National Land Transport Amendment Bill [B7B-2016]: Department response to submissions

NCOP Economic and Business Development

09 October 2018
Chairperson: Mr M Rayi (ANC, Eastern Cape)
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Meeting Summary

The Department of Transport presented its responses to submissions received on the National Land Transport Amendment Bill from Uber South Africa Technology, Taxify South Africa, South African Local Government Association (SALGA), Uber Driver Partners, South African Metered Taxi Operators (SAMTO) and South African E-Hailing Association (SAEHA). DoT said for the most part that the concerns raised by stakeholders were already covered in the Bill/principal Act or alternatively would be included under the Regulations to be formulated. There were however instances where the DoT accepted proposals. A major concern highlighted by the submissions was huge delays in the processing of operating licence applications.

Committee members asked if the Minister of Transport would have the required capacity to prescribe standards for meters. Members noted that the delayed processing of applications for operating licences was impacting on the livelihood of drivers. DoT was asked why a 60 day processing time for operating licence applications was needed - what informed the decision for 60 days? Members felt 60 days was too long. This ought to be done speedily and what was causing delays? DoT was asked what research it had done on the backlogs in operating licence applications. Members stated that there was a need for systems of government to interface better. Departments needed to work together. Members felt the 60 day period to be way too long. Challenges that the DoT was facing had to be addressed. Members suggested that the Committee undertake an oversight visit to the DoT to get to the bottom of the matter. DoT was asked to simplify the Bill so that operators and drivers could understand it. Members noted that there was a great deal of tension in the sector. Members pointed out that there were many aspects set out in the purpose of the Bill that had not yet been dealt with.
 

Meeting report

National Land Transport Amendment Bill: Department responses to submissions
Mr Hament Patel Chief Director: Regulation, Department of Transport presented the DoT’s responses:

Uber South Africa Technology
Clause 40
In section 66(7) where Uber proposed that the implementation of the clause be delayed the DoT noted the input and said that delaying implementation was already covered in the Bill. In section 66A(5)(b) requiring special markings on vehicles, Uber in light of the violence that had erupted in the sector proposed that the Minister of Transport be given a discretion to make regulations on this. The DoT noted the concerns of Uber and assured them that it would be taken into consideration during the drafting of regulations. In section 66A(2)(b) DoT noted the comment on area restrictions in that the manner in which taxis operated had changed. In section 66A(2)(b) which provided for an exception on area restrictions, DoT supported Uber’s proposal that the provision should be amended to read: “ The vehicle may pick up passengers outside of that area, if the trip is pre-booked”.

Clause 3(f) and (g)
In section 8(1)(bbA) and (1A) Uber suggested that the Minister be granted the power to issue regulations to alleviate the backlogs in operating licence applications. DoT stated that a new clause had been inserted in the Bill to empower the Minister to make such regulations. The matter was thus covered.

Taxify South Africa
Clause 1(c)
DoT responded that the Taxify proposed additions and insertions to section 1(1)(d), (e), (f) and (g) were more suited to charter taxi services and was adequately covered by section 66A.

Clauses 3, 5 and 40
In sections 8, 10 and 66A(5) Taxify commented that there was duplication, conflict or tautology between these sections. It did feel that the amendment was a step in the right direction to align the regulatory powers of the Member of the Executive Council (MEC) and that of the Minister in section 8. DoT responded that there was no duplication, conflict or tautology. The various powers to make regulations were designed to complement each other.
 

Clause 12
In section 18 Taxify proposed an additional subsection (1A) which made provision for a municipal regulatory entity or other regulatory entity to establish a process whereby interim licences were issued within 14 days which would be valid pending the outcome of the final decision. DoT responded that the proposal was unrealistic. Applications had to be processed within 60 days. It was a lengthy process. The new section 8 (1)(bbA) and (1A) would empower the Minister to make regulations to expedite administrative processes for operating licences.
 

Clause 40
Taxify called for section 66A(1)(b) to be amended. DoT responded that there was no need for the amendment as the proposed section 66A(1)(b) read with section 57(5) of the principal Act would empower regulatory entities to impose such conditions. The regulatory entity would be able to determine which area the operator could operate in.

Taxify proposed the repeal of section 66A(2) which DoT supported as the section would impose unwarranted restrictions on e-hailing services. In section 66A Taxify felt the requirements and standards for metered taxi services as set out in the section should not be imposed on e-hailing services as it was a separate and distinct category provided for in the Bill. DoT agreed with Taxify and had agreed to Uber’s proposal on this. Taxify called for the amendment of section 66(5)(a) and (b) on the drafting of regulations. DoT did not support the proposal as it was already covered by section 8(2) of the principal Act.

