Taxi industry impasse on COVID-19 lockdown regulations


07 July 2020

Meeting Summary

Audio: PC Transport 7 July 2020 

Video: Taxi industry impasse on COVID-19 lockdown regulations

The Portfolio Committee met with the National Taxi Alliance (NTA) to discuss the impasse pertaining to the implementation of COVID-19 Lockdown Level 3 regulations. The NTA expressed gratitude to the COVID-19 pandemic for finally affording it an opportunity to secure an audience with the Transport Minister. The NTA was greatly concerned that the taxi industry would be at risk of collapsing if proper mitigation efforts are not made soon. Among the challenges was the need to return to full capacity loading of taxis as they are not making a profit with the 70% capacity required by lockdown regulations. If government could provide the 30% shortfall, the taxi industry would abide by the regulations. However, the three-month payment holiday by financial institutions had ended and it had to avoid the repossession of minibus taxis.

Committee members asked questions about the Taxi Recapitalisation Programme, as well as the formalisation of the taxi industry. They asked if the taxi industry has received support from government for PPE as well as funding. NTA replied that the Taxi Recapitalisation Programme is still facing major challenges and the formalisation of the Industry will further discussed and finalised through a Taxi Indaba due to take place when the country is at Level 1 Lockdown. They have received PPE support but have not received any form of funding from government. Members asked about the R25 million that had been given to NTA but the NTA was unaware of this.

The Committee committed that it will raise the taxi industry concerns with the Department of Transport.

Meeting report

National Taxi Alliance (NTA) briefing
Mr Francis Masitsa, President: National Taxi Alliance, stated that the advent of COVID-19 in South Africa created a unique situation that required support from everybody  to harness the danger engulfing the country. The Level 5 Lockdown was set by the President during his proclamation of the National State of Disaster. The NTA was concerned at that particular stage as it had not met with the Minister of Transport Fikile Mbalula since his May 2019 appointment. The NTA complained to the media about its concerns about the Minister being absent and 'missing in action'. However, after the press conference the Minister did surface and apologise and the NTA accepted his apology. Thereafter both parties managed to establish a rapport and are still engaging on various concerns and there is general understanding between the NTA and the Minister. The Minister has since visited several taxi ranks together with Portfolio Committee members.

However, the total shutdown had a serious knock-on effect on the taxi industry as during Level 5 the taxis did not operate. Only about 10% of taxis operated, carrying essential workers to and from work and operating only very limited hours while carrying 50% of their loading capacity. Later on, the taxis were allowed to carry 70% of loading capacity. This meant that a 15-passenger taxi carried only 9 passengers, which led to a financial shortfall in the industry to date.

The NTA has continued to engage the Minister and his Department in an honest and sincere way. The NTA informed the Minister that the repayment instalments for a 15-passenger taxis range from R15 000 to R13 000 per month which meant that the taxi industry would fall into arrears in the first two months of lockdown. NTA has approached the Minister and said that it is high time that the full loading capacity of the taxis be restored – this argument is based on precisely the advice and counsel of the World Health Organisation (WHO) as well as the National Corona Command Council (NCCC). According to the WHO, wearing a mask was specifically intended for situations where social distancing is impossible. It was on this basis that the NTA pleaded with the Minister that the full loading capacity of the taxis be restored. The NTA also posed a question to the Minister about the difference in the infection rate in scenarios where taxis load 70% capacity and others load full capacity. Science has failed to respond to that question and even those against taxis loading full capacity have failed to provide proof of a scientific opinion on this matter. “Patient zero” in China was only able to infect many people because there were no mitigating factors, protocols and procedures put in place at the time.

The NTA also pleaded to the Minister that long-distance taxi operations should resume, including intra-provincial, inter-provincial and cross-border travelling.The Minister was very sympathetic to the NTA and agreed to forward these requests to the NCCC. NTA has since been waiting to hear a response from the NCCC on this particular matter. The Minister responded to NTA that despite their displeasure about the lack of relief funds from government, Treasury has no funds available to set aside and add to the funds already provided. Secondly, the Minster said that the opening of borders and cross-border operations was out of question from the NCCC, simply because the country would not cope with the influx of foreign citizens infected with COVID-19, in terms of United Nations protocols and treaties, as government would have to provide services for them.

