/ 24 November 2022

Funding dries up for popular Western Cape Blue Dot taxi service

A total of 800 taxis have since May last year participated in the Blue Dot scheme, which required them to fulfil requirements for vehicle branding, tax compliance and driver behaviour. Photo: Supplied

A R215 million programme between the Western Cape government and the local minibus taxi industry aimed at formalising the sector and improving transport services is coming to an end despite its popularity, as the provincial and national governments quibble over its sustainability.

A total of 800 taxis have since May last year participated in the Blue Dot scheme, which required them to fulfil requirements for vehicle branding, tax compliance and driver behaviour. But the Western Cape government was forewarned that the service was not sustainable, according to Lwaphesheya Khoza, spokesperson for Transport Minister Fikile Mbalula.

As authorities trade blame for the programme’s looming ending on 30 November, nearly 15 000 taxis in the province ceased operations for two days in a strike by the South African National Taxi Council (Santaco) in Cape Town. The protest was marred by violence, with buses belonging to Golden Arrow and MyCiti torched while other vehicles were stoned and some two million commuters left without transport. A taxi boss was reportedly shot dead on Tuesday.

The Western Cape transport department described the strike as a “slap in the face,” while Santaco described the province’s response to the Blue Dot service as a “betrayal”.

More than the usual number of pedestrians filled the side paths along the N2 stretch between Cape Town and Somerset West on Monday morning, the first day of the strike.

Now and then motorists heading to Cape Town stopped to offer groups of people a lift.

A woman in her late 50s, on her way to a crèche where she cooks, told the Mail & Guardian how the bus that she usually catches is not operating due to the ongoing strike. 

On Baden Powell Drive, next to the Khayelitsha Wastewater Treatment Works, dozens of Golden Arrow buses gathered as metro police, traffic services and the South African Police Service were deployed to escort the buses back to the depot in Philippi. 

One man quipped that he used to be a bus driver, but now he drives a “fire truck”, referring to the constant fear that one’s bus might be next in line for a petrol bomb. 

Three people were arrested on charges of carrying explosives when police confiscated 13 petrol bombs in their vehicle on Delft Main Road on Monday. 

Santaco distanced itself from any violence that took place during the stayaway. 

The taxi council’s deputy chair, Nceba Enge, told M&G that their members were instructed not to get involved in any criminal activities. 

But, he also said: “We are not accountable and responsible for anything that happens on the streets. We say law enforcement should do their work.”

In Khayelitsha, not far from the Steve Biko bus stop where a MyCiti bus was set alight, the taxi rank in Harare in Ncumo Road was quiet. 

Apart from the food vendors, the taxi rank — usually humming with the sounds of commuters on their way to work — was deserted. A young woman selling plastic ware, hair products and shoes, said she did not expect the “complete emptiness”.  

A fruit and vegetable vendor concurred, pointing to the open areas while wrapping a cabbage head. “It’s quiet today,” he said. 

Massive incentives

The shutdown of Blue Dot will leave a financial void in the pockets of its managing company, Umanyano Travel Service, its eight regional companies, and taxi drivers. 

A director of one of the regional companies, who also owns his own taxis, told M&G that “the money dried up, there is no more money”. The man spoke on condition of anonymity. 

The programme was voluntary, he said, adding: “We are disgruntled. It was a good opportunity and we benefited from the project. We are not happy about it being stopped. We receive a substantial amount for our operators and of course the directors who run the company. Our salaries are also going to be stopped now.”

The director, who received a R20 000 monthly salary, emphasised that it was the first time “in history” that the taxi industry in the area had received any form of subsidy. 

”The leadership of the associations got salaries, I’m one of them, I receive a R20 000 salary a month, so we just made sure there was compliance. The majority complied.”

He adds that those in the industry were dismayed by the cancellation of the programme, as several other owners were waiting to be added in order to receive an incentive. 

On top of the salary, the director also received R10 000 for each of his taxis that were part of the Blue Dot service. 