South African Local Government Association (SALGA)
Clause 1(d)
In section 1(1) SALGA proposed that rail be included in the definition of “integrated public transport network”. DoT responded that rail was included in the definition of “public transport service” which formed part of the definition of “integrated public transport network”.
 

Clauses 7(b)
In section 11(1)(b)(viiA) SALGA stated that municipalities had raised concern over the section and that it might be in contradiction of section 156(4) of the Constitution. DoT’s response was that provinces had to undertake the contracting function to ensure service delivery to passengers if the municipality did not meet certain criteria to qualify to be a contracting authority. If the municipality did meet the criteria, then it could take over the contracting function.
 

Clause 7(h) and (i)
In section 11(1)(c)(xxvi) concerns were raised about the Minister being given unfettered powers to prescribe criteria that municipalities had to meet in order to conclude contracts. DoT noted the concerns but pointed out that the provisions were crafted in close consultation with the Department of Cooperative Governance and Traditional Affairs (COGTA).
 

Clause 8(a)
In section 12(1) SALGA said it was felt that provinces should not have the ability to force joint exercise of power through being able to make provincial legislation. The option of devolution to the municipal sphere should not be unnecessarily compromised or excluded. DoT’s response was that provinces were already empowered by the Constitution and by section 12 of the principal Act to make legislation to establish provincial transport authorities.
 

Clause 22
In section 41(A) to add to “(b) is a contract with a duration of not more than three years” the words “or an extension thereof that complies with the provisions of the Municipal Finance Management Act”. DoT’s response was that the proposed wording would be in conflict with section 217 of the Constitution which provided that procurement of services for government must be competitive. The State Law Adviser’s Office had advised that sections 41 and 41A provided exceptions to this rule which were acceptable but should not be expanded.

SALGA noted and supported Clauses 2, 3(e), 12 and 21(e). DoT noted the comments on these.
 
Uber Driver Partners – as submitted by Transforum
Clause 3(f) and (g)
In section 8(1)(bbA) and (1A) concerns were raised about the delays in processing operating licence applications and that the Bill was not addressing the matter. The proposal was that a ‘special legalisation process’ be put in place for Uber drivers as was done with mini-bus taxis in the 1990s. DoT responded that the matter would be covered in the proposed regulations which would provide for processes similar to the ‘special legalisation process’.
 

Clause 40
In section 66A DoT noted the comment that e-hailing was not a different form of metered taxi but had totally different uses and characteristics. Concerns were also raised about area restrictions in section 66A(1)(b). DoT shared the concern that the provision may be unduly restrictive and was not apposite to e-hailing services. The proposed section 66A(1)(b) read with section 57(5) of the principal Act would empower regulatory entities to impose such conditions. The regulatory entity would be able to determine which area the operator could operate in. In section 66A(5)(b) there were concerns similar to those raised by Uber about the safety of drivers if vehicles had special markings. DoT responded that it was aware of the concerns and that regulations would be developed bearing in mind these sensitivities. In section 66A(7)(b) concerns were raised about delays in processing operating licence applications which was beyond the control of drivers. DoT reiterated that the Bill did allow the Minister to delay certain provisions to come into play.

South African Metered Taxi Operators (SAMTO)
DoT noted the comments made on Clauses 1(a), 1(d), 2, 3(b), 3(c) and 5(a) of the Bill.
 

Clause 1(e)
In section 1(1) SAMTO said the definition of ‘metered taxi services’ already covered what was being proposed. The response by DoT was that the Act was being amended to make it clear that an operator may have an e-hailing authorisation and a metered taxi authorisation on the same operating licence for the same vehicle. Reference was made to section 66A(6) and to section 50(2) of the principal Act. The Bill covered both a meter and an e-hailing application.
 

Clause 39(b)
In section 66(4)(cA) SAMTO preferred that the South African Bureau of Standards (SABS) be in control of the standard measure applied to both digital or manual meters. It preferred that the subsection not be deleted. DoT’s response was that it was better for the Minister to prescribe standards for meters as the SABS had not finalised these standards since the principal Act was implemented in 2009.
 

Clause 40
SAMTO proposed a rewording of section 66(4)(cA). DoT did not support the rewording but the comment was noted. The powers provided in the Bill would enable the Minister to make regulations on these matters. In section 66A(4) SAMTO proposed a rewording to which DoT was not in support of. The proposed wording change would create confusion between metered taxi services and e-hailing services.
 

Clause 41(b)
In section 67(3) SAMTO proposed that the paragraph not be deleted. DoT did not support the proposal as it was already covered by the amendments to section 66 on metered taxi services and section 67 on charter services. The existing section was causing confusion.
 

