outside of an area if the fare was pre-booked and the passenger would return to that area. The problem was that such restrictions reduced competition and inhibited more efficient models which lowered prices and increased employment. The restrictions were no longer suitable in the face of new business models, such as those of e-hailing drivers. Uber proposed that legislators implement the new legislation in recognition of the fact that the ways in which metered taxis and e-hailing vehicles operated had changed.

Discussion

The Chairperson asked, when the Bill had been passed and signed by President Ramaphosa, whether the possibility existed that certain clauses could not be implemented. Uber had in its submission recommended that the Minister of Transport delay the implementation of a clause.

Ms Noluthando Mpikashe, Parliamentary Law Adviser, responded that it was possible. President Ramaphosa could make some clauses operational and others not. This was what had been done with the Administrative Adjudication of Road Traffic Offences (AARTO) Act.

The Chairperson asked how many cases of intimidation had been reported to the South African Police Service (SAPS).

Ms Kani said that Uber did work with the SAPS. There was private security as well. However, there were not that many arrests. Metered taxis and minibus taxis would confirm that there were not many arrests. No perpetrators had even been arrested on the slaying of the 14 taxi drivers not too long ago.

Mr W Faber (DA, Northern Cape) felt that e-hailing needed to be incorporated into the entire Bill. There was a need to look at some of the clauses of the Bill. The Committee had encouraged stakeholders to participate in public participation processes in the provinces and to bring up issues. It all depended upon what provinces provided to their delegates on the Committee, and then amendments could be made to the Bill. As much as Members appreciated that drivers had grievances, this was not the forum to highlight them. The Committee was tasked at looking at the Bill and what amendments could be made to it.

The Chairperson said that the Committee would allow the Department of Transport to comment on the presentations that stakeholders had made. Once the Committee had the Department’s responses, then it would be sent to the provinces. Once again, stakeholders were encouraged to participate in public hearings in the provinces. Provincial legislatures would then consider possible amendments and incorporate them into the province’s negotiating mandate. Province’s negotiating mandates would be considered by the Committee. The Committee could either agree or disagree with proposed amendments and send amendments back to provinces for consideration in final mandates.

Mr E Makue (ANC, Gauteng) observed that Uber had placed a great deal of attention on the processes of punitive measures. The point had been made that it was difficult to obtain operating licences, as there were huge delays in the application process. It would be useful if Uber could do the same presentation in the provinces.

Mr Faber said that he had met with Uber before, and asked what the reason for the delays in the application process for operating licences were. It seemed as if there were different processes in different provinces. In some provinces, the Department of Transport granted the operating licence and then it went to the municipality. In others ,it went first to the municipality, and then to the province. The Committee needed to ask the Department of Transport why the processes varied. He commented that perhaps there were problems of capacity at the municipal level.

The Chairperson said that the Department of Transport would be engaged at another time. The Committee was at present dealing with only public hearings. He advised Uber to participate in public hearings in the provinces, even if they did not operate in a particular province.

TransForum Business Development (Uber) input

Mr Paul Browning, Public Transport Analyst: TransForum, said he spoke on behalf of 3 000 Uber drivers. E-hailing had to be seen as having quite different characteristics and uses compared to metered taxis. E-hailing was in line with the coming of the Fourth Industrial Revolution.

On section 66A(1)(b), which covered area restrictions, the concern was that the provisions could be used to artificially restrict the area in which an Uber driver operated and affect the overall level of service to the customer.

On section 66A (5)(b), which covered special markings, the concern was that if e-hailing vehicles had special markings they could be vulnerable to attack. The customer could easily recognise the vehicle from data on his/her smartphone.

On section 66A(7)(b), which provided that e-hailing companies switch off operators operating without an operating licence, was a concern because there were challenges in the processing of operating licence applications by authorities. Those with existing operating licences and those who were in the process should not be required to make new application for e-hailing licences. Drivers said that the delays caused a loss of income and a drop in the use of services. There appeared to be no consequences for government officials who did not process applications within 60 days. He conceded that due to delays people were operating without operating licences.

