During the 1929 Road Motor Commission, the South African government decided that the country's transport system was unrestricted and disorderly. The commission's chairperson, JC le Roux recommended that all public transport be subjected to public sector ownership. And so the Motor Carrier Transportation Act of 1930 was passed.
Under this legislation, the carrying of people with the goal of making a profit required a state-issued permit. Black drivers who applied for the permits were denied certification. Without permits, the ownership and management of transport facilities by black people was then considered an offence. Emerging black entrepreneurs in the bus and taxi industries were then forced to surrender their businesses to their white counterparts.