Minibus-taxi industry is in for a shake-up
Legal prescriptions that have been ignored may soon be enforced
Business Day recently reported a decision by the UK supreme court to the effect that Uber drivers were employees, entitled to all the benefits and protection of that country’s labour legislation. The report suggested similar legal action was being planned by Uber drivers in SA (“UK case drives SA class action against Uber”, February 23).
The intended action in the Johannesburg labour court would bring clarity on the employment status of e-hailing drivers. However, there is another and far larger public transport operation where the employment status of drivers has been in no doubt for more than 15 years — the minibus-taxi industry.
On April 28 2005 the labour minister gazetted regulations in terms of the Basic Conditions of Employment Act. “Sectoral Determination 11: Taxi Sector” made it clear that taxi drivers are employees of the taxi owner, and legally entitled to a range of listed benefits.
These include a minimum wage (updated regularly until 2017, after which the National Minimum Wage Act came into force). Other benefits are paid annual and sick leave. There are also limitations on the maximum number of hours a driver is permitted to work (per day and per week). These should have an impact on the safety of taxi operations.
However, these legally prescribed benefits have been almost entirely ignored. Taxi drivers continue to be paid largely on the basis of the cash they collect from customers. Most drivers work long hours, six or seven days a week.
The department of employment & labour must take primary responsibility for the lack of enforcement of the regulations. However, it must also be said that the department of transport has not used the powers available to it.
The National Land Transport Act 2009 requires that a public transport operating licence may be issued “if the applicant has signed a statement to the effect that he, she or it will comply with labour laws in respect of drivers and other staff, as well as sectoral determinations of the department of labour”. The statements have no doubt been submitted, but there appears to have been few follow-ups.
One reason for the reluctance of taxi owners is the additional costs that would be incurred if the regulations were implemented. At a media briefing in April 2005 at which the new regulations were introduced, the then president of the SA National Taxi Council, Tom Muofhe, said: “It is true that our competitors in the bus and rail modes have minimum conditions for employees which are similar to those about to be introduced for the taxi industry. But they receive subsidy to enable them to do so ... the taxi gets nothing.”
That is still largely the case today. Taxi owners may claim a scrapping allowance (recently increased) when they hand in an old vehicle, and that can of course be used to reduce the capital cost of a new one. But there is no operating subsidy to help meet costs such as those of drivers.
This may be about to change. In August 2020 transport minister Fikile Mbalula initiated a national taxi lekgotla, attended by representatives of government and the taxi industry. A joint declaration at the end of the two-day discussion included a commitment “to provide subsidy to the taxi industry as an integral part of the economic model aimed at ensuring long-term sustainability of the industry”.
The declaration went on to further commit to an empowerment model “anchored on formalisation, which includes establishment of business entities, subsidisation of the industry and partnerships with government”.
To receive the government subsidy these “business entities” will be required to comply with all relevant legislation. This would naturally include the requirements of the relevant labour regulations, especially the sectoral determination mentioned earlier.
The cost per driver would increase, but the business entities will also have opportunities for cost savings. A recent pilot study in the Cape Town area demonstrated that if taxis were operated as a fleet rather than by individual owners the same level of commuter service could be achieved by as few as 80% of the current number of vehicles on the road.
The changes may well be imminent. In his speech in parliament during the debate after the recent state of the nation address, Mbalula spoke of his intention to “implement a new public transport funding model that includes the taxi industry from the next financial year”.
Taxi users and the public at large will be keen to see if this new funding model will lead to higher standards of taxi operation.
• Browning is an independent public transport analyst.
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