PCOT presentation: https://docs.parliament.gov.za/share/s/4qbcDe_OTkqUvJaYXj40Yg
Department of Transport presentation awaited
The Minister briefed the Portfolio and Select Committees in a joint virtual meeting on the progress in convening the National Taxi Indaba. He said it would resolve the biggest, long outstanding matter of the taxi industry which was formalisation.
The Department of Transport (DoT) gave some background and outlined the problem statement for the Indaba which would be guided by three focus areas: formalisation, regulation, empowerment. The roadmap towards the Indaba had six stages: agenda setting, packaging of discussion documents, launch of the public discourse platform (PDP), stakeholder engagements, Provincial Izindaba and lastly the Indaba.
The second part of the presentation outlined the way forward after the Indaba and covered the funding framework, the future of public transportation and modal integration. A consolidated Public Transport Fund, subsidisation based on modal shares and Modal Integration with an all-mode smartcard were noted.
Members were concerned about the backlog in operating Iicences, law enforcement against the taxi industry, high interest rates for taxi financing, safety initiatives, labour law implementation in the sector and the relations between the various taxi industries affecting processes negatively. Members called for matters that were neglected during the processes of passing the National Land Transport Act process had to be included in this process. A dedicated law enforcement unit and special court was suggested to bring order the Industry.Questions were asked about the Taxi Recapitalisation Programme, the possibility of co-operative banking, the taxi industry paying tax, rail network repairs and what the DoT was doing to support females in the male dominated Industry.
Members welcomed the initiative and looked forward to engaging as stakeholders during the processes. It was hoped that by the time the Indaba was convened there was a consensus by the relevant stakeholders, especially the Industry, on transformation.
The DoT assured Members that the concerns raised would be part of the conversations leading to the Indaba and that it was working on various matters with stakeholders as well as other departments. The battle of ideas on models of empowerment and leadership had to be won on the public discourse platform and at the Provincial Izindaba rather than at the Indaba. The Indaba had to be the place where the consensus that had been achieved was consolidated.
Co-Chairperson Mmoiemang welcomed the Minister and those present. The Office of the Minister had requested a joint meeting to update them on the National Taxi Indaba which was centred on formalising and professionalising the taxi industry.
Minister Fikile Mbalula gave thanks for the opportunity to present. Tabled before the joint committees was the preparation for National Taxi Indaba which dealt with the delicate yet important matter of the taxi industry. The Department was working on the Indaba which focused on regulation, formalisation as well as government subsidy for the taxi industry before Covid-19 interrupted the process. The process had been reignited. Covid-19 further unravelled some of the difficulties which had to be addressed by the taxi industry and South African Government working together.
The Department was tabling the approach and road map to the Indaba which would be launched on 6 August or a later date depending on preparedness. The Department wanted everybody, particularly the taxi industry, local and provincial government, to make inputs on the matter. The Indaba would resolve the biggest, long outstanding matter of the taxi industry which was formalisation.
There had been a lot of criticism of Government by the taxi industry about the lack of subsidy of the Industry, issues related to Covid-19 regulations on capacity to carry passengers and its financial situation. Its financial situation had inadvertently affected how the regulations were implemented regarding the carrying capacity and Government relief. These were all matters that the Department was considering because it felt that it could look at other mechanisms to disburse the resources which would benefit the taxi industry without compromising the regulations and the laws of the country. The discussion on these matters was still ongoing and it had just gone pass the 100% Quantum carrying capacity which had come with negatives such as the shutdown which had to be dealt with.
The main question that had to be resolved was the formalisation of the taxi industry and all other issues such as professionalisation would follow depending on what formalisation produced. The Department was looking forward to this engagement despite dealing with an Industry which was fragmented and bedeviled with disputes and wars over routes and other issues. The Department wanted to deal with these issues in this particular process. He thanked the Committees for the opportunity to table the information. He invited his Political Advisor and the Director General(DG) who would be presenting.
Progress in convening National Taxi Indaba
Mr Lawrence Venkile, Political Advisor, Ministry of Transport, said that he would provide a snapshot of the industry to conceptualise the problem statement that highlighted what the Indaba seeks to address, as well as the public discourse platform, and the roadmap towards the Indaba.
Understanding the taxi industry
The minibus taxi industry was the largest mover of people in the country with 66% market share of all public transport modes. This was the majority of commuters who used public transport. The reality was that the taxi industry remained the one mode of transport which did not a receive a subsidy despite it taking the largest portion of the market. There had been interventions over the years such as the Recapitalisation. Over the medium term R188 million was allocated for the Taxi Recapitalisation. The Department sought to evaluate the Taxi Recapitalisation to ensure that the intervention benefitted the taxi industry.
The modal split of public transport market share was rail at 13%, bus at 21% and taxi at 66%.
The interventions in the taxi industry began in 1995 with the first administration when the Minister of Transport established the National Taxi Task Team (NTTT). This was a process that involved civil society and it held public hearings right across the country. This culminated in the final recommendations presented in 1996 and accepted by government. These final recommendations constituted the pact between the taxi ndustry, civil society and government about how the industry had to be transformed.
There were three major thrusts that had to be addressed arising from the NTTT process which was formalisation, regulation and empowerment. However, 25 years later stock had to be taken on how far the Department had come. Every intervention subsequent to the NTTT ranging from what was contained in the White Paper on Transport Policy, transitional legislation like the National Transport Transition Act of 2000 had its genesis in the NTTT process and what government had committed to. To this day one of the big issues that remained a challenge was unity as taxi violence continued to be the order of the day. The nature of this violence has not changed much from what it was prior to the NTTT with turf wars and fights over routes. Leadership contestations were part of the cause of this violence and conflict within the industry.