Four meetings have recently been held between NTA and the Minister. At the first meeting on 17 June, the Minister and his department reported that the NCCC found that the public transport matter should not be looked at in isolation of other matters. The second meeting on 29 June the Minister reported to NTA that the taxi industry concerns are receiving attention and that he will report back sooner rather than later. On 2 July the Minister informed the NTA that during the NCCC meeting, a letter received from the Colleges of Medicine of South Africa (CMSA) expressed concerns about the 100% loading capacity. Consequently, a two-person committee comprising the Transport Minister and Health Minister, Dr Zweli Mkhize, was appointed to meet with the taxi industry and discuss the issues it raised and look at the protocols to mitigate those concerns. On 4 July, the NTA National Executive Committee met with the Transport Minister and Health Minister accompanied by Prof Karim who is part of the Ministerial COVID-19 Advisory Committee. There was an engagement on the issues and the two-person committee was to take the agreement reached on protocols to mitigate the CMSA concerns to the NCCC. He said that the NTA felt that it had presented a compelling argument at that meeting and is looking forward to a positive response.

Upon receipt of the Portfolio Committee invitation for the current meeting, Mr Masitsa noted that the meeting agenda referred to an impasse, a deadlock and a dispute. The NTA’s position is that because the NCCC has not pronounced its position on the matters presented, the NTA has does not have a position. Consequently, the NTA will pronounce its position after finality has been reached by the NCCC. However, as lawful citizens the NTA reserves the right to pursue all legal avenues in the case they feel aggrieved. At no stage will NTA agitate disobedience nor promote insurrection and sabotage, nor at any stage will it make a pronouncement on its position until the Minister has reported on the progress and otherwise.

Mr Masitsa appealed to the good sense of judgement and honesty of the Portfolio Committee to help the taxi industry in this matter because if they are to be expected to operate at 70% capacity that would lead to the demise of the Industry. It is not in the interests of South Africa to kill the prime public transport mover responsible for nearly 70% of the commuting public in the country. The taxi industry is a prime public transport mover that has not been recognised and subsidised since the advent of democracy. This situation precedes democracy, as the industry faced a similar situation during Apartheid, but the industry has continued as citizens and patriots to transport the people from the communities in which they live. For every public transport trip the subsidised mode receives a subsidy at the expense of the non-subsidised mode, the taxi industry. The taxi industry has been providing a social service, as it has been subsidising the majority of citizens in the country. To the citizens, the taxi industry is a government that provides for their needs.

The role of the taxi industry in this country is creating nation-building because in spite of all that the industry is faced with, it remains resolute, and committed in supporting every endeavour and effort to help South Africa get out of the morass it finds itself in. It is no sin for the commuting public to have selected the number one public transport mode they feel works for them which is the taxi industry. They are supporting the taxi industry with their feet and the percentage of how much the taxi industry carries is sufficient testimony to that. The health considerations presented by the Colleges of Medicine of South Africa is critical. However, there are also economic as well as social interests and these must be balanced out. Therefore, a pragmatic approach towards resolving this issue is critical.

Mr L McDonald (ANC) asked if the NTA has received an allowance from the Department of Transport or other government department for Personal Protective Equipment (PPE) and how much PPE they received. He asked if about taxi drivers who have tested positive for COVID-19. He noted that if the taxi industry was formalised it would have been so much easier to claim large sums of money from tax funds and that would have alleviated a big problem for taxi owners. He thanked the NTA for not being disobedient about the regulations during the interactions with the NCCC.

Mr C Hunsinger (DA) thanked the NTA for its willingness to engage and said that it is important that they work together as the country is faced with tough times. From government’s side and from the service provider’s side, both have to be objective in providing a particular service and in this case that is public transportation. The taxi industry drives in excess of 90 billion kilometres per year and that is a huge contribution in the public transport sector. The taxi industry is 75% of everything that we understand about getting to work, to school and universities, and this is a big deal considering the work of other sectors of transport. He asked the NTA to provide information about the particular WHO document that informed the NTAs decision to load taxis at full capacity rather than the current regulations requiring a lesser capacity. He did not think there was a WHO document that suggests that when wearing a mask, physical distancing can be ignored. He asked the Chairperson to provide insight on taxi industry formalisation ideas in terms of possibility and content. There is a huge concern about labour and employment conditions especially for the drivers and rank managers. It is high time that minimum standards of employment should be considered. He asked the Chairperson to provide insights about those issues. He asked the NTA what they have done with the R25 million allocated to the taxi industry by the Department of Transport. He asked about the procedures followed when considering taxi fare increases. He asked for an explanation of the panel van conversions into taxis. Have they explored e-hailing to make it easier for people to hail a taxi via cell-phone?

