Taxi industry ‘running on empty’
Surrounded by taxi drivers on the streets of Pretoria, taxi owner Siyabonga Mpungose is as grim as he is angry. “I don’t see any future in this industry,” he says.
“I became a driver because I couldn’t find job but, since I bought taxis in 2007, I’m making less money every month and every year.”
With a monthly income of about R8 000, he’s been forced to take out a loan to keep three taxis on the road.
The 37-year-old from Ladysmith in KwaZulu-Natal moved to Johannesburg in 1996.
Three years later, he started working as a taxi driver and then went on to start his own taxi business, registering his first Siyaya taxi in 2007.
Like many others, his story should be a celebratory rags-to-riches tale, a story of a rural youth who arrives in Johannesburg, ready for work, and goes on to set up his own business.
His business, however, has not proven to be lucrative. Although he now has three Quantum taxis operating in Dobsonville, Roodepoort, Leratong and the Johannesburg city centre, all belonging to the Dorljota Taxi Association, he says he is struggling.
He pays his drivers between R400 and R600 a week and spends about R600 a month on replacing brake pads at a backyard mechanic, “because servicing it at Toyota with quality parts is around R1 800”.
“I mean, come on, it’s just too much,” he says in exasperation.
Mpungose receives R400 from each of his drivers daily, but they also each spend about R400 on petrol.
His income is not guaranteed, however. Traffic fines often creep up on the owners long after the drivers have found different employers or have received their weekly pay.
“I will get a letter that says on a certain day the driver got three traffic fines of R250 each. That’s R750 in traffic fines for one day, but I only receive R400 a day. So I lost R350 because who must pay? It’s me,” he says.
Often he doesn’t find out about the fines until it is time to renew the taxis’ licences. On at least two occasions, Mpungose says, he’s had to turn back and abandon his attempt to keep his taxi licensed because of traffic fines. “I can’t get the permit because I must first settle the traffic fines according to this Aarto [Administrative Adjudication of Road Traffic Offences system]. And it’s something like R15 000; it’s too much,” he says.
Although an entrepreneur like Mpungose ought to be prospering, he says he’s actually had to downscale his lifestyle. His family does not belong to a medical aid and, crucially, he doesn’t qualify for a bigger loan to open a new business. Insurance premiums on the taxis amount to R2 800, with a tracking service that costs an extra R350 each.
His struggles are echoed by other drivers, who all complain that the taxi industry is beset by insurmountable financial difficulties.
More than 1 000 taxi drivers and owners shut down public transport services in Tshwane this week. They allege that Transport Minister Joe Maswanganyi has failed to respond to their grievances — particularly about a plan to recapitalise the industry and requests to scrap fines issued under the Aarto Act.
Members of the National Taxi Alliance (NTA) who marched to the Union Buildings on Wednesday called for Maswanganyi to be fired, alleging the minister is a “liar”.
“He’s treating us with disdain and he’s a liar,” NTA spokesperson Theo Malele said. “He made promises to meet with us in seven days from October 16, which he never did. We sent him text messages and letters, which he never responded to.
“How do you lead people when you don’t listen to them? Who are you representing? So it’s the president’s prerogative to appoint ministers, so we are here to ask the president to fire him,” Malele said.
The NTA has warned that, without a government subsidy, taxi owners will be left unemployed and in debt. The NTA is the county’s second-largest representative taxi association, after the South African National Taxi Council (Santaco), and has been leading the call for greater subsidies from the state for taxi trade-ins or scrapping of old vehicles.
Owners currently receive R84 000 for trading in their Quantum taxis — but the NTA has demanded the amount be increased to R150 000.
“How can you get R84 000 for a vehicle that was worth R450 000?” asked the NTA’s Lorraine Sifuba. “And I am 60 years old — tell me which bank will give me a loan for another taxi with R84 000, and I’m already this age? They’ll never give it to me.”
The government has hit back, insisting that there is some assistance in place. “The money might not be enough but it goes a long way in assisting them,” Maswanganyi said.
The NTA’s other demands include the approval of operating permits by the transport department. Alliance members claim applications for permits have been delayed for more than a year, leading to their taxis being impounded at a hefty fee.
Sifuba claimed that drivers are also forced to pay bribes: “We are just feeding the law [enforcement] officers because they are busy taking bribes from us, so we can’t even pay [for] our cars because we have to share our monies with them.”
Mpungose says it is hard enough balancing his income with his expenses, and that budgeting for bribes leaves him with almost nothing. Monthly instalments on the new Quantum taxis are seldom lower than R10 000 with the 34% interest rate charged by SA Taxi Finance, the industry’s largest financier.
“These Quantums are not worth it,” Mpungose says. “They are heavy on petrol and the servicing is [also expensive]. Things were better with the Siyayas.”
The transport department said it is negotiating with the treasury for taxi financing. “[We want to] see to it that the finance they [taxi operators] get from the private sector should be affordable, because as we speak taxi operators pay a huge amount in terms of interest,” Maswanganyi told the Mail & Guardian.
In 2007, the government started phasing out Siyaya minibus taxis and introducing the new, “safer” Quantums. The purchase of the Quantums was subsidised because of the low trade-in value of the Siyayas.
Despite this, operators claim that taxi fares haven’t risen with the fuel price. A local trip within a 10km radius still costs between R9 and R12 in Johannesburg, and a trip from the city centre to Tshwane costs about R50.
Maswanganyi appeared to acknowledge that cheaper transport could be made possible by government subsidisation, but would not commit to meeting the NTA’s demands. “Taxis are responsible for 68% of commuters, the highest means of public transport today, but of course they are not subsidised,” he said.
Malele said the NTA’s president had submitted an “intelligence document” to the presidency, which outlines why President Jacob Zuma should fire Maswanganyi. If the president doesn’t act, he warned, the NTA would continue its mass action.
Mpungose says the industry has shown enough reasons for why taxi drivers deserve a government subsidy.
“Imagine if we put up the price every time on a Wednesday they say the price of petrol is going up? We didn’t do that. So we deserve it [a subsidy]. We’ve proven that we deserve it,” he says.
On public criticism that taxi drivers don’t pay tax, he says: “My drivers fill up the taxi sometimes three times a day, six times a week. Other drivers in cars only fill up their cars once a week. So how much fuel tax am I paying? How much of the VAT am I paying? It’s much more than them.”