A big challenge was the role of associations and the extent to which DoT was able to regulate associations and hold them and their members accountable for their conduct. There was a Code of Conduct in the Transition Act which was enforceable. There had to be a conversation about where the Department had gone wrong in addressing this challenge and arresting the perverse incentives that give rise to conflict and violence in the industry. It was known that one of the major NTTT recommendations was that there had to be a single industry representative body that represented the interest of the taxi industry right across the board.
The evolution of the South African National Taxi Council (SANTACO) and its establishment was as a result of this. Before SANTACO was established in 2001, its predecessor was the South African Taxi Council (SATACO) which was the outcome of negotiations between government and all the mother bodies that had to form one body in 1998. Subsequent to the establishment of SATACO, the National Taxi Association (NTA) emerged. Then Transport Minister Dullah Omar spearheaded a process and delegated the Limpopo MEC at the time to lead the process to bring NTA into the SATACO fold. Every province was involved in this process which culminated in the first national taxi conference in Durban in 2001.
SANTACO was a reminder that the NTA in SANTACO stood for NTA as it was part of the conference and there was report on it but NTA leadership did not win seats. The leadership issue was complex and there were nuances in SANTACO’s own behavior to the extent that it gets seen as an association. The intent was never to create an association as SANTACO was a council which was meant to be the voice of the industry across the board. The NTTT recommendation stated that this leadership body had to represent every subsector in the taxi industry such as meter taxi, mini bus and any other form of taxi. The conversation was if SANTACO was playing its envisioned role at the point of recognition and what was agreed to at the NTTT.
Another challenge was that the taxi industry continued to operate as an informal sector on the fringes of the formal economy. Formalisation spoke to two elements – the business side of the industry was not structured along legally recognised business units such as private companies or cooperatives and as a result did not contribute to the tax base in the form of corporate taxes plus non-compliance with labour laws to ensure workers were protected.
Associations were a challenge for formalisation due to whether they would act within the parameters of a standard constitution as was envisioned by the Transitional Act.
The last part of the problem statement was that the regulatory framework remained weak and ineffective due to a fragmented approach to law enforcement. At one point there were 10 pieces of legislation that regulated public transport. With the promulgation of the National Land Transport Act (NLTA) some of the provinces repealed their legislation and relied on the NLTA but all the provinces had to take the same approach.
The Western Cape, for example, amended the 1977 Road Transportation Act and continued to utilise it, this was not necessarily wrong, but it meant that there was no uniformity on how issues were addressed. The consequence of this was that some provinces like Gauteng continued to have dedicated public transport enforcement units such as old road transport inspectors while other provinces relied on traffic law enforcement. The role of SAPS in enforcing public transport matters was also a challenge.
There were regulatory, enforcement, leadership and empowerment issues such that interventions like the Taxi Recapitalisation programme truly benefiting the industry continued to be a challenge.
Mr Venkile said that the idea was that the Indaba could not be another talk shop but rather a platform for an implementable action plan as a sustainable intervention that ensured the measures put in place over the years where able to be brought to fruition. It was not meant to be another five years of conversation. This was the Minister’s intent for the Indaba. The battles of ideas on the models of empowerment and leadership had to be won on the Public Discourse Platform and the provincial indabas rather than at the Indaba. The Indaba had to be a place where the consensus that was achieved was consolidated.
Public Discourse Platform (PDP)
The launch of the PDP was a major driver towards the build-up of the initiatives towards the Indaba. The PDP was intended for amalgamation of the different perspectives in each of the areas the Indaba had to address. Once the content was in place in the form of discussion documents, which was at an advanced stage, civil society and major stakeholders had to be invited to be part of the conversation. This was a conversation that the Minister was initiating with the industry, key stakeholders and civil society as all of these parties had an interest in the taxi industry.
The major objectives of the PDP was to engage in conversation with stakeholders and civil society on the future of the taxi industry as the largest mover of people in the country; to sharpen perspectives in conversation with industry players and opinion makers on best practices in formalising, regulating and empowering the taxi industry and to build and sustain momentum of public discourse on topical issues as a build-up to the Indaba.
He noted that the conversation on gender based violence in the taxi industry was muted. The Minister was emphatic that this conversation had to be held so that the outcome was not just a product of a conversation between the taxi industry and government but also followed in the spirit of the NTTT and included the voice of civil society which should not be lost.
The launch itself was a means to an end as its aim was to initiate the conversation. It would take place at the time that the PDP was launched prior to the provincial indabas and national indaba. The conversation had to be sustained. The launch would be in the form of a virtual town hall panel discussion streamed on digital/broadcast platforms. The DoT needed to be able to reach out to everybody in the form of radio as well. There were discussions to have the launch simulcast on radio as well.
The Minister would be the main face of the PDP as well as MECs in provinces but experts would also be deployed to lead conversations and setting of agendas. Discussion documents would be released to guide and shape conversations on how far the Department had come in looking at integrated public transport networks and how it saw the role of the taxi industry. The taxi industry would also share its own experiences. The PDP would become a melting pot of ideas and views that shaped and informed the discussion in the provincial and national indaba.
Content of Public Discourse
Mr Venkile said that public discourse would not happen in a vacuum therefore the workstream teams were working on a number of discussion documents to address critical and topical issues. These would be released at the launch of the PDP. The themes of the discussion documents were formalisation, regulation and empowerment.