Mr K Sithole (IFP) appreciated this platform for engagement with the taxi industry and noted that this is the only industry that is being run by Black people. The NTA President’s briefing shows that there have been a lot of suggestions proposed to the Minister and the NCCC for consideration. He asked for more clarity on the impact that 100% loading capacity will have. He asked how the NTA would respond if Parliament were to subsidise their commuters as they have previously done with Metrorail and the bus industry. He asked for NTA’s opinion on the formalisation of the taxi industry.

Mr T Mabhena (DA) noted that as he was raised by parents who were in the taxi industry. He appreciates the work the industry has done and their contribution to the economy of the country. The Portfolio Committee needs to do oversight over the Executive. The taxi industry are stakeholders, as such the Portfolio Committee will engage them in that capacity. Therefore, when the Portfolio Committee engages the taxi industry, the objective is not to undermine them, but rather it is an opportunity to get clarity on some of the questions they may have had in the past which were not clarified. He asked for the number of taxi owners within the NTA that have registered as a business and are behaving as such. He asked what the NTA’s stance is towards those people disobeying government by loading full taxi capacity despite government’s directive not to do so, and what actions are going to be taken against them. He asked if there are other studies NTA has consulted besides the WHO about loading taxis to full capacity. He asked if NTA receives any form of financial support from the Department, and if so, how are they utilising those funds and when last time they received this.

Mr Mabhena asked if the NTA enjoys support in applications for new Taxi Operator Licences from the Department of Transport. The reason for this question is that the Portfolio Committee did an oversight visit of four major taxi ranks in Gauteng. One of the challenges was that many taxi operations are still waiting for their operators licences. Therefore, has there been engagement with the Department of Transport on this and what was the outcome of those engagements? The Portfolio Committee understands that the taxi boards continue to abuse and exploit the taxi industry and as a result, taxi operators still cannot get their operator licences and taxi drivers are expected to pay bribes to be able to continue working. There are many instances that have been cited where the taxi boards are blocking profitable routes, knowing very well that operators will have to use alternative routes or be brave and pay bribes. He asked what other abuses are being faced by the NTA at the hands of the taxi boards. He asked how often the NTA screens and tests its members for COVID-19. When the Portfolio Committee went on oversight, many of the members were adhering to the COVID-19 regulations and that needs to be commended and applauded. Lastly, he asked if any of the NTA member associations are taking part in the Taxi Recapitalisation Programme.

Ms N Nolutshungu (EFF) stated that there is no running away from the fact that the 100% loading capacity requested by NTA will increase the number of COVID-19 infections, but perhaps there needs to be other ways of compensating the taxi industry. The solution to that problem lies with the leadership of the taxi industry, such as the South African National Taxi Council (SANTACO) and NTA. The formalisation of the taxi industry is something that should be driven by the leadership of the taxi industry. COVID-19 has exposed a lot of abnormalities in South Africa that need to be dealt with and one of those is transport subsidies. Given the 70% market share of the taxi industry and it being the only public transport system not subsidised, this is an opportunity for its leadership to engage government on that, specifically the formalisation of the taxi industry and subsidisation of all modes of transport. NTA needs to initiate talks with government on subsidies and present a model to government on how they want the subsidisation to be done. This is because the way it is being done currently through converting taxis into formal business through the Bus Rapid Transit (BRT) system has caused a lot of resistance. This is because it is has been prescribed to the industry, hence the resistance. Therefore, this is an opportunity for NTA to put together a proposal and present it to government, and not focus only on the COVID-19 relief fund. The billions lost in this country due to corruption could have been easily diverted to subsidies for the taxi industry. Therefore, NTA needs to  look at this COVID-19 challenge not in isolation but also look at the bigger picture and use this opportunity to engage with government on what can be done to formalise and subsidise the industry. SANTACO and NTA need to be innovative, for example, Uber could have been their initiative but that has not been the case, and as a result someone in America is receiving money from South Africans. Therefore the taxi industry needs to look beyond the small fights and build a future for itself, as it is the only business that was started by Black people on their own, without government assistance.

Ms M Ramadwa (ANC) asked for the details of the other matters discussed between NTA and the Minister.

Mr Masitsa welcomed the comments and questions. The first time NTA met with the Minister was after the COVID-19 outbreak and before that he had been very elusive. Since then the gap has been narrowed between the Minister and NTA. The new Minister seems to be quite energetic and interested, and the NTA’s willingness to engage him has been growing daily. The meetings between the NTA and the Minister have always been virtual due to the lockdown regulations, so not much has been discussed in the meetings besides the current problems and a promise that soon there will be a Taxi Indaba where the formalisation of the industry will be discussed.

