Business Day: JOHN DLUDLU: State must help save SA’s vital taxi industry

The government should increase the relief grant as the sector is one of the easiest to revive

The national coronavirus command council, President Cyril Ramaphosa’s de facto war cabinet against Covid-19, meets on Wednesday, as SA approaches the peak of the pandemic. Among the main discussion items will be the fate of the country’s taxi industry. The government should agree to the industry’s main demand and end the standoff by upping the relief from a one-off R5,000 to R20,000, to save the R50bn sector.

Last Monday a large proportion of the 15-million South Africans who, according to Transaction Capital numbers, rely on the country’s 200,000 minibus taxis for their daily commute to work, schools and universities, were left stranded by an industry strike.

On Monday the industry, which has also been battered by the lockdown to contain the spread of the virus that has claimed more than 2,000 lives in SA, changed its pressure tactic: striking drivers defied government regulations by filling up their vehicles, ignoring the 70% capacity restriction designed to uphold social distancing. In Mpumalanga, a journalist covering the protest action was wounded by a police rubber bullet.

Weeks of appeals by the industry for the government to increase the relief grant have gone unanswered, forcing the sector to flex its muscle. The government’s response has generally been slow and ambivalent — ask the restaurant industry! The R5,000 one-off taxi payout offered by the government came after much dithering.

Significantly, even before Covid the industry was struggling to breathe thanks to the challenges it faces. Unlike municipal buses and trains, including the Gautrain (the high-speed rail operating between Johannesburg, Pretoria and Kempton Park), the minibus taxi industry receives no subsidy from the fiscus. This despite its vast contribution to SA’s economy: not only does it provide direct jobs to drivers, it also supports the livelihoods of the many workers who rely on it.

A 2003 working paper by the International Labour Organisation considered the employment effect of the Kombi taxi industry. It noted: “The total number of employees countrywide is about 185,000, including drivers, queue marshals, car washers and fare collectors. Of these 2% are women. An additional 150,000 jobs are indirectly associated with this sector, mainly in motor manufacturing, fuel, spare parts and maintenance.”

As the Transaction Capital data shows, the industry has continued to grow. And the growth has had nothing to do with government policy. The transport portfolio has seen many changes of political leadership, which has meant every incumbent had made promises and commitments they cannot see through.

For more than a decade transport ministers have been promising to help the industry formalise as a step towards arranging a subsidy scheme — and failing to deliver. The current minister, Fikile Mbalula, is singing the same song.

For queue marshals and drivers — few are also vehicle owners — working conditions are often horrendous, even inhumane. Employment contracts are rare, which means they struggle to apply for unemployment benefits.

The owners’ pockets have been hit hard by the cost of finance as a result of SA’s credit rating downgrades and rising fuel costs. And banks have been knocking on the doors of defaulting taxi bosses.

As a measure of containing the spread of Covid, the government imposed one of the strictest lockdown regimes in the world on March 26, forcing millions of employed South Africans and students to stay at home. Many are still working from home and students are receiving lessons online, and it could be months before this changes, if ever.

Like the tourism and construction sectors, the taxi industry has been hit hard by the lockdown. But it is also one of the industries that should be easiest to revive, which in part is why the government needs to assist it urgently to save livelihoods supported by the industry.

It is hard to understand why it is easy to pump billions into SAA when it is on its way down, or launch an entirely new airline, and simultaneously plead poverty when it comes to an industry as vital as the taxi business.

As with other relief measures, thought must go into the measures taken to support the industry — there is no point in setting aside billions if the funds are going to be trapped in red tape through impossible qualifying requirements. Also, the relief must be aimed at both employers and employees.

Instead of using this crisis to formalise the industry through complex paperwork, the government needs to be imaginative and practical: that is, save the industry now, and formalise it later.

The issue of subsidies for the industry should form part of the medium-term measures to restructure and modernise the SA economy. An incentive programme, such as a two-year tax holiday, should be considered to bring the industry into the compliance fold.

For its part, the industry should stop gambling with commuters’ lives: they must immediately observe all anti-Covid health protocols such as social distancing, hand sanitisers and insistence on face masks for passengers and drivers.

Like politicians, the industry’s leaders should not be exempted from full accountability about their role in enabling the pandemic to decimate lives and livelihoods. That said, the industry is too important to be allowed to collapse.

by Business Day –

John Dludlu