Formalisation was a two-sided coin. One side dealt with the business aspect of the taxi industry and was about how a taxi business was converted into a corporate entity such as a private company and/or co-operative. Over the years many associations had converted into private companies for example the Greater Alberton Taxi Association (GATA). A number of provinces had co-operatives. These different models were also present in the bus rapid transit (BRT) processes but best practice had to be considered as well as the model that would be most beneficial to the industry.
One of the key drivers that the Minister had been emphatic on was that the empowering model for the taxi industry had to be one that benefitted every single operator even those that had one taxi that went biweekly to rural areas. It had to be a model which did not enrich only leadership but also the operators on the ground.
Formalisation also spoke to compliance with the country’s tax and labour laws which included implementation of the Labour Minister’s sectoral determination and minimum wage for taxi drivers, which was already in place but not implemented. This was an urgent matter as this came up quite sharply with the Covid-19 support package. If the taxi industry had been contributing to the Unemployment Insurance Fund (UIF), its workers would have been covered by it.
Leadership processes and associations remained an issue and had to be standardised through a Standard Constitution. The Transitional Act led to the beginning of a process where it was mandatory for every association to align their constitutions with the Standard Constitution and subscribe to a Code of Conduct which was enforceable by the Taxi Registrar.
With the move from the transitional legislation to the final legislation, National Land Transport Act (NLTA) in 2009, there was a change of the institutional landscape. The Code of Conduct became a very important tool to hold associations and other operators accountable to a specific level of conduct. At the time Provincial Taxi Registrars were quite effective as custodians of the Code of Conduct. How the Code of Conduct was enforced and what penalties were in place for non-compliance had to be discussed.
One of the key issues raised from the contestation between SANTACO and the NTA was that there was no legal prescript that gave SANTACO legal authority as the industry representative structure. Mr Venkile said that when it was questioned if it was desirable to make SANTACO a statutory entity the answer was no because this would water down the benefit of an industry representative body. One of the options on the table was that in the enabling legislation an empowering provision could be introduced where the Minister could recognise a single industry representative body to give effect to the provision. This was one of the reasons the NTTT establishing SANTACO as too many voices increased the chances of violence.
Mr Venkile said that the second discussion document would deal with regulation which was one of the most critical elements for transformation of the taxi industry as it primarily dealt with bread and butter issues. Operating Iicences (OLs) determined an operator’s ability to work in the industry and make money. There was a long history of OLs and evolution from permits in the 1977 Road Transport Act which were issued as indefinite and classified as transferable property. The NTTT recognised that it created a perverse incentive which undermined transport planning as licences, that were not issued according to supply and demand dynamics, created a recipe for violence. Therefore, there was a review of the permit and the current operating Iicence system was created.
There were a number of OL issues some of which had to be addressed before the Indaba began. Some of these were challenges that government itself had created such as the backlog in issuing OLs in a number of provinces due to high application rates and the processing timeframe not being met. Thousands of operators utilised their receipt which proved their application but which did not mean the licence would be granted. This was not the fault of the operators and had to be dealt with.
There were also challenges in the efficacy of Provincial Regulatory Entities (PREs). There were a large number of operators who operated illegally without attempting to apply for OLs and increased the numbers on the ground. There had been a number of proposals from provinces including that the Minister consider a moratorium while the issues were resolved.
One of the OL challenges was the role of the local government sphere. According to the law OLs had to be issued by the relevant municipality. Most often municipalities did not respond to PRE requests which resulted in licences being issued without alignment to transport plans in order to avoid oversaturation.
The institutional arrangements in the NLTA included the establishment of PREs to issue OLs and manage relevant processes. The big question was if the model worked considering a province’s capacity to do that work and that the role of the Registrar had been collapsed into the PRE.
Devolution of the OL function to municipalities and establishment of Municipal Regulatory Entities was being discussed together with the South African Local Government Association (SALGA).
Functioning of the National Public Transport Regulator (NPTR) had been limited to tourist services. However, the NPTR had an extremely important role according to the Act as a custodian of the public transport operations right across the country and modes of transport as well as adjudicating on fares. The Minister had given the NPTR its full mandate and the new regulator appointed from the 1 August would ensure it was operationalised and provide standardised approaches across provinces and municipalities. This had been the missing link to empowering and issuing OLs in the capacity of municipalities. Mr Venkile said that one of the important elements in the NPTR mandate was that the Act enabled it to intervene when there were PREs that had OL processing backlogs. Therefore, the NPTR was critical to addressing the backlog.
Law enforcement was also a focal issue because without enforcement, regulations became weak. The work done by the Road Traffic Management Corporation (RTMC) raised the matter of dedicated public transport enforcement. There had to be sufficient capacity which was sustainable in enforcing public transport law across the country. Support from the South African Police Service (SAPS) varied across the country because issues around public transport were seen as issues around permits. The different configurations of Provincial Departments of Transport where in one province traffic law enforcement was located in a department that was not responsible for transport exacerbated the problem. For example in Gauteng, traffic law was located within Community Safety and not Transport. This created a disjuncture for DoT overall objectives and role of enforcement as an instrument.
Empowerment was part of the biggest debate and the most exciting part that would come out of the discourse. Mr Venkile said that the Minister had given the task team a very clear brief that the Taxi Recapitalisation Programme be re-envisioned. Why the programme was created had to be considered. Addressing the recapitalisation crisis the industry had was at the centre of the Programme's creation. The industry was hand to mouth and there was nothing left to invest back into the business at the end of the day. This gave rise to perverse incentives such as the industry resorting to chop shops when vehicle parts are required and perpetuation of other illegal activities.