 

The Committee was asked to recommend a “Special Legalisation Process,” similar to what had been implemented in the year 2000 in relation to minibus taxis.

 

Discussion

 

Mr Makue referred to Clause 66(A)(1)(b), which referred to a regulatory authority granting an operating licence being able to specify areas where passengers could be picked up. After the conflict that had erupted in the industry, the Bill had attempted to define routes that drivers could use. He asked whether TransForum was still insisting that there be no demarcation of routes.

 

Mr Browning responded on whether the designation of routes would bring order to the industry, and explained that the concept of e-hailing placed persons in touch with a driver that was closest to him/her. This needed to be taken into account. He did understand the point of the designation of routes, but it was not practical in the internet age.

 

Mr B Nthebe (ANC, North West) asked Mr Browning whether they could agree that there was a difference between an operator and a driver. If TransForum represented drivers, then why in its presentation was it speaking about operating licences? He added that the presentation had not said much about the job security of drivers and other driver-related issues.

 

Mr Browning said that the points made were valid. However, the reason for the public hearings was to speak to possible amendments to the Bill. The relationship between Uber and the drivers was not part of the deliberations on the Bill. Uber, Taxify and other e-hailing organisations were providers of the application (app). He made the distinction that applications for operating licences were done by “driver partners,” which was the operator.

 

Taxify input

 

Mr Gareth Taylor, Country Manager SA: Taxify, said that Taxify connected 15 million users in 28 countries with 500 000 driver partners. Taxify had started in 2013 and had entered the South African market in 2015. Taxify ran towards regulation, and not away from it. There were, however, matters of concern to Taxify.

 

On the definition of e-hailing services Taxify said that e-hailing services should not be misinterpreted as a metered taxi -- it should be seen as a distinct category. The definition in the Bill had to be strengthened and enhanced to aid application and implementation. Taxify recommended additions to section 1C, which expanded the definition.

 

On the issuance of operating licences, Taxify proposed the amendment of section 66A(5) due to the backlogs at various municipalities. There should be the possibility of interim licences being issued by municipalities pending the final decision to be made.

 

On vehicle markings/branding, the concern was that given the violent attacks on e-hailing vehicles already taking place, this would escalate if vehicles were marked/ branded. E-hailing vehicles were marked digitally, and only approved drivers and vehicles were used. Vehicle models and registrations were known to commuters.

 

On the limitation of areas or rank specifications Taxify was concerned that limiting an e-hailing service provider to specific areas was a practical impossibility by the nature of the roaming service and the technology involved, as well as the consumers in the market that it serviced. Taxify consequently recommended an amendment to section 66A(1)(b), which essentially stated that the regulatory authority granting an operating licence for such a service may specify, with regard to central business districts, highly congested areas or specific areas of public spaces for picking up of passengers, subject to section 57(5). If the proposed amendment to section 66A(1)(b)was accepted, then section 66A(2) could be deleted.

 

Discussion

 

The Chairperson made the observation that he had not seen Taxify as one of the stakeholders that had been consulted on the original Bill. It would have made things much easier if the Department of Transport had heard Taxify’s views earlier.

 

Mr Makue said that there seemed to be confusion around the understanding of what the route issue was., Taxify had proposed the deletion of Clause 66(A)(2) in the Bill on the limitation of areas and route specifications. In addition, in its recommendations, it had also made mention of Members of Executive Councils (MECs), in that Taxify accepted the authoritative power residing with the municipalities.

 

Mr Taylor said that a discussion on routes could be had. For traffic management, municipalities wished to specify areas for pick ups and drop offs. Taxify had proposed an inclusion in Clause 66(A)(1)(b) which made Clause 66(A)(2) fall away. It was a consequential drafting amendment.