Clause 41(c)
In section 67(4) SAMTO suggested that the amendment to add a proposed paragraph be deleted. DoT disagreed. The amendment was designed to clarify the operation of charter services and to avoid confusion with metered taxi services. The Provincial Regulatory Entities (PREs) had for many years been using the term ‘organised parties’ to describe charter services although the term did not occur in the Act.

South African E-Hailing Association (SAEHA)
Clause 40
SAEHA supported section 66A but it wished it to be amended to include the facilitation of electronic payments of fares and not just communicating the estimate and final fare to the passenger or passengers at the conclusion of the trip electronically. DoT responded that prohibiting cash transactions would amount to undue interference in private sector contractual arrangements. This was not a matter for the Bill.

SAEHA commented that DoT should set market related fares for the taxi industry including the e-hailing sector and insert a clause in the Bill regulating the financial arrangements between e-hailing companies, drivers and those acting as intermediaries between companies and drivers. E-hailing drivers did not get sick leave, unemployment benefits and could not get loans from banks. SAEHA wished for the Bill to include provisions to declare the deactivation of e-hailing drivers without good reason by e-hailing companies as an offence. There were concerns about the escalating violence against Uber drivers and that companies were not assisting.
 

SAEHA commented that the Bill should include a provision on capping the issuing of permits or operating licences to e-hailing operators in line with the integrated transport plan and based on consultation with all stakeholders. DoT responded that it was not government policy to set fares except where a subsidised contract was involved. To do so would be in conflict with the Competition Act. Secondly, labour matters were beyond the scope of the Bill. It needed to be dealt with by labour legislation and private sector contractual arrangements and perhaps by the Workmen’s Compensation Act. Matters such as loans from banks and the deactivation of e-hailing drivers were also beyond the scope of the Bill. Violence against Uber drivers was a matter for law enforcement and for private contractual arrangements. DoT responded that the issuing of operating licences was subject to integrated transport plans in terms of section 55 of the principal Act. DoT’s view was that capping of licences without adequate planning would be anti-competitive and be an unwarranted interference in the market.
 

Clause 12
SAEHA said that 30 days was a reasonable time within which applications for operating licences should be processed. It also called for a moratorium on sanctions against e-hailing drivers until this challenge was resolved. DoT’s response was that the matter would be covered in the new regulations made under section 8(1)(bbA) and (1A).
 

Clause 50(a)
SAEHA proposed that section 90 be amended to include a penalty which would serve as a deterrent for non-registration of riders by e-hailing companies. DoT responded that it was a contractual matter between the driver/operator and the e-hailing service provider. This should be considered by the regulating authorities when considering applications for operating licences for e-hailing services i.e. whether the applicant was properly registered with an acceptable e-hailing service provider.

Discussion
The Chairperson asked Members to ask only clarity seeking questions. Members should not state a position for or against the Bill. On the 30 October 2018 the provinces would submit their provincial negotiating mandates. Copies of the negotiating mandates would be sent to DoT. DoT would be required to respond to the proposals made by each of the provinces. The responses by DoT should be provided to the Committee at least seven days before the Committee met with them. He pointed out that Members had received the DoT response to submissions document yesterday on 8 October. The Committee should have received it at the latest on 4 October 2018.

Mr Patel replied that it was not a problem to submit DoT’s responses to negotiating mandates to the Committee at least 7 days before its meeting with the Committee. However he asked by when DoT could expect the provincial negotiating mandates from the Committee. He pointed out that DoT had sent its response document to the Committee Secretary on Friday 5 October 2018 between 11.00-11.30am.

Mr W Faber (DA, Northern Cape) said that the DoT response presentation was clear. Members could further down the process engage with DoT when it responded to negotiating mandates.

Mr L Magwebu (DA, Eastern Cape) said that DoT responded it was better for the Minister of Transport to prescribe standards for taxi meters since the South African Bureau of Standards (SABS) had failed to do so for a number of years. Would the Minister of Transport have the required capacity to do this? He pointed out that Uber and Taxify had raised concerns around the processing of operating licences. DoT was opinion that the 60 day period was reasonable whereas Uber and Taxify felt it was not. The concern was that the delays in processing of operating licences were affecting the livelihoods of Uber and Taxify drivers. He said that DoT response to the 60 day processing time for operating licences was vague. Uber and Taxify felt that 30 days was sufficient. Was DoT supporting 30 days or 60 days? DoT was asked what was being provided for in the regulations.

Mr Patel replied to the question whether the Minister of Transport would have the required capacity to prescribe standards for taxi meters saying that DoT had responded that SABS capacity and resources were lacking. SABS could for the past nine years not prescribe standards for taxi meters. The Minister of Transport would be able to do the function and hence DoT needed to appoint technical people. At present DoT did not have the capacity.