The NTA has been yearning for the formalisation of the taxi industry and its willingness to participate and engage has not been reciprocated by anyone, until Minister Fikile Mbalula who has demonstrated intent and willingness to truly engage on this matter. The taxi industry, through the design of the apartheid government and the then Minister of Transport decided to deregulate the industry and created this informal situation that has continued to date. It is painful that since the inception of democracy in the country, there has not been any headway on this subject. The NTA wants the formalisation of the taxi industry "yesterday", and is more than willing to engage on these issues.

One of the formalisation issues that NTA has communicated to previous Ministers is the operating licence. This is a permit and permission to operate. It is not a business licence and carries no business value. The intention of NTA is to have the current permit transformed into a business licence with value so that if and when they want to bow out and sell their business, the people who are going to buy the business are going to buy the goodwill that they have created over the years. The registration of drivers is then a formality. After all is said and done the NTA is more than willing to comply with any statute and law governing this country.

It is true that there are taxi operators and drivers loading at full capacity, and when that was brought to the NTA’s attention it convey a message to all its structures that they have not declared a dispute with the Minister and have not called on them to go on strike and to defy the laws of the country.

On how many NTA members have registered their business, Mr Masitsa replied that he has not done research on this. However, their previous engagements with former Transport Ministries over the years were not reciprocated, hence the present state. If it were not for the COVID-19 outbreak, he is not sure if there would have been any engagements with the Minister, but luckily they are currently engaging on a regular basis. He noted that the National Taxi Alliance has not received a single cent from the National Department of Transport for support. The NTA does not know anything about the R25 million. This demonstrates the distance between the NTA and the Ministers over the years up until now.

The illegal conversion of panel vans is something that the banks engaged in and were allowed by the government in order to stifle off huge sums of money from ignorant clients. The conversions were done by banks and NTA is glad that the manufacturers have disowned that process and declared it illegal and it was done without their consent. However, every indication expected of the NTA after the intervention of others including the Portfolio Committee, was followed and NTA advised its members to have their vehicles cleared.

On the abuse by the operating licensing boards, Mr Masitsa replied that they have such power that they are a law unto themselves. The NTA will require each of its structures in each province to submit a document on this and will provide the Portfolio Committee with that information. This is because the abuse has led to the deaths of multiple people and operators because some routes were invaded due to the favours received from some people within the operating licensing boards.

COVID-19 testing of drivers is one subject that was dealt with in the two-person Ministerial Committee, and the protocols, systems and structure have been put forward through the assistance of Prof Karim and others helping to come up with these measures and protocols.

If the 100% loading capacity for taxis is not met, this will lead to the death of the taxi industry. NTA’s initial suggestion was that it was more than willing to continue with 70% capacity as required by COVID-19 regulations but government should assist with the shortfall by subsidising them. However, they were informed that government does not have money to subsidise the taxi industry. When looking at what could be done in this situation, NTA as well as the two-person Ministerial Committee and Prof Karim agreed that the suggestions were impractical. There is regular washing of hands, sanitisation of vehicles, social distancing and where it is impossible to practice social distancing, people need to wear face masks. This is why everyone is obliged to wear a face mask when they leave their house because the possibility of contracting the virus outside is greater. Social distancing is only applicable in situations that are formal.

Mr Masitsa said that what the NTA has brought to the table is that if government could subsidise the 30% shortfall in taxis, they would be more than willing to continue carrying at 70% capacity. The NTA at national level do not regulate the taxi fares, rather they are agreed upon at the operational level and different areas are influenced by different situations. What has been agreed as a way forward in this case is that fares are not to be raised unless all of those operating on a particular route are in agreement to prevent unnecessary conflict and deaths. The petrol price does not affect taxi fares and the NTA is against drivers requesting passengers to pay more to cover the 30% shortfall. NTA has received PPE from government and from partners such as Toyota South Africa but it is unable to quantify that at the moment.

Mr Alpheus Mlalazi, General Secretary: National Taxi Alliance, replied about the formalisation of the taxi industry, saying the government at a particular time legislated the regulation and control of the taxi industry to bring in a semblance of control and formality in the industry. The government requested that every taxi association in the country is registered with a provincial registrar; there are routes registered under each specific taxi association and all those routes operate with registered taxi operators. This means that the database of registered taxi operators sits with each Provincial Registration Entity (PRE).

