Picture: REUTERS
Picture: REUTERS

App-based taxi services such as Uber and Bolt are set to face more hurdles and competition in the country as the government moves to open up and regulate the e-hailing industry.

Similar to the rest of the world, the public-transport sector remains a heavily contested space in SA with drivers of metered taxis continuing to challenge app-based operators such as Uber and Bolt.

On Tuesday, the National Assembly adopted the controversial National Land Transport Amendment Bill during a second reading debate.

The bill has been in the making since 2013, and initially excluded e-hailing as a subcategory, though it allowed the use of a smartphone in lieu of a taxi meter.

According to parliament, the National Land Transport Bill amends the 2009 act by, among other things, providing for non-motorised and accessible transport. This brings the legislation up to date with the various technological developments.

It also provides powers for provinces to conclude contracts for public transport services, expanding the minister’s powers to make regulations and introduce safety measures.

The bill also prescribes criteria and requirements for municipalities to enter into contracts for public transport services.

It will now be referred to the National Council of Provinces for concurrence.

Uber has previously welcomed the bill.

At a media briefing ahead of the debate in parliament on Tuesday, transport minister Fikile Mbalula said the proposed law will be crucial in the drive to curb taxi violence. Mbalula said the tensions between e-hailing services and metered taxis mainly stemmed from the lack of regulation of the former.

He said metered taxis were heavily regulated and had to operate within well-defined areas, while such rules were not applied to e-hailing services.

“It [the bill] establishes a new category for operating licences and imposes certain obligations on technology providers not to allow illegal operators on their technology platforms,” Mbalula said.

In a report published in February, the Competition Commission called for changes in regulations governing all metered taxis, to level the playing field. The commission raised concern that the licensing regime for metered taxis meant that they were restricted to particular areas, while the e-hailing services operate anywhere. The commission highlighted, for example, that taxi operators may be limited to one municipality, while e-hailing drivers in Gauteng can operate between the Tshwane, Johannesburg and Ekurhuleni regions.

The commission wanted all area restrictions to be lifted so that once a taxi service is registered it can operate anywhere in the country.

The commission launched an inquiry in 2017 amid industry concerns about the impact of Uber.

The commission also found that nearly four out of five e-hailing operators were working without valid licences.

The commission’s report stated that the entry of e-hailing services in SA generated conflict between metered taxi and e-hailing operators.

“At the heart of conflict is metered taxis’ view that e-hailing operators have bypassed regulatory scrutiny (as there was no specific regulation governing their business model) and charged low fares,” the report stated.

phakathib@businesslive.co.za