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Taxi Formalization In South Africa: A Roadmap To Success

The recent taxi strike in Cape Town was a reminder of the importance of the taxi industry to the city’s economy and to the lives of its residents. The strike brought the city to a standstill, and it highlighted the need for the taxi industry to be formalized.

The strike was also a reminder of South Africa’s tendency to discuss plans without implementing them. Despite numerous discussions and statements from current and former ministers stressing the need to formalize the taxi sector so that it can be integrated into the overall transportation system, the formalization process remains a topic of ongoing conversation.

The question arises: why has progress been elusive, even though the end goal is clear? Why does taxi formalization perennially remain in the realm of discussion? The Western Cape is well-positioned to champion this process. But what would a typical formalization process look like, and who would be responsible for which roles in making taxi formalization a reality?

To begin the formalization process, it is crucial to set up a licensing and regulatory department that facilitates a comprehensive procedure for taxi operators and drivers. This would involve conducting background checks, vehicle inspections, and ensuring compliance with safety standards, all culminating in the issuance of permits.

In the Western Cape, this entire process is efficiently managed by the Provincial Regulatory Entity (PRE) in partnership with the City of Cape Town (CoCT). The PRE uses a well-equipped online portal for application submissions, permit issuance, and seamless communication. This setup is already complete.

Fare Regulations

Currently, the responsibility for determining the fare per commuter for each trip within their respective routes lies with the associations. This may seem like anti-competitive price-fixing, but it actually ensures an equitable pricing structure. The prices are set to ensure that each taxi owner along that route receives a fair portion of the economic benefits.

In the case of Cape Town, for example, the dissemination of these pricing details and other administrative duties should fall under the purview of Umanyano Travel Service’s eight regional companies. In the spirit of “bias to action,” initiating this process could commence with the company that exhibits the highest degree of organizational readiness.

Driver Training

During the recent taxi strike in Cape Town, the absence of the taxi industry suppliers was noticeable. They stood by as detached observers, awaiting the strike’s conclusion so that they could resume profiting from the industry.

Take Toyota South Africa, for example. With a commanding 97% market share in the taxi sector, their contribution in terms of corporate social responsibility within the taxi industry is underwhelming. Shouldn’t we expect more substantial engagement from them, considering the significant number of Toyota Quantums and Sesfikile taxis purchased by taxi owners? And what about the insurance and telemetry sectors?

Facilitating driver training is surprisingly straightforward. A gathering of CEOs (led by Andrew Kirby, akin to the CEO initiative) should convene on a symbolic bridge, where they establish a Taxi Driver Fund. These organizations would contribute actual funds, not mere pledges, to this initiative.

Upon a taxi owner’s acquisition of a taxi, they would receive a driver training voucher. This voucher could be redeemed at a Technical and Vocational Education and Training (TVET) college for a comprehensive three-month driver training program. Successful completion would culminate in the award of a three-month National Qualifications Framework (NQF) certificate.

Vehicle Standards

It is noteworthy that taxis in the Western Cape consistently maintain a higher level of condition and quality compared to those in other provinces. The recent instances of taxi impounding should be understood as primarily addressing issues related to operating without proper permits, rather than being indicative of any deficiencies in the standard or quality of these taxis.

Insurance and Liability

This process is already in place and happens right at the beginning of a taxi owner buying a taxi with comprehensive insurance. Each taxi owner is required to purchase a once-off annual liability cover, passenger cover, and also short-term insurance for their vehicles.

Technology Integration

Recent initiatives such as Blue Dot and Moja Cruise, which aim to incentivize drivers and enhance the taxi industry, underscore the sector’s eagerness to leverage technology to boost competitiveness, enhance transparency, and streamline driver rating and management. Additionally, the adoption of disruptive technology solutions by companies like Quickloc8, such as TAXICAM and Route Office Administration (ROADS), further reinforces this trend. Taxi owners use these technology solutions to oversee drivers, monitor taxi movements, remotely control operations, and access daily revenue reports on a per-taxi basis. The ROADS system gives route offices a comprehensive overview of all taxis within their routes, allowing them to monitor route adherence, driver evaluations, storage of member documents and insurance records, and the aggregation of performance metrics for the route as a unified business entity. Integrating technology from the taxi industry and generating insightful reports from this sector can be a seamlessly achievable endeavor.

Complaints and Feedback, and Public Awareness

Addressing this aspect is similar to picking low-hanging fruit. The taxi industry has a proven track record of managing regular commuter complaints and feedback through their route offices. Establishing a streamlined system where commuters can report concerns in real time without having to visit a route office presents a straightforward opportunity. Modern communication tools such as instant messaging services or USSD platforms have evolved to make this efficient. Each taxi could be assigned a unique, prominently branded number (both internally and externally) for commuters to use when submitting real-time complaints and feedback. Tailored public awareness campaigns can effectively inform commuters about this service. Mission accomplished!

Regulatory Authorities

In situations like that of the Western Cape, the 8 regional companies could play a pivotal role as the designated oversight body. Their responsibilities would include enforcing regulations, mediating disputes, and ensuring compliance with standards. These companies are structured with a commitment to sound corporate governance and prudent financial management practices, all of which are subject to regular audits. Furthermore, they are aligned with taxi compliance standards and are well-positioned to drive the formulation and implementation of legislation related to formalization and subsidization efforts. On a practical level, these companies would also function as centralized command centers for real-time monitoring of taxi activities. Through their executive committees, they would oversee compliance and provide comprehensive reports to the relevant city authorities at regular intervals. This strategic approach serves as a means to seamlessly amalgamate and unify the diverse operations of the taxi industry.

Way forward for the taxi industry formalization

The way forward for the taxi industry formalization is clear. The national government needs to take the lead in kick starting the process by clearly outlining and promoting the legislative framework that is supposed to drive the taxi industry towards formalization. It is essential to adopt a proactive and cooperative approach between government and taxi industry leaders.

The Western Cape government is well-positioned to lead this implementation due to its current and ongoing engagements with the taxi industry, experiential insights, and resource profile. The goal should be to establish a blueprint taxi formalization model that can be used as a template in other provinces.

The benefits of taxi industry formalization are numerous, including safety improvements, better services, economic growth, and better mobility for  commuters. It is time for the government and the taxi industry to work together to make this a reality.

Article By Mbavhalelo Mabogo, CEO/Founder, Quickloc8