The taxi industry is organised along Mafia lines, with powerful, barely accountable associations collecting massive levies to fund war chests and pay for members’ funerals, a commission of inquiry in Cape Town has heard.
The probe into the underlying causes of instability and violence in the Cape Town taxi industry was set up in May after clashes over routes to the newly opened Cape Gateway Mall left six taxi operators dead and dozens of passengers injured. In 2000 three people were killed and 36 commuters injured when three taxi bosses hired a hit man to attack Golden Arrow buses in an attempt to secure passengers.
Chaired by former Truth and Reconciliation Commission investigations head Dumisa Ntsebeza, the commission has heard testimony of joining fees of up to R60 000 — a letter of support from the association is a licensing requirement — and daily and monthly rank fees, which, if not paid, lead to drivers being evicted. In addition, hawkers pay taxi associations to be allowed to ply their trade at ranks.
Grievances, like Sicilian blood feuds, run deep, as rival associations accuse each other of hiring “imbovane [ants]”, as the hit men are known.
Officially, control of taxi ranks is in the hands of private companies contracted by the city council, but they rely on the associations to govern them.
Yet some routes are 70% oversubscribed, adding fuel to the fire. For this, the Western Cape authorities are fingered: for years there has not been a permanent head at the Operators’ Licensing Board, which issues taxi permits. But provincial coffers are drained with each permit application: the province spends R500 on each, but collects only a R25 fee.
The authorities’ apparent lack of control took a peculiar turn this week. The city council dropped its aggressive drive to prevent interchange managers from testifying in public: it discovered they actually worked for a subcontracted management consultancy. Earlier the council argued that the managers were in fear of their lives because taxi boss Michael Kupiso was murdered days after testifying before the commission.
A founder member of the Congress of Democratic Taxi Associations [Codeta], Kupiso had told the commission that the industry operated “above the law” and everybody was afraid of the associations’ power.
“Codeta has no constitution. It is essentially a Mafia-type organisation which operates according to its [own] rules,” he said. “If people are murdered the leaders are responsible for collecting funds for transport and funeral costs. However, they never make public any figures.”
In subsequent proceedings the rival Cape Amalgamated Taxi Association (Cata) struggled to provide a copy of its constitution, which, it said, existed. It was “confidential … not allowed to be carried around”, explained Cata chairperson Sipho Maseti.
He shed more light on murky financial affairs. While Cata asks member associations to raise money for legal or funeral costs, the “mother body”, or umbrella structure, was not responsible for other levies. That was the domain of route managers.
When confronted with earlier testimony that one taxi operator who “ran away during a [route] war” was fined R6 000 upon his return, the Cata executives shrugged: “Maybe it was a decision of the route [managers].”
With 1 200 taxis at the central Cape Town taxi rank every day, “it is a disaster waiting to happen”, testified Llewellyn Kleinveldt, operations boss of the management consultancy contracted by the city council. Yet for more than a year appeals to council and security officials to resolve issues of congestion; the continued use of radius permits, which were abolished in 1997; and safety were ignored.
With three weeks left before it closes, the commission has identified as urgent the need for coordinated law enforcement, an overhaul of the licensing system to stop the current unlawful multiple registration of vehicles and financial accountability.
“There’s forever a levy, but there’s no accounting system so the money is put into the hands of certain people that will cause certain things like setting up a war chest,” Ntsebeza told the Mail & Guardian.
Cabinet to accelerate change
The cartels that control the taxi industry can be broken if the flow of cash that taxi associations earn by extorting massive, unregulated fees from operators and drivers is cut off, the Department of Transport believes.
The Cabinet is currently considering a package of subsidy, regulatory and law enforcement measures to enable more rational transport planning, and to end the dominance of the industry by taxi associations that are often run along the lines of protection rackets.
The long-delayed recapitalisation project, together with the proposed introduction of new subsidy arrangements, are an opportunity, and an incentive, to draw operators into a restructured industry, officials say.
Without regulatory reform, they argue, recapitalisation will only consolidate existing problems.
“Taxi ranks are owned by municipalities, but they are claimed by associations, who levy all sorts of fees. We need to break that. Routes are owned by commuters, and regulated by government, yet associations claim to own them too. Government must take control away from the bosses that currently control the industry,” says Lucky Montana, deputy director general in the transport department.
Montana says there is growing momentum for change, some of it coming from taxi owners themselves. “Operators are coming to us to say ‘liberate us from these gangs’.”
He was reluctant to characterise the details of the strategy ahead of a probable announcement by the Cabinet next week, but said one way of dealing with the associations would be to cap membership fees — which can run to more than R40 000 a year — at a much lower level, and to ensure that they are spent only on addressing members’ concerns. “People are currently forced to join, often by the threat of violence, even though it is their legal right not to. We don’t know where the money goes, but there is a huge amount of it,” he told the Mail & Guardian.
The second element of the strategy is a massive increase in law enforcement activity. About R2,5-billion in new funds for transport policing were set aside in the department’s 2005 budget vote.
The third is to use the recapitalisation programme, and the promise of subsidies for operating certain routes, to draw operators into a more rational, transparent set of economic relationships.
The department wants to encourage consolidation in the industry, with fewer individual owners, and more co-operatives and medium sized businesses to take advantage of economies of scale. On some routes, where taxis can provide a more efficient service, subsidies will be made available, but only those operators that restructure will be eligible to apply.
Montana acknowledges that the process has moved more slowly than expected, but he says it was crucial to deal with broader regulatory issues before implementing recapitalisation. “We need to move quickly on this now, and we intend to.” — Nic Dawes