South Africa’s taxi industry consists of over 1,200 associations scattered across the nation comprising almost 150,000 individual owners whose vehicles transport 3.7 million workers each day over a total of 10 million trips, in total generating around R90 billion in revenue a year.
Taxis also pay in excess of R36 billion for fuel per annum; with service, maintenance, finance, and insurance costs also stretching into the tens of billions.
As a result, this massive industry is invaluable to the local economy, but there are many common misconceptions that are painting drivers and associations in a bad light, which ultimately leads to violence and destruction akin to what we’ve seen over the past few weeks in Cape Town, said transport activist and CEO of The Justice Fund, Lorenzo Davids, in an interview on Talk 702.
Common misconceptions about the taxi industry
Despite the massive impact the taxi industry has on the South African economy, the sector has yet to be formalised and there is little to no support from government to do so.
Granted, taxis are known for being violent and employing intimidation tactics at times, but that is because they are being demonised by the media and public alike, are excluded when important decisions are made that affect them, and have no formal dispute resolution process to voice their concerns, said Davids.
For example, when new infrastructure is built where taxis will undoubtedly have to travel to in order to pick up and drop off commuters, they are not involved in the discussions and are rarely if ever accommodated when the plans are being finalised, leaving them to make their own arrangements once the developments are complete.
Moreover, there currently exists no mechanism for the three main players in the public transport industry – the bus, train, and taxi services – to resolve their grievances with one another or to have support structures for each other in the case where the one is not operating to its full capacity, which is an “easily implementable solution” that is not being pursued by government, said Davids.
Attempts that have been made to involve the taxi sector have in large part also been misguided.
Davids said government is aiming its engagements at the associations and the drivers, but not the owners of the taxis who are the real decision-makers.
“The owner is the guy who says to the driver, take my vehicle to blockade the N2. The owner is the man who says ‘Here is R50 for your work today, I am dissatisfied with how you performed.’,” said Davids.
“There’s this big, big, big misunderstanding and gap in how the dialogue is led by the South African government, and I am very disturbed by that continuous mischaracterization of the industry by the mere interface the public has with one single driver.”
This also counts when it comes to the taxes paid by taxi drivers and operators.
Many outsiders believe they do not pay any taxes, but while they do not pay their fair share due to the inherently cash-based nature of the sector, the owners and drivers definitely do not pay nothing, said Davids.
For an operator to expand their fleet with new vehicles and to apply for finance, they must have proof of where their income originates from, where they keep it, and that they pay their dues to the country’s revenue service, else they would not be able to continue doing business by the book, something that is often required to be part of an association.
As such, the current number being circulated in the media stating that the entire taxi industry only pays about R5 million in taxes annually is much lower than the true amount, said Davids.
But again, government is targeting the associations and drivers with its talks, and not the owners, and leaving a lot of unpaid taxes on the table in the process.
“The associations are not the ones that are going to be paying tax. The owners are the ones who should be paying tax,” said Davids.
Therefore, unless the government, media, and the public recognise and appreciate the undeniably large impact the taxi industry has on the country’s fiscus, and start to involve the right people in the right discussions, the problems of violence, intimidation, and destruction will persist.
“That is what the South African government and its partners at local and provincial levels have missed in the entire interface with the industry,” said Davids.
“We cannot have a dialogue where people will enter in safely if they are there on the basis of being demonized and now needs to be brought into check. So it is wanting somebody to be in the room and beginning to show them respect, so that they can begin to rise to the level that is decent debate in this country.”
Keyword: What most South Africans don’t know about the taxi industry