Ms M Dikgale (ANC, Limpopo) agreed with Mr Magwebu that the 60 day processing time was frustrating. The delays were affecting the livelihoods of drivers. She felt that two weeks was sufficient time to process operating licence applications. Operating licences should be processed quickly. She was disappointed that the response document spelled out what the thoughts of the Portfolio Committee on Transport was. It gave the impression that the Select Committee was tasked only with rubber stamping the Bill.

On the undue delays in the processing of operating licence applications, Mr Patel replied that it was fact. There were serious delays. DoT had engaged all provinces on the matter. There was not only a single challenge, there were many.

The Chairperson reminded Members to limit themselves to clarity seeking questions. The matter  of the operating licence processing time would be discussed after 30 October 2018. DoT needed to inform the Committee on what research it had done on the delays and backlogs in processing operating licences. What informed the decision to go with a 60 day processing time?

Mr Magwebu commented that there was a need for systems of government to interface. Departments needed to work together. He felt that 30 days was good enough. Even 20 days was sufficient if one worked smartly.

On what had informed the 60 day processing time, Mr Patel explained that there was a need for information from various departments such as the South African Police Services (SAPS), the South African Revenue Services (SARS) and the Department of Justice (DoJ). There was a process involved. In accordance with the Promotion of Administrative Justice (PAJA) Act, publication had to take place in the Government Gazette. The application had to lie for 3 to 4 weeks to see if there were any objections to it. Hence the 60 days was needed. It was a lengthy process. If there were objections then it complicated matters as hearings had to be held. The application also had to be sent to the relevant municipality for comment in terms of the Integrated Transport Plan of the municipality. A regulatory committee would be appointed by the Member of the Executive Committee (MEC) to adjudicate on the application received. The regulatory committee was a quasi judicial body and not a full time structure. The committee did not necessarily meet daily. In some provinces like the Gauteng Province it was a full time body. He noted that there was a problem with the management of processes in regulatory entities. There were a whole range of processes and situations to be considered. The National Land Transport Information System created by DoT had not been upgraded since its inception in 2002. There was problems with the System which had not been fixed.

The Chairperson referring to the challenges raised by Mr Patel said that they needed to be addressed. He asked if the regulations were in draft or final form. The Committee had requested other regulations from the Road Traffic Infringement Agency (RTIA) but they had not materialised. DoT was asked to provide the Committee with the regulations. If matters were being addressed in the regulations then the obvious thing was for the Committee to check if they were. The Committee needed the regulations as soon as possible.

Mr Patel responded that DoT was starting to redesign the National Land Transport Information System.

Ms Dikgale proposed that the Committee undertake an oversight visit to DoT on the matter of the processing of operating licence applications.

The Chairperson stated that perhaps the Committee could visit the offices that dealt with applications. If the Committee was unable to do the oversight visit, the Committee could in its legacy report suggest that its successor undertake the oversight visit. He pointed out that he had met with the taxi association members that had raised placards during the hearings process over the Bill. He had requested them to provide him with documented information. Most of their gripes were labour related. He had intended once he was provided with the documented information to set up a meeting with the Department of Labour (DoL). The taxi association members had to date not provided the information requested of them and hence no meetings with DoT and the DoL could be scheduled.

Mr E Makue (ANC, Gauteng Province) stated that DoT had participated in provincial stakeholder meetings. He asked that DoT simplify things so that operators and drivers could understand what was happening. There was a great deal of tension in the sector. In the clause on the purpose of the Bill there were many things that could not be dealt with. Many of the elements of the Bill’s purpose should not be missed in dealing with the negotiating mandates.

The Chairperson asked Parliamentary Legal Adviser if she had anything to add.

Ms Noluthanda Mpikashe, Parliamentary Legal Adviser, said that there was one matter that SALGA and the City of Cape Town had raised. With the proposed amendments, municipalities would now be under provinces when it came to transport contracts. A legal opinion was given to the Portfolio Committee on Transport on the matter and it would be provided to the Committee as well. There was no need for the Committee to be concerned about the matter.

Mr Patel asked by when DoT could expect the negotiating mandates from provinces so DoT to organise itself.

The Chairperson stated that as soon as the Committee received the provincial negotiating mandates, they would be forwarded to DoT. The Committee itself was not sure when it would receive the negotiating mandates.

Mr B Nthebe (ANC, North West) as the committee whip said that he wished to place DoT at ease and that the Committee support staff would communicate logistical arrangements with DoT.

The minutes of 4 and 11 September 2018 and the Fourth Term Committee Programme were adopted.
 
The meeting was adjourned.
 

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