 

Mr Faber felt that the views of Taxify were very much the same views expressed by Uber. He understood that there could not be specific routes for e-hailing. He reiterated that Taxify, Uber and all stakeholders should participate in provincial public hearings. Each provincial legislature could then submit proposed amendments to the Committee. If Taxify was proposing deletion of certain clauses, then it should be proposed at provincial hearings.

 

Mr Taylor responded that Taxify intended to make presentations to the provinces. On Taxify and Uber having the same provisions, he begged to differ. Taxify’s approach was different, as could be seen in its recommendations.

 

Mr Faber said that Taxify needed to find out the dates and times that hearings would take place in the provinces.

 

The Chairperson urged Taxify and other stakeholders to meet with Members of Portfolio Committees in provincial legislatures to get their points across.

 

Mr Taylor referred to the Chairperson’s earlier question around crime incidents and whether or not to have markings on vehicles, and said that Taxify provided emergency assistance to its drivers at the touch of a button. Drivers could be tracked and be given real time assistance. This made it easier to collaborate with the SAPS. Taxify had written letters to the Minister of Police and the SAPS National Commissioner on the number of crime incidents.

 

The Chairperson said that the Committee needed to be convinced that there was intimidation. The Committee needed to have statistics on cases and incidents. The information would assist Members. The information should be provided to provinces as well.

 

Ms M Dikgale (ANC, Limpopo) remarked that Taxify did not operate in Limpopo Province. She asked how they managed to keep their rates so low. Where did Taxify drivers fill up with petrol? She also asked what Taxify did for the protection of its drivers. SA needed employment to be created in the country. Taxify was asked how it interacted with the metered taxi industry with the aim of resolving issues.

 

Mr Taylor sid that hopefully, Taxify would operate in the Limpopo Province soon. Drivers were self-employed and could decide on their own hours. Taxify was indeed affordable, and drivers earned at least a minimum wage. He said that all South Africans were affected by crime. Taxify tried to mitigate the danger and relied on the customer’s details that were captured by the Regulation of Interception of Communication Act (RICA). Taxify had a panic button in vehicles.

 

Mr Faber commented that customers could instruct drivers to go from A to B. However, the Uber and Taxify driver knew only where to pick the customer up. He/she had no idea where the destination was. Only when the passenger got in was he/she informed. As the Bill stood, it did provide for the destination to be specified to the driver beforehand.

 

Mr Taylor, on the safety of drivers, said that a driver had the right to reject a trip.

 

South African Metered Taxi Operators (SAMTO) input

 

Mr Prince Pirikisi, Secretary: Gauteng Metered Taxi Operators, presenting on behalf of SAMTO, said SAMTO agreed for the most part with many of the proposed amendments contained in the Bill. For one, it agreed that vehicles should be marked. However, it felt that e-hailing was not defined properly and the term should not be used in the Bill.

 

The SAMTO did not agree with the deletion of section 66(2), as proposed in the Bill. The provision had set standards for sealed meters in accordance with standards set by the South African Bureau of Standards (SABS). The SAMTO was against the deletion, as the SABS had been given control to apply a standard measure on both digital and manual meters so that they were not digitally or manually tampered with. Digital meters had also to be checked.

 

The SAMTO was also against the deletion of section 67(3), as was proposed in the Bill. It felt that a distinction needed to be made between taxi services and charter services. It proposed the rewording of certain provisions. One such rewording was on the new (cA) sub-clause that replaced section 66 (4) of the Act, as was proposed in the Bill. It felt that the new sub-clause (4) being proposed in the Bill to be added to section 67(c), should be deleted. The SAMTO felt that the term “organised parties,” as used in the sub-clause, was not defined. Changing the operations of current charter permit holders would cause a conflict of interests with metered taxi services.

 

Discussion

 

Mr Faber said that he did not agree with some of the comments that the SAMTO had made. For one, he did not agree that taxis should be marked. In recent times, Uber drivers had been attacked so one could not blame them for not wishing to be branded.

