Johannesburg road users were stuck in a queue of great frustration last week when Joburg taxi drivers decided to close down all major highways in the city and bring the Johannesburg economy to a standstill.
The greatest frustration of the South African taxi industry, however, is not the temporary inconvenience to middle class and well-off South Africans during a one day strike. The greatest frustration is to those who have to make use of the taxi industry on a daily basis.
The big question here is how do we best remedy the frustration of taxi owners, taxi drivers and taxi commuters?
Some 15 Million South Africans make use taxis on a daily basis; 70% of those commuters are commuting to and from their place of work and/or school. They usually travel from city outskirts and townships into business districts and suburban South Africa.
In contrast, 9 million South Africans make use of state funded bus rapid transit systems while only 2 million South Africans make use of state funded train and railways transit systems.
So it is clear that the taxi industry carries the heaviest weight – unfortunately, without any state assistance and state funding. It’s high time the state steps in.
The cost for keeping a taxi on the road is continuously rising for taxi owners. They deal with incredibly high interest rates, high insurance premiums, association fees, traffic fines, vehicle maintenance costs and driver salaries – so much so that their margins are shrinking exponentially.
They have one of two ways to deal with this problem. They either have to transfer those costs onto commuters by increasing taxis fares or they can protest against financing structures to reduce the high instalments they have to pay on their vehicles monthly. Both these actions are exhausting and detrimental. Here’s why.
Increasing the cost for commuters is undesirable because the vast majority of South Africans who make use of taxis are lower middle class to poor South Africans and simply cannot afford it. The will stop using taxis when the costs become unbearable and opt for the cheaper and more inconvenient options, presumably Metrorail trains.
Protesting against the vehicle financing structures is also undesirable – taxis are innately high risk vehicle. Not because everyone else seems to think taxi drivers are uncivilised hooligans who don’t respect the road, but simply because they spend a lot of time on the roads, so naturally they are at higher risk for road accidents.
That means that financiers are at risk of losing their money because a taxi owner can only repay a loan insofar as their taxi remains on the road and makes money. When a taxi is no longer on the road, it stops making money and the taxi owners cannot repay their loans. As a result, financiers try and make their money back as quickly as they possibly can, resulting in high monthly instalments.
So what now? How can the taxi industry find relief? The answer is not so far-fetched. State funding and subsidising.
This is already in practice in our neighbouring country, Botswana. There the state has taken certain actions to ensure their commuters are safe and don’t have to pay ridiculously high taxi fares and that taxi drivers and owners make decent money from their operations by subsidising the taxi industry through various means – this is being administered by their Transport Ministry.
Botswana’s minister of transport has even gone as far as capping the taxi fares by regions. In Gaborone you would pay no more than P3.50 to go just about anywhere in the city. For the rand equivalent of P3.50 you can’t even get on a taxi in Johannesburg.
This means the working class of Gaborone spends less money on transportation and has more money available to spend in their homes (and perhaps even on upward social mobility). Students aren’t additionally constrained by transportation costs, and unemployed people can job hunt much easier through greater mobility.
At a principle level, why should the state fund/subsidise the taxi industry?
Mobility lies at the heart of social welfare. The cost of transportation is simply too high for poor South Africans, particularly when more than half of our population has to get by with less than R3000 per month.
Moreover, poor South Africans (particularly black South Africans), usually have to travel much further to access their places of work because of the legacy of apartheid spatial planning.
Importantly then, at the heart of the state’s social welfare program lies the guiding principle of undoing the legacy of apartheid – and so, if apartheid spatial planning is the reason poor black South Africans cannot access universities, colleges and work places with ease then the government is mandated to step in.
The government commutes a combined 11 million people daily on trains and busses, but that’s simply not enough, particularly when most commuters make use of taxis. Moreover, taxis reach parts of towns, townships and cities that busses and trains simply don’t reach.
How can the state financially assist the taxi industry?
The government can start by offering financing assistance to taxi owners at much lower premiums and at a much lower interest rate, ideally a 0% interest rate. In turn, it can dictate price caps on taxi fares for certain key routes to assist and protect poor commuters. By doing that, the government would directly address the socio-economic wellbeing of poor South Africans by improving their mobility, which lies at the heart of social welfare.
- Dickson is a socio-political analyst and an award winning competitive debater. Follow him on Twitter: @Oliver_Speaking.
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