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Uber and the taxi companies: What’s the fight about?


After operating in South Africa for almost three years in relative peace and quiet, Uber has recently been all over the news for all sorts of reasons, but what exactly is all the fuss about?

What is all the fuss?

The furore started in the Western Cape in January this year when 34 private cabs were stopped and impounded by the city’s Metro police. According to the City’s Safety and Security department, which is responsible for law enforcement and traffic services, the drivers were operating without valid permits for metered taxis and therefore breaking the law.

Subsequently, over 200 Uber cars have been impounded in Cape Town since the beginning of the year.

Tensions reached boiling point last week with metered taxi drivers in Johannesburg saying that Uber drivers don’t have the right permits and licences to operate, and that they are cutting into their profits.

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In essence, metered taxi drivers have been fighting for the last six months to get Uber drivers to comply with the same rules, regulations and licences that they have to. There have also been reports of passengers and cars booked through Uber being attacked and intimidated by irate cab drivers.

So the metered taxi drivers don’t want the competition?

Well, yes, but that isn’t the whole story. Sure, if anything is threatening your livelihood, you won’t be too happy about it either, would you? But it is not as cut-and-dried as that. See, the problem is that Uber keeps on claiming that it’s not a transport company, only a smartphone application.

That is where things become a bit fuzzy, as although Uber doesn’t own any of the cars or employ the drivers, they do still work for Uber on a contract basis – be it part-time or on a full-day schedule.

From what the Metered Taxi Council in South Africa is saying, it only wants Uber drivers to compete on the same ground – to get the necessary licences and comply with the rules and regulations when it comes to public transport.

Other drivers, on the other hand, want to see Uber removed from the country altogether. For this group, it’s no longer an issue about having the appropriate licence, but rather about the fact that Uber drivers can ferry passengers for far lower fares – making them a preferred mode of transport. For those drivers, it becomes an issue of not making enough money, “robbing” them of a livelihood and taking away customers.

But isn’t Uber a taxi company on your phone?

It might seem that way, but no. Uber is a technology-driven service for summoning a driver, which will take you to your destination for a metered fee. It also needs to be explained that the cars don’t have the traditional meters on the dashboard, as everything is tracked through dedicated driver/passenger Uber apps.

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The principle behind Uber is that this enables anyone with a car to earn some money, and passengers get a competitively priced ride in return. It is what a “sharing economy” is all about – drivers earn cash and riders reach their destinations.

Uber is an enabler, if you will, by allowing anybody to tap into its technology algorithm. That might be a point that is lost on the metered taxi drivers.

“Our technology is open and pro-choice and we are keen to offer it to a broad number of taxi drivers to boost their occupancy rates and chances for profit. In fact many metered taxi drivers are already using our technology to boost their incomes, and we would welcome more who wish to join their colleagues,” Uber CEO Alon Lits said in a media statement.

If that is the case, what is the real fight about?

For the large part, the fact that Uber is in South Africa is not the issue. The issue here is how Uber drivers are regulated, and if they are, by whom? If you ask the drivers, it should be the Metered Taxi Council of South Africa. If you ask Uber, it will tell you that it requires more stringent safety checks first.

“The drivers and their cars are carefully screened. Security and criminal record tests are done continually. Also, when requesting a ride, the information, photo and details of the driver are sent to the passengers, who can share them with a family member or friend if they are nervous,” Lits says.

Uber has also encouraged its drivers on multiple occasions to get the appropriate licences for operating in their province – many of whom haven’t.

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So Uber saying that “…we are keen to offer it to a broad number of taxi drivers” is a bit of a stretch, as drivers need to have a certain type of vehicle with a limited amount of kilometers on the clock.

Unless Uber meant that it can offer the hailing tech’s algorithms to the drivers so that they can operate on their own – for a fee of course.

If that is the case, it strikes us as odd that metered drivers can’t see the difference between sharing free space in their cars for money thanks to an innovative new technology platform and giving people a ride in a taxi. For money.

So it is a two-way street?

Short answer, yes. In the blue corner is Uber, the ultra-disruptive technology that gives citizens a new way of getting around, but its drivers aren’t exactly complying with the rules. But with that said, Uber drivers have complained that local bureaucracies are holding them back from getting licences, and thus taking food off of their plates.

In the red corner are the metered taxi drivers, who have been assaulting drivers and threatening passengers. And let’s face it – some of the cars they use aren’t exactly in the best of shape. From a certain perspective, they also see their monopoly on the provision of taxi services threatened by a non-compliant competitor – a coveted and in short supply operator’s licence pretty much guarantees income. No wonder they don’t want the boat rocked.

So neither party has an unshakable claim to the moral high ground,  and at the moment both are accusing each other of sabotage. Right now, nobody is winning.

The other problem is posed by the legislation governing this, which differs from province to province. Western Cape drivers, as an example, have to apply for a metered taxi licence, while drivers in Johannesburg have to apply as a hired limo service.

To complicate things even further, the Western Cape provincial government said yesterday that it is afraid to issue too many licences for Uber drivers as it could potentially saturate the market. That is a rather strange position to take for a provincial government committed to getting private cars off the road and easing congestion. (Side note: here is an interesting read on how self-driving cars can solve New York’s traffic congestion)

Certainly is complicated…

There’s another issue to throw into the mix which no-one is talking about, which is that Uber isn’t just used by self-employed drivers. Anecdotally, many drivers we’ve spoken to are actually employed or hired by entrepreneurs with a bit of cash who’ve bought a fleet of cars specifically to make money through Uber. The argument that Uber’s customers on the supply side aren’t metered cab firms does get harder to make, then.

So is nobody right?

Nobody, and everybody is right in our view. Public transport definitely needs some shaking up, the relationship between taxi organisations and the government needs to be re-examined, and whether you like it or not, Uber cars on the whole deliver a great service in South Africa that’s changing many drivers’ attitude towards cars in general.

But at the same time public safety laws have been built up over many years, and Uber can’t essentially self-regulate itself and let the world be damned. All around the world it’s been shown time and again that government does have a role to play in that through regulating who can drive strangers around for money it should be able to ensure that when a passenger gets into a taxi or an Uber, they stand a reasonable chance of getting out at the other end unscathed and fairly charged.

Uber cannot exist outside of the law, but that doesn’t give the metered taxi drivers the right the physically accost anyone over it.

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