 

Mr Pirikisi explained that a marked vehicle made it easier to identify the vehicle. Marked vehicles did not get attacked that much. The metered taxi industry wished to grow into the fourth industrial revolution. Uber drivers were afraid to mark their vehicles because of the tensions that existed. A marked vehicle was good for safety. In unmarked vehicles, there were incidents where passengers were raped and robbed. Even having a small disc on the vehicle windscreen was sufficient as a means of identification.

 

The Chairperson interjected, and said that Members should only be asking clarity-seeking questions and should not be giving their own points of view.

Mr Faber said that the e-hailing app that the passenger had on his smartphone had all the details of the driver on it, so what was the danger to the passenger? The SAMTO had spoken about zones, but he said that operating only in certain zones increased operating costs. It made sense not to operate in zones. Perhaps it was prudent for the SAMTO not to operate in zones. It would bring down costs.

Mr Pirikisi said that metered taxis operated in zones. The SAMTO was proposing that when a vehicle moved from one zone to another, there had to be identification on the system. Municipalities found it difficult to regulate e-hailing. E-hailing vehicles tended to park anywhere.

Mr Makue asked what SAMTO’s footprint was. How many provinces was SAMTO in?

Mr Pirikisi said that the SAMTO represented all regions in SA. They were in all the provinces.

Mr Nthebe asked the SAMTO what the modality of the background check that it envisaged was. Would it not impact on the process of issuing operating licences?

Mr Pirikisi replied that the background check was important. There was a great deal of negligence around background checks on drivers. The SAMTO proposed that a background check on drivers be done. Perhaps a police clearance certificate could be issued on whether the person was fit to be an operator.

On operators being attacked, there would be instances where the Subscriber Identification Module (SIM) card of a passenger was not RICA-ed. A proper system was needed. He said that the fine details needed to be looked at.

The Chairperson said that the Committee did not agree or disagree with what was being presented by stakeholders. The Department of Transport would respond to the inputs that had been made on 9 October.

South African E-hailing Association (SAEHA) input

Mr Trevor Mathebula, Secretary, SAEHA, said that e-hailing had to be recognised as a separate category that varied greatly from the traditional metered taxi industry. The SAEHA said there needed to be strict adherence to the processing of operating licences within 60 days. If, however, applications had been submitted and the 60 days had passed, then temporary licences to operate had to be issued.

 

On section 66A(1)(b), which covered area restrictions, the SAEHA had concerns that it would not only restrict drivers to certain areas, but would also mean that passengers would not be able to access the service beyond certain points. This would make certain destinations inaccessible.

 

Section 66A(5)(a)(ii), which spoke about the identification of the driver, should also require e-hailing companies to provide RICA or other forms of verified information of passengers, which could include a photo of the passenger for safety purposes to the driver.

On special markings on vehicles covered by section 66A(5)(b), the SAEHA felt it to be a danger to e-hailing drivers as well as passengers, especially when driving into or past high risk areas. If markings were necessary, they should be removable. The easiest was to have the marking on the vehicle’s windshield.

Discussion

The Chairperson asked the SAEHA what it was proposing.

Mr Mathebula stated that there were organisations such as Uber and Taxify that had taken out billions of rands out of SA. Did these organisations pay tax? He said that the money went directly to the companies abroad. Africans were being exploited. These industries did not offer security. There was a need for drivers to have some sort of ownership stake.

The Chairperson emphasised once again that stakeholders needed to focus on the legislation at hand. The grievances that were highlighted to Members related to labour issues, or working conditions. These matters did not relate to the Bill.

Mr Faber said he had heard what was being said about drivers’ working conditions in the e-hailing industry. Perhaps drivers in the metered taxi industry were having the same problems. He suggested that the Chairperson, as a Member serving on the Portfolio Committee on Labour, could offer some guidance to the aggrieved drivers. However, the labour issues raised had nothing to do with the Bill.

The Chairperson addressed the Department of Transport, and instructed them to ensure that they had all the presentations and written submissions of stakeholders so that proper responses could be given.

The meeting was adjourned.

 

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