AA bid to regulate tow truck industry falls flat
Attempts to regulate the tow truck industry fell flat, with operators accusing the Automobile Association of SA of trying to unfairly dominate the industry.
What was meant to be a pledge signing ceremony to cleanse the industry on Wednesday turned into a mud-slinging session as sector players refused to sign.
"The AA is not a nonprofit organisation but a private company. You are using that to come in and work against us. You offer lower rates than the rest of those in the industry and are suppressing us‚" said Wesley Douglas of the SA Towing board.
Douglas, who attended the ceremony at the AA’s offices in Kyalami‚ Johannesburg, accused the AA of creating an unsustainable environment for its competitors. "Petrol has gone up but your rates for towing have stayed the same or gone down. A national towing strike will happen if this continues because you are using your brand to suppress us. You cannot come into our industry and tell us how to live," Douglas said.
Bone of contention
Seemingly‚ the bone of contention between the AA and the industry bodies is a contract the association recently signed with a big insurance firm.
Douglas said: "This deal that King Price and AA is going into is being sprung on us and is bad for us towers across the country. We have been fighting for a higher rate to be sustainable. It has been 10 years with no price increase for towing.
"Everything has gone up for us as operators but nothing has happened in terms of getting us to be sustainable. So now we are earning less.
"This is an unregulated market and because it’s unregulated‚ it means that insurers have used service providers — call centres or middlemen like the AA is becoming‚ where they are subcontracting in the local individual associations.
"They are making a margin on what they are contracting those services for.
"The insurers are saying ‘we will pay AA’ and the AA is saying they will pay the tower but they will take money in the middle and what it then does is that they will go to the insurance company and say‚ ‘I can get you something at a cheaper price’. So over the last 10 years‚ we have had a lot of call centres doing this."
Etienne Pel‚ chairman of the United Towing Association of SA‚ accused the AA of a lack of transformation.
But AA CEO Collins Khumalo denied this: "The AA is committed to paying rates that are fair to towers and we are willing to be transparent. The AA is owned by members. It is not white-owned. It is the only organisation that is black-benched."