He also earns R10 000 by receiving stars for safe driving. 

Using the Blue Dot system, he can track his drivers’ behaviour. The system, installed within a Blue Dot taxi, records driving behaviour and picks up speeding, harsh braking and deviation from a permitted operating route. 

Drivers did not see the money

The drivers of the vehicles “never benefited”, admitted the director. It was the owners that benefited, he said.  

According to another role player in the national taxi council, the R10 000 incentive per taxi is split between the owner and the driver. The owner takes R7 500, and R2 500 is given to the driver. 

Further to this, Umanyano — the Santaco-led company which has the Blue Dot contract with the provincial government — receives a monthly payment of R500 000. 

There are eight regional companies that fall under Umanyano, so divided by eight, each regional association receives R62 500 per month. 

Brett Herron, the City of Cape Town’s former mayoral committee member for transport and current member of parliament representing the Good party, claims the provincial government launched the Blue Dot programme “without a plan or the budget”.

“You cannot launch a pilot project if you are not ready to fully implement the programme, and that is what happened now.”

According to Herron, taxi operators told him that they bought new vehicles in anticipation of being added to the Blue Dot service, but “now the project has been cancelled … now they have the financial obligation towards the bank to finance the vehicle”.

“What was the point of starting the pilot project without the support from the national government or a budget to fund it fully?” asked Herron.


Khoza, for national transport minister Mbalula, told the M&G that they “cautioned on the sustainability of the project particularly in regard to incentivising compliance with the law”.

The Democratic Alliance-led government announced it will end its “highly successful” Blue Dot pilot programme due to “budget constraints” while making a proposal to national government to roll out the programme nationally.  

Khoza confirmed to the M&G that the national department was “made aware of this initiative” but emphasised “the project is entirely a provincial initiative introduced and funded by the Western Cape province for piloting purposes with the intention to expand it to the rest of the province”.

In turn, Jandré Bakker, media officer for the provincial department of transport and public works, maintains that the department conducted monthly meetings with the Blue Dot managing company, Umanyano Travel Service (Pty) Ltd. 

“Members were continuously informed of the status of the programme and when the funding would most likely run out, which would mean the end of the pilot unless additional funding was secured,” said Bakker. 

The spokesperson for Daylin Mitchell, MEC for mobility in the Western Cape, Ntomboxolo Makoba-Somdaka, said while engagements about the pilot programme date back to the 2020 Taxi Lekgotla, the MEC had “many informal discussions” about the project with the national department. 

Makoba-Somdaka added that the Western Cape government “moved beyond the talk shop, put plans into action and invested millions into the pilot project”.

Securing funds

In a response letter to Santaco’s two-day strike dated 18 November, which the M&G has seen, advocate Kyle Reinecke, the deputy director general for  transport management in the Western Cape, writes that the department is in the process of securing further funding of the project. 

“Efforts made to secure the necessary funding are still ongoing and therefore the action of Santaco Western Cape at this stage is deemed to be counter-productive,” reads the letter. 

It also describes the taxi council’s two-day strike as a “proverbial slap in the face”. 

“The department allocated more than R215 million to empower the industry through the Blue Dot pilot. It therefore feels like the proverbial ‘slap in the face’ that you chose a two-day stay away above working with us to try and secure funding for the continuation and extension of Blue Dot.” 

As authorities trade blame for the programme’s looming ending on 30 November, nearly 15 000 taxis in the province ceased operations for two days in a strike by the South African National Taxi Council (Santaco) in Cape Town

Asked what measures Santaco Western Cape have taken to raise funds for the project, Enge said they “do not have any way of fundraising” except to appeal to the private sector and government “to do something for us”. 

Enge added that Santaco reached out to the Cape Chamber of Commerce & Industry, the premier and provincial treasurer. 

However, for now, it seems that Santaco in the Western Cape has accepted its fate. As Enge said: “We are out of options as to whether there would be any new news of [Blue Dot] to continue”.