The Recapitalisation Programme had to find mechanisms that would enable the taxi industry to access additional revenue while participating in the mainstream economy. To date government had spent in excess of R4 billion and would spend more billions over the next five years on the Programme.
Mr Venkile said that the critical question that had to be answered was who the real beneficiary of the Programme was. The money received for a scrapped taxi did not cover the cost of a new taxi without financing which left operators at risk as well as in a debt cycle. A mechanism had to be found that the funds given through the Programme truly benefitted the taxi industry.
A cooperative bank was being considered as an option for empowerment as well as options such as private entities. One of the models being considered was the Red Dot and Blue Dot in the Western Cape. There were also other models which the industry itself had been initiating. SANTACO had a business arm in the form of a company called Taxi Choice. Whatever intervention put in place had to benefit operators on the ground. The introduction of a subsidy system which included the taxi industry was linked to this.
The last element related to empowerment was professionalisation which would deal with gender based violence, customer care, training and a number of issues that would enable the taxi industry to conduct itself in a professional manner.
Roadmap towards the Indaba
The Indaba roadmap had six stages: Stage 1: Agenda Setting, Stage 2: Packaging of discussion documents, Stage 3: Launch of the PDP, Stage 4: Stakeholder Engagements, Stage 5: Provincial Inzindaba and Stage 6: Indaba. Stage 2 included the release of a 25-year Diagnostic Report which was a high-level report.
Mr Alec Moemi, DoT Director General, said that he would present a glimpse into the future beyond the Indaba on the intricacies which had to be attended to side by side with matters discussed at the Indaba.
A subsidisation formula was being considered where all modes of transport were subsidised based on the modal share of passengers. It was anomaly that the mode of the transport which carried the most commuters was not subsidised. In the last 25 years there had been little change in the framework for supporting and funding public transport. Funds were allocated to the Public Transport Operations Grant (PTOG) but this only considered busses and not taxis operators. As a point of departure, DoT believed that each mode of transport had a role to play. All the public transport modes including meter taxis had to be supported to ensure they played their role in terms of the last mile. To achieve this within the current expenditure ceiling, all existing funding had to be combined into a general Public Transport Fund which would work on a prorated distribution according to modal share. This would occur parallel to Indaba processes and discussions with Treasury on the matter had already begun. DoT would present progress to the Committees in order to consult Parliament and it would consult with SALGA and MINMEC as well to ensure stakeholder involvement.
The future is Integrated Public Transport Network provision
The future of public transport relies on the following:
• Rail becoming primarily a true backbone of public transport with buses and taxis playing a feeder role. On medium routes buses had to carry a heavier load and on non-serviceable routes taxis had to takeover. Smaller vehicles like meter-taxis had to do the last mile.
• Each mode playing its designated role with duplication of modes on routes being discouraged and de-subsidised. To address the burden of oversaturated minibus taxis, DoT would use the carrot of subsidisation to increase modal splits were necessary.
• Each mode being subsidised based on its role and classes of citizens it served.
• Intermodal facilities being shared by all modes for ease of passenger transfer. The democratic government had not invested significantly in intermodal facilities but built on the existing facilities of the apartheid government. It had to go beyond this particularly in larger areas such as in Gauteng. Land reclamation and recapture was required to do this.
• Integration and single public transport ticketing becoming the norm to ensure seamlessness for the commuter.
Government would introduce an all-mode smartcard based on the Europay, Mastercard and Visa (EMV) system prescribed in the Regulations issued by DoT in 2011. SANRAL had been tasked with starting work on this task using its existing infrastructure and capabilities. SANRAL had begun work and was consulting with other public entities.
The smartcard would also allow taxi owners to receive all their income paid by passengers. It would enable participation in the transport subsidy system as there would be an Operator Account linked to their Operating Licence and Business Bank Account. One ticket would be able to be used for all public modes of transport.
Single public transport mobility accounts would be put in place and SANRAL would use its existing e-toll infrastructure to create this platform.
All cities including medium sized towns had to focus more on the implementation of Public Transport Priority (PTP) lanes rather than BRT-lanes as lessons had been learned from BRT lane challenges. This was cheaper and there were cases where this was being implemented such as in Cape Town and Tshwane. The cost of the implementation of BRT lane building and roads was expensive and unsustainable. PTPs were preferred over BRTs.
Subsidisation would be utilised in towns, high density rural, rural and sparse rural areas to encourage full service roll-out. This was intended to address the non-serviced areas as public transport in rural areas was erratic. Mr Moemi said that there had to be a carrot and state intervention where there was market failure.
The future and other disruptive technologies
The fuel levy would fund some of the subsidisation but this would become a challenge as electric vehicles became a reality. DoT had been caught grossly ill prepared for e-hailing. The Department was preparing for the future and consideration of the income gap resulting from the future decrease in fuel levies was part of the round tables with Treasury.
Flying taxis have already become a reality with some piloting in places such as Dubai, New York and Singapore. Flying cars and taxis brought a new dimension to licensing and laws which had to considered. SA had to be prepared for those eventualities.
Mr Moemi said that these were intricacies DoT was working on parallel to the Indaba going forward.
Co-Chairperson Mmoiemang gave thanks and asked if his Co-Chairperson had anything to say.
