The ANC has an ambitious plan to save the taxi industry: a co-operative bank owned by taxi operators.
Some insiders in the party believe this is a revolutionary move and will change the industry.
The details of the audacious plan are in a document titled National Taxi Indaba Public Discourse Platform, which was recently presented to the ANC’s national executive committee (NEC) by Transport Minister Fikile Mbalula.
Since the early 2000s, the government, through the Taxi Recapitalisation Programme (TRP) and the Revised Taxi Recapitalisation Programme (RTRP) in March 2019, has tried to change the industry and professionalise it.
The government has, to date, spent R4.4-billion through the TRP. Taxi owners were encouraged by the government to get their old taxis scrapped and be compensated with an allowance of R91 100, which has since been increased to R124 000 per scrapped taxi. The programme had an initial target to scrap 100 000 old taxis. This was adjusted to 135 894 in 2007. But only 72 653 vehicles have been scrapped at a cost of R4.4-billion.
This programme was necessary because South Africa doesn’t have an adequate public transport system. Despite the rapid bus schemes in metros attempting to fix the spacial racism of apartheid city designs, the power to move South Africa still lies with the taxi industry.
There are 15-million daily commuter trips in taxis, compared with nine million in buses and two million in trains. Buses and trains are subsidised by the government.
The idea of a co-operative bank will be presented at a planned National Taxi Indaba by Mbalula as part of his grand plan to empower the taxi industry and create a value chain.
Presenting this plan to the NEC, he said: “Various options are being considered which include either establishing a national co-operative bank owned by the taxi industry or establishing a national private company that will participate in economic activity on behalf of operators.” This would create “empowerment vehicles” that would “ensure economic benefits reach all operators in the industry”.
As part of this daring plan, the ANC wants the taxi industry to comply with “strict tax and labour laws”. It also wants taxi operators involved in conflict and taxi violence to face “severe penalties, which may include withdrawal of their operating licences and any economic benefit sponsored by the government”.
The plan includes a subsidy system for the taxi industry, something which the taxi owners have been demanding for years.
Mbalula said the plan was a chance to “re-imagine the Taxi Recapitalisation Programme”. He added that since the early 2000s, this programme —and the subsequent Revised Taxi Recapitalisation Programme — have tried to change the industry and professionalise it.
Mbalula told the NEC that the changes would ensure that “the real beneficiaries of this massive public investment are taxi operators, rather than commercial banks, retailers and other corporates”.
On top of the R4.4-billion already spent, he said the government “will spend more billions over the next five years”.
“The end game is a taxi industry that is able to recapitalise itself and benefits of this business cascading down to the last operator on the ground.”
According to Mbalula’s presentation, the department of transport will also be reviewing the taxi recapitalisation model to improve its effectiveness and affordability. The expenditure was originally projected to be R188.5-million over the medium term.
Mbalula’s suggestion comes as the government is facing questions about its seemingly exceptional treatment of the taxi industry. Other industries have been hit hard by lockdown regulations, but the industry has pushed back and got its way. After initially being allowed to load taxis at 70% capacity, the industry went on strike and was allowed to load to 100% capacity.
By taking to the streets and blocking roads, the industry also pushed for more financial support after Mbalula announced a R1.1-billion once-off payment to registered taxi operators.
Mbalula’s spokesperson, Ayanda Paine, said that since taking office Mbalula had decided to hold a national taxi indaba to come up with a blueprint that will formalise, regulate and economically empower the taxi industry. “The public discourse will be guided by a number of discussion documents on various topics. One of these is on the economic empowerment of the taxi industry.”
She said the co-operative bank, wholly owned by the taxi industry, is one of the proposals on the table.
Paine added that details about subsidising the taxi industry were still being discussed. “The department is working closely with the national treasury to develop a funding model for public transport, which includes subsidies for the taxi industry as the largest mover of commuters.”
The spokesperson for the South African National Taxi Council, Thabisho Molelekwa, said the issue of a co-operative bank is long overdue in the R8-billion taxi industry.
“We appreciate that the minister has taken this to the ANC NEC, that is the body that is in government. It shows that the minister wants this to have clout going forward. We have discussed this at length.” The move to create a co-operative bank, he said, was to loosen the power of the banks that finance taxis.
“Our attitude is a very simple one. The banking industry continues to see the taxi industry as a risk. Yet they continue to enjoy consistently the benefits from hundreds of millions of rands.”
Molelekwa said at least 1 000 taxis are bought each month. “You can imagine how much the banks are making. There is no form of empowerment and we have wealth that is not in our hands.”
He said the taxi industry has suffered in the past few years and some taxi operators have been forced to abandon investment in vehicles because of affordability issues. “There is an argument that a vehicle can be achieved cheaper.”
He dismissed claims that the taxi industry was bullying the government into conceding to its demands. “It is absolute nonsense. If that was true we would have had a subsidy today. We would not have the operating licence crisis we have. If we were bullying, the NTTT [the 1995 National Taxi Task Team] document would have been implemented. The life of a taxi operator would have improved drastically.”