COVID-19 found the NTA in that kind of formality which was introduced by government and it would be incorrect to say that the taxi industry is not formalised as the government spent a lot of resources through that intervention. Hence the operating entities are called taxi associations and their taxi routes are registered. NTA appreciates the fact that the taxi industry would have to migrate to a situation whereby they are treated like any other company. The Minister has committed to a Taxi Indaba once the country moves to Lockdown Level 1. However, it is unfair to say to the taxi industry that if they want to access relief they must present themselves as a company because COVID-19 found them with that semblance of formality in terms of the regulation and control registration. At the Taxi Indaba the NTA will accept total formalisation of the taxi industry while taking into consideration expert advice as they are already engaging with the experts to prepare themselves for the Indaba and to make informed and sound decisions.

Mr Mlalazi said that the taxi industry is not charging market related fares but instead is subsidising the commuting public, which means that by losing a single passenger they are not making profit. When loading at 70% capacity they are not even breaking-even. Now that the payment holiday granted by some financial institutions is over, banks are expecting instalment payments and it is highly likely that most of these taxis are going to be repossessed. NTA has been pleading with government to help find rationality in balancing the COVID-19 cap and freedom of trade and occupation. This is very important to avoid a future where the majority of the citizens becomes charity cases for the state. It will take six months to a year for the taxi industry to recover, hence NTA is saying as much as they appreciate the inclusion by government in their relief fund, it barely touches the surface of their problems. Some of the COVID-19 regulations have not been beyond scrutiny. For example, experts say that the virus affects people of a certain age; however, when the regulations are made in most cases they are blanket regulations. In addition, the virus came into the country via airplanes, and yet airplanes are now allowed to operate at full capacity, which is not the case for the taxi industry. This is not a means to criticise the regulations but rather a way to show that because the virus caught everybody off guard, there will be inconsistencies that are not intended.

On Taxi Recapitalisation and panel vans, there was an agreement between government and NTA that the panel vans that were deemed unsafe and unroadworthy be returned with a valid operating licence and the person who returns the vehicle would receive a scrapping allowance. However, by the time that decision was made, the taxis were already a year or more off the road, which meant that they did not have a vehicle licence to be on the road or operating licences so they could not scrap them. The Taxi Recapitalisation Programme failed government and the NTA made a presentation on that to the previous Portfolio Committee and received no workable response out of that. There are a lot of parked panel vans and NTA members do not know what to do with them because they are unable to get licences to scrap them. Black people in this country have not been favoured by many of the economic laws and by allowing e-hailing services to continue operating the way that they do, government is deregulating public transport. The taxi industry has absorbed so many people who would be unemployable in many sectors and if government takes their taxis away, those people’s families and the generations after them will be charity cases for the state and the state will not afford that. We need to be careful when embracing concepts that come from overseas because they may lead to someone losing their job, in the name of development.

Mr Dumisani Mpanza, NTA Treasurer, asked how it is possible that R25 million cannot be accounted for.

Mr Mabhena asked what the uptake is on the Taxi Recapitalisation by the NTA member associations and how receptive are they to Taxi Recapitalisation. He asked for an indication of the number of member associations who are on board.

Mr Mlalazi replied that at the initial stages of the Taxi Recapitalisation Programme, the NTA went against certain things about the programme and their members held back. It was the first time in the history of South Africa where the minibus taxi industry was given an assistance of R7.7 billion which was unprecedented. They decided that they needed to meet government on this. However, that project was hijacked and used for other interests instead of its intended use. Currently, there are many members who have registered to scrap their vehicles but some of those applications have not been finalised as those who have registered do not have operating licences to present. NTA suggested to government that to take the old unsafe taxis off the road, government must instruct the provincial regulatory entities to issue an operating licence for scrapping only, but that has not happened. What went wrong with the good gesture from government was that it was hijacked and Ministers and other people in government did not want to the taxi industry. Therefore, the NTA wants the programme to continue, but it must be changed so that it is accountable.

The Chairperson expressed appreciation to the National Taxi Alliance for the briefing and its agreement to engage with the Portfolio Committee about its problems. They need to take themselves forward with the help of government in transforming the taxi industry. The taxi industry must stop fighting and concentrate on what will assist it to make money. He stated that the Portfolio Committee will engage with the Department with this information they have received. The Committee appreciates that the NTA continues to be law abiding citizens even though they have a grievance, and that they are willing to allow government to lead the way in finding solutions to their problems. He requested that the National Taxi Alliance continue engaging government and honouring that invitation.

The meeting was adjourned.