Chairperson Zwane replied that Mr Mmoiemang was chairing well and that he wanted to hear what the Members had to say.
Mr L Mangcu (ANC) said that he was covered.
Mr M Rayi (ANC, Eastern Cape) welcomed the input by the Minister, his Political Advisor and the DG. He welcomed the progress made by the Ministry and Department about the taxi industry and public transport as a whole. He agreed with the Minister that Covid-19 created some delays for meeting objectives for the taxi industry and public transport. It would be good if from government’s side these areas that had to be sorted were addressed as well as the regulations fast-tracked.
Mr Rayi noted the challenges with fragmentation of the authorities responsible for law enforcement. Government had to tie up these issues even if it meant a new Act. Government had to take responsibility and fix this. The DG had spoken to the subsidy and he was impressed that the Department and Treasury were discussing this.
It would be better if the government had proposals such as the discussion documents. He hoped that this document would be shared with the Committees and there could perhaps be input.
He was concerned that the taxi industry on its own would have the capacity to initiate some of the measures such as recapitalisation that would benefit the taxi industry. Government had to take the initiative to ensure this happened and the industry itself benefited instead of commercial banks.
On cooperative banks, he was not sure if the taxi industry on its own had the capacity to initiate a cooperative bank and therefore would need government assistance.
On the Recapitalisation programme, he asked if it was a permanent feature or did it have a limit as billions were allocated to the programme. He supported that government should be involved to ensure the taxi industry itself benefitted and that other laws were implemented as well.
Mr Rayi noted that labour laws, particularly the sectoral determination, had been mentioned that had to be observed and implemented. Department of Labour inspectors had to ensure the implementation of the sectoral determination.
He was not sure if saying the industry would be formalised meant it would be required to pay tax. What was government’s attitude towards this? Would there be a special dispensation that gradually introduced tax given that the industry had not been taxed before?
There were a lot of items that government itself had to fast track such as the OLs.
Mr C Hunsinger (DA) gave thanks for the presentation and said from the DA’s side this initiative was welcomed. It felt that the objectives addressed the core matters. It hoped this would lead to an improved relationship for the different modes of transport and everyone that shared the road. Based on what had been presented, the DA felt that the methodology was acceptable as well as the different stages towards an inclusive dialogue in which it would participate.
Some concerns were consideration of elements neglected in the development of the NLTA – specifically the Avanza taxi vehicle phenomenon which seemed to be ignored. Yet in townships the Avanza vehicles were increasing daily and it could not be ignored. It was a sad occasion when it was left out of NLTA as it had to be acknowledged as a sector. There had to be engagement concerning its existence and its role in the feeder and trunk routes system proposed. This had to be described.
Another element not adequately described in the framework was the inclusion of employees such as taxi rank marshals and taxi rank managers and taxi “gaatjies” and not only taxi drivers. How all these employee positions were accommodated and formalised in the segmentation of different roles had to be considered to give proper structure to the idea of formalisation and professionalisation.
He asked if at this early stage if consideration had been given to future shareholding between the different modes of transport. It was important that despite the Indaba being about taxis that it had to be emphasised that the other main modes of public transport, buses and trains, had to fit in the future model of integrated transport.
He was cautious to have a view of either the one or the other because choice and options to a large extent were determined by what was affordable for commuters. He was therefore more inclined to favour a position of defined percentage partnership in the integrated transport model rather than to predetermine that a particular route would only be for one mode of transport and not the other.
He also encouraged consideration for not only the Department of Labour to be included but also the Judiciary in order to react to the many taxi murders. He could not recall one taxi murder conviction in the Western Cape. He urged the Minister to consider seriously the Judiciary’s inclusion in processes together with specialised police investigation to give expression to the importance of the public transport sector.
Mr L McDonald (ANC) said the ANC welcomed the presentation and the efforts made to formalise the industry as it was one of the most used and most Black owned industry but least regulated industry in South Africa. He welcomed all the efforts of the Minister, Mr Venkile, the DG and everyone around the table to discuss the formalisation of the industry.
This was the ideal opportunity to add illegal conversions of panel vans to the agenda to get these dangerous vehicles off the road which killed people. Ordinary Black persons needed the taxis to get to work and did not need to get killed in their mode of transport to work.
There were Black entrepreneurs that sent him a letter who wanted to present to the Department and Committees on the battery vehicle they were developing. The entrepreneurs were finding it very difficult to get through all the hoops government had in place. He felt that as the Portfolio Committee and Select Committee there had to be an effort to get these entrepreneurs to brief them and explain what their problems and hurdles were so that they could be assisted and doors could be opened to get battery-operated taxis on the road.
Mr N Paulsen (EFF) gave thanks to the Minister and presenters. He said that currently the backbone of the transport industry was taxis and it was expensive for commuters.
The rail network was mentioned but what was the plan to fix the rail network so that it played its rightful role in the transport network? What was the plan to fix lines such as the Cape Town Central Line which could transport up to 400 000 commuters daily – which was no longer operating? What was the plans to fix the rail network and the Central Line in Cape Town?
Mr T Brauteseth (DA, KZN) spoke about the rule of law and made reference to a cartoon which highlighted the taxi industry having its own laws. There had been various indiscretions especially in KZN. There was an instance where the taxi associations hijacked an executive committee meeting in Durban and held those present hostage after the city started tightening up on taxi operations. Nothing happened to the taxi associations after this. The Go-Durban project had been delayed multiple times by taxi associations which threatened the site worker’s lives if they did not stop working. Once again there were no consequences for the taxi associations.
