The Competition Commission is overhauling metered taxi licensing in South Africa. It will be scrapping some regulations in the National Land Transport Act (NLTA) so that there can be competition in the taxi industry.
The Competition Commission of South Africa is responsible for the investigation, control, and evaluation of restrictive business practices to achieve equity and efficiency in the economy. According to its Market Inquiry into Land Based Public Passenger Transport, these changes will facilitate competition between metered taxis and e-hailing services like Uber.
Section 66 of the NLTA stipulates that all commercial drivers are required to apply for an area-based operating license – whether metered taxi operators or e-hailing service providers. The permit defines a radius in which drivers are allowed to operate, as well as assigned taxi ranks, terminal, pick-up, and drop-off points. Instead, there is a prevalence of e-hailing drivers operating in South Africa without the necessary licenses.
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In major cities, between 35% and 55% of Uber drivers operate without a valid operating license, and between 70% and 95% for Bolt drivers. This is because these e-hailing apps allow drivers to connect with the nearest passengers outside their radius of operation, thereby negating regulations.
This uneven competition ground results in conflict between metered taxi operators and e-hailing drivers. Another reason why the Commission is making changes is the price advantage that e-hailing services have over metered taxis.
The Commission recommends a total overhaul of the issuing of licenses in the country. It has decided to remove the restrictions on operating licenses across all municipalities. It further suggests that there should be no pricing regulations for metered taxis.
This means that the Minister for Transport or MEC will no longer determine a fare structure. Operators will still be required to apply for roadworthy permits before their operating license is approved.
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