On guard: A private security guard stands outside Uber’s Johannesburg offices. Uber and Taxify drivers have been under violent attack since the app-based services gained popularity. Picture: REUTERS
On guard: A private security guard stands outside Uber’s Johannesburg offices. Uber and Taxify drivers have been under violent attack since the app-based services gained popularity. Picture: REUTERS

Testimony by witnesses from the e-hailing transport industry to the Competition Commission’s inquiry into SA’s land-based passenger transport market was given incognito on the fourth day of hearings held in Pretoria last week.

This was done to protect the identities of the witnesses who feared for their lives, according to a Competition Commission, spokesman. The public was not permitted at the hearing and the media in attendance were forbidden from broadcasting or disseminating news from the venue while the hearing was in progress.

The e-hailing witnesses may have been justified in making the request. Uber and Taxify drivers have been under violent attack, allegedly by metered taxi operators, since the app-based services gained popularity in SA. Several e-hailing vehicles have been set alight in incidents spanning more than two years and at least one Uber driver has been killed in apparent attacks by metered-taxi operators.

Metered-taxi drivers have also blockaded freeways and engaged in go-slow action in protest against what they call the illegality of the e-hailing operations. Gauteng Metered Taxi Association spokesman Reuben Mzayiya has vowed that protests and blockades will continue until the e-hailing services are roughly in line with public transport regulations. The issue before the commission, however, is fair competition.

It argues that the metered taxi industry does not develop into a 'dense and efficient' network, while e-hailing services are better able to respond to fluctuations in demand by having a more flexible supply of drivers

On Friday, the Gauteng Metered Taxi Association’s Thomas Rabodiba accused the transport department of failing to regulate and enforce the law on what he called the "illegal" Uber and Taxify operators.

"So much so they were given a space to violate and destroy the metered-taxi industry with their low uncompetitive fares."

Metered taxis are obliged to charge a flat rate for each trip, added to which they charge a set rate of R12.50/km. E-hailing drivers contract to charge an agreed per-trip fare via its app before the service is engaged.

In its presentation, Uber counters this argument with what it calls a dynamic pricing model. Its use of technology allows it to avoid surge pricing and to direct its drivers to places and times of high demand. This is what permits lower rates per kilometre, compared with metered taxis. The e-hailing argument is that regulated pricing does not respond efficiently to demand, resulting in long waiting times and poor service.

It argues that the metered taxi industry does not develop into a "dense and efficient" network, while e-hailing services are better able to respond to fluctuations in demand by having a more flexible supply of drivers. Uber claims that this is what lowers waiting times during periods of high demand.

At the core of the dispute is the assertion by metered-taxi operators that e-hailing and hailing by other means, such as approaching a taxi rank or making a call to a dispatch service, are the same thing, and that these services should be subject to the same degree of regulation.

It must be noted that while the metered-taxi industry blames much of its woes on the consequences of regulation, such as the onerous obligation to have its meters calibrated by municipal bureaucracies and being confined to ranks under city bylaws, in none of the presentations made by several associations has there been a call for deregulation of the metered-taxi industry.

It must be noted, too, that the metered-taxi industry recognises the efficacies inherent in e-hailing with its initiative to develop its own app-based hailing service, Yookoo Rider.

In the time ahead, in which the commission will formulate its recommendations about fair competition in ride hailing, it must decide whether self-regulation in e-hailing can be relied on to be adequate, on whether the services compete for comparable custom, and whether the greatest impediment to fair competition is not an outdated regulatory environment itself.

blomn@businesslive.co.za

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