Mr Hunsinger said that perhaps the Minister had to consider talking to the police to have a special transport investigations task team and request the Justice Minister to consider a special court for a period of time to settle these transport matters so that there could be some sort of hold on the industry.
All the initiatives were welcomed as the taxi industry was a powerful lobby but had unfortunately got out of control and needed to be brought back in line. It had to realise that it was operating in a constitutional democracy where the rule of law was important.
He welcomed the mention of using technology to make roads safer in terms of taxi operations. There was technology similar to those in lifts that had weight sensors which stopped functions and sounded an alarm which could be used to stop overloading which was often the cause of accidents. Taxis required weight sensors and as well as technology that governed speed control. On flying cars and taxis, he said that taxis were already "flying".
Mr M Dangor (ANC, Gauteng) referred to the concept of a cooperative bank and said that community banks had to considered in their totality not only for transport so that risk could be assessed differently compared to commercial banks.
Mr P Mey (FF+) referred to taxi financing and taxi ownership and said that during his oversight in the Eastern Cape, taxi operators explained to him that if one was black listed the commercial banks did not want to help one and the alternative for financing through the taxi industry was very expensive with an interest rate of 21%. Was the taxi industry a financial institution as well?
Mr K Sithole (IFP) said the IFP welcomed the initiative to professionalise the taxi industry. He was concerned and asked why the NTTT was not successful and if its recommendations had been implemented. On the subsidisation of taxis, he asked if the Department was subsidising commuters of the taxi industry or the taxi industry itself.
What was the buy-in from the taxi industry as the failure or success of the initiative depended on this? The taxi industry was made up of defined associations which had to buy-in. He asked for clarity on the involvement of stakeholders such as unions and said that everybody had to be involved.
Had the negotiations between the NTA and SANTACO started? There were different ideas between the two associations and negotiation had to be initiated so that, moving forward, everybody was involved. He thanked the Minister and Department for the initiative.
Ms S Boshoff (DA, Mpumalanga) said that she was covered.
Ms B Mathevula (EFF, Limpopo) had submitted written questions via chat: What effort does the Department put in place to promote gender equality in the transport system as it is still dominated by males? What role is it playing to empower those females already in the industry who face discrimination?
Mr T Mabhena (DA) said that from the DA’s side the initiative was welcomed and it believed that if it was done correctly, it would be a milestone that changed the transport landscape.
He said that perhaps once the discussion document was shared some of his questions would be addressed but he would still ask them. How would the NTA and SANTACO delegations be split at the Indaba? How many representatives would each have? Would there be separate indabas at the provincial level, or would it be consolidated in a process run by the DoT?
He requested timelines for the provincial indabas. He assumed that the high-level document had been completed and hoped it would be shared with the Committees.
Would the Provincial Indaba take the format of hearings? If yes, how many representatives would there be per province?
If the envisioned outcome of the consolidation of NTA and SANTACO was realised, how would the process be managed to avoid a repeat of a clean sweep of leadership positions by either association.
On operating Iicence backlogs, he said it would be a breakthrough for the taxi industry because many operators were operating with receipts. The provincial authorities had to issue licences within a specified time frame but were not doing so. Could there not be a centralised process at national level or allow the national level to take over when this happened?
There would be public submissions but for good measure DoT could perhaps try to benchmark with SANTACO’s Widows Programme so that it could become a DoT sub-programme.
A previous presentation by the DG had identified the problem of the widow having an operating Iicence which was not converted and there was no change of ownership which lead to challenges. The programme was currently run by SANTACO but it had to go to the Department. Perhaps this could be included as part of the overall high-level document.
He agreed with Mr Venkile that creating a statutory body would stifle the industry. There had to be an industry which was well organised but also receptive to the processes of being professionalised. There had to be a non-stifling situation as the industry had to have a full voice when representing member associations. Perhaps there would come a stage when it was absorbed into the DoT.
The example of GATA registering itself as a company was mentioned. Perhaps in the document there could be consideration of shared ownership. Many taxi ranks were owned and maintained by the metros but perhaps there had to be situation where taxi ranks could have some responsibility towards that facility in terms of a maintenance role.
Mr M Mmoiemang (ANC, Northern Cape), Select Committee Chairperson, said he was impressed by the articulation of the current challenges in the taxi industry in the problem statement and also the evolution of the challenges that engulfed the taxi industry as well as DoT’s commitment to resolve the impasse in the taxi industry.
He welcomed the commitment to remedy the informal way the sector operated as well as the Covid-19 situation where R1.3 billion was put on the table to mitigate challenges.
Formalisation was critical with the conversion of businesses into corporate entities and to ensure there was compliance with tax and labour laws of the country.
The Committees appreciated the commitment not only to metros and secondary cities but also the commitment to break the isolation of the rural part of the taxi industry.
He asked if his Co-Chairperson wanted to comment.
Mr M Zwane (ANC), Portfolio Committee Chairperson, said the Minister some time ago appeared on TV saying "Andizi" (01:43) but now it could be proudly said that the Minister was ready. He spoke vernacular. He wanted to appreciate the breadth and length of the briefing and the knowledge presented in this presentation.
When he made his first speech he indicated that he had confidence in the Minister’s capacity and this was one example that the Minister had started to deal and "mop up" in his own words what was happening in the Department. He appreciated the initiative and was sure the same would be seen as has had already been seen with PRASA and other entities which would follow.
He wished good luck to the Minister and his team for the Indaba which would lead to the formalisation of the taxi industry not only for commuters but the industry itself.
Transport Ministry political advisor's response
Mr Venkile replied that the DG would deal with the bulk of the questions but it was important to highlight that in each of the areas flagged for discussions, there were no firm positions.
One of the critical issues concerning rank facilities was how to create a mechanism where the approach to ownership and control of rank facilities was standardised. This would be part of the conversation with the industry.
On OLs in provinces, he said that in terms of the NLTA law if a provincial regulatory entity was unable to issue OLs within the given time frame the NPTR was mandated by law to step in and assist in that process. The DG would respond to the rest of the issues.
On the NTTT, was established by Minister Mac Maharaj in 1995 and the entire framework of what was being done today relating to the taxi industry was grounded on this. Therefore, there was implementation of a number of those recommendations that were accepted by government. The DoT was now dealing with the challenges that arose out of that implementation and weakness as result of experiences over time.
DoT Director General response
Mr Moemi replied about Taxi Recapitalisation that it was never intended to be permanent feature and it has been revised twice. The third generation of it was underway. In terms of the 1996 recommendations, the intent was to have a vehicle that was purposefully designed for safety standards. Due to challenges with the acceptance of the industry on this point, it was abandoned but this was a mistake. The conversation would consider safety matters.
Short cuts were taken by vehicle manufacturers which incorporated some features into existing vehicles but there were limitations. Speed control was originally meant to implemented but only some vehicles were fitted with a maximum speed limitation of 100 kph, but it was not across the board. There was also illegal use of secondhand taxis, which the law prohibited, as they are not allowed to be imported into the country or somehow found their way out of scrap yards onto roads.
The initial idea was to have the operating licence for the operator to be recognised but the limitations were that the licence was not necessarily linked to the vehicle. Over time operating licence holders changed vehicles especially considering the licence was for seven years. Cars that were long distance did many kilometres on the clock and had to be replaced before the licences expired and often secondhand vehicles were bought and used in this case. DoT wanted to curtail all these limitations and do the linkages as part of professionalisation. Different models of ownership were also being considered.
The Department had its own preferred models but it would listen to the industry. There had to be an agreement on a timeframe including the phasing out of the current vehicles towards a new future of a single common vehicle that was owned by the state and perhaps produced by local manufacturers.
Lessons were drawn from the London Transport model and how it phased out yellow taxis in London and managed to register everybody and brought in the current black vehicles which were owned by the London Transport Authority.
DoT certainly wanted the industry to pay tax after the formalisation as this was one of the key objectives of regularisation. Once there was formalisation, professional standards would follow. Subsidisation went with formalisation and if tax thresholds were met, tax had to be paid. There would be a win-win with a benefit to the state and fiscus but also to the operators who would operate in a subsidised environment.
There was a financing agency in the taxi industry called SA Taxi which was a division of SA Taxi and Transaction Capital which raised money in the global markets to buy vehicles in bulk and sell them to those declined by banks. SANTACO through its commercial arm, Taxi Choice, was a stakeholder owning 25% of SA Taxi. Empowerment was a topic for discussion and it spoke to issues of financing. The Minister had engaged with banks who would also receive invitations to the Indaba.
The scenario was that banks did not invest a lot. Banks constituted about 37% of the market share as the rest was carried by SA Taxi Finance alone, with a small percentage of those who sold financed vehicles but it remained that the bulk was financed by SA Taxi Finance.
The DoT was the first to raise concern with SA Taxi about the exorbitant interest rate charged but the weakness was that the thresholds were determined and allowed according to the National Credit Act. This was the disempowering aspect of the issue. The Credit Act allowed for these marginalised people to be charged exorbitantly and this loophole in the law was being exploited.
A new financing model had to be considered. Part of this was the rural development financing institutions of government including the Small Enterprise Financial Agency (SEFA). If SEFA did not have a challenge in financing delivery and courier vehicles, there should not be difficulty in financing taxis. Therefore it was a matter that had to be considered together with the Department of Small Business Development (DSBD). There had been discussions when the Taxi Relief Support Fund was considered where formalisation of the taxi industry was discussed and DSBD was quite keen.
Finance models around this had to be developed. One way of subsidisation was not always to transfer money to the operator but through alternatives such as cheaper soft loans with lower repayments which was a form of state subsidy. Vehicle manufacturing was also an alternative if the state owned the copyright given to manufacturers and gave a subsidy in advance to manufacturers which would reduce costs for operators. This would make financing costs and repayments lower.
Would DoT be at the mercy of the taxi operators once they had been subsidised to keep their beneficial to the commuter? This was certainly the work of the NPTR and part of the discussion. The NPTR had to do its job as it had to be the like the National Energy Regulator of South Africa (NERSA) for public transport. The operators in Eskom went to NERSA and asked it to consider tariffs and then NERSA made a determination. The NPTR had to function in the same way as initially characterised by the law. NPTR had not really done this as it did not have the capacity to do what NERSA does such as its own independent market related studies to determine prices for the SA economy. The NPTR would be capacitated and play its role properly going forward therefore the Department would not be at the mercy of industry.
Mr Moemi replied that the intent was always to subsidise the commuter but the subsidy could not be given directly to the commuter therefore it went to the licenced operators. Licenced operators received a subsidy such as a grant which was the case with buses. Bus operators received a grant and it had to calculate a formula considering kilometre journey and number of passengers which was not an easy science. Many municipalities and provinces struggled to do this and give proper reports to account for the subsidies they were given. Once subsidies were calculated it was anticipated that fares would be kept lower as some input costs had been subsidised and should not be passed on from the operator to the commuter. The Department had to go beyond the formulas to enforcement of prices so that commuters were no longer at the mercy of the taxi industry. State entities had to be capacitated to protect consumers.
In response to Mr Mabhena, he said that the matters raised were still ongoing as part of the Steering Committee and consultation with provinces occurred. The Steering Committee had been expanded to meet on a weekly basis as the process neared. Provinces would give their inputs because patterns of ownership and membership were not the same across provinces. Therefore, the determination of who came to the Indaba was not a problem. There would be one Indaba.
There was an Indaba in Gauteng last year in which both SANTACO and NTA participated. The planning process was considering this. All forums including those that represented meter taxis and all other role players within the sector would participate in the Indaba. The two Committees would also be invited. As the Indaba neared more information and what the final determinations were would be made available.
Minister’s closing remarks
Minister Mbalula said the Department had to recognise that there were challenges in the industry, as well as what needed to be done, to get it somewhere. In the examination of all these challenges it was determined that formalisation, subsidy for the taxi industry by government, professionalisation and regulating the industry were all key.
Would government be able to achieve all these things without buy in from the taxi industry? No it would not, the taxi industry had to buy-in into the Indaba and it had to evolve as a pyramid which started from the base upwards to address the issues and challenges. The Indaba had to consolidate a consensus. It would be a hard discussion and what was presented before the Committees now would be challenged. There was no agreement, issues would be laid bare and there would be different committees to discuss and negotiate with all the structures.
In the unfortunate situation of NTA breaking away, the process would have to be engaged. As a Minister, over and above everything else, he was engaging on the matter as it was important to him to seek a resolution because the DoT could not walk away from the negotiated unity arrangement that existed for the industry as it would be a recipe for a disaster.
He said that Mr Venkile had characterised the origins of the NTTT process and what it had actually produced and in the DoT view this still stood. If there had to be a review of this, the Indaba would pronounce on it.
DoT did not want to go back to a fragmented approach with various associations. SANTACO which was an outcome of the NTTT was by a process that everybody allowed, and it helped DoT engage with the taxi industry. That was why SANTACO was housed in the Department and was supported with R25 million per annum for its operations.
He had inherited this arrangement and if he had to recognise other structures there had to be fundamental reasons why and the process would have to be navigated. DoT wanted districts and provinces to pronounce and consolidate in the Steering Committee. Long before the Indaba, the matter had to be processed.
The Department had its work cut out in the cycle of financial planning for the possible outcome of the Indaba and its implication for the future. In April 2022 DoT wanted to be in a position to implement a process of formalisation of the industry. This process was very important for the DoT as the defects of non-formalisation had appeared when the taxi industry was hit hard by Covid-19 as the industry did not qualify for certain schemes to gain finance during the pandemic.
The funding model of the industry had to be evaluated but this did not mean the current model of SA Taxi Finance was being dismissed. The model was working, and the industry was part of it. Government wanted equity for everyone so that it could meet halfway between the commuter and operators.
Operators had to be able to make a profit and sustain their own financial situation. This had to be done without a fear that financial obligations to debt collectors lead to extraordinary things such as killing people and fight for routes to service debts. It was important for the Department to do this.
Minister Mbalula said that he was sure that at the end DoT would not win all the items on the table but there had to be consensus to start up the process of formalisation of the taxi industry. The process would be very important therefore the Department had briefed the Committees. DoT would brief NEDLAC next and from there other stakeholders would be briefed as well before the dialogue and programme was opened. The Indaba was not only a discussion – as policy also had to be shaped. He gave thanks for the platform given to the DoT.
Co-Chairperson Mmoiemang thanked the Minister for the comprehensive response and the Members for their engagement. On the point raised by Mr McDonald, he hoped the Minister would be able to assist him for him to respond to the entrepreneurs.
He gave a recap of the presentation. At the beginning of the meeting it was indicated that the brief was to ensure that the two Committees were kept abreast of developments concerning the Indaba. The origin and background to the matter was raised. The Public Discourse Platform as the convergence point for discussion was explained. The discussion documents would form the basis for the discussion as well as be the centre for the content. The formalisation of the taxi industry was key. A code of conduct within the industry to ensure a semblance of unity was raised. Law enforcement as a challenge was raised. Empowerment was at the centre of the reimagined taxi industry. The rationale behind the Recapitalisation was provided. The stages of the Roadmap to the Indaba were also outlined.
The progress tabled before the Committees was appreciated and the Committees were looking forward to the continued engagement appreciating its role as a stakeholder. He hoped that by the time the Indaba was convened there would be a semblance of convergence and unity in the rationale behind the transformation of the taxi industry. He expressed gratitude.
Mr McDonald asked about a decision for calling a meeting about the battery-operated vehicles.
Co-chairperson Mmoiemang said a decision had been taken but the Ministry had to provide guidance as this would place the Committees in a better position to advance the programme.
The meeting was adjourned.
No related documents
Mmoiemang, Mr MK
Zwane, Mr MJ
Boshoff, Ms SH
Brauteseth, Mr TJ
Dangor, Mr M
Hunsinger, Mr CH
Londt, Mr J
Mabhena, Mr TB
Mamaregane, Ms ML
Mangcu, Mr LN
Mathevula, Ms B
Mbalula, Mr FA
McDonald, Mr LE
Mey, Mr P
Ramadwa, Ms MM
Rayi, Mr M
Sithole, Mr KP
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