34 private cabs operated in affiliation with the Uber “ride sharing” app have been stopped and impounded in Cape Town over the last three days. According to the City’s Safety and Security department, responsible for law enforcement and traffic services, the drivers were operating without valid permits for metered taxis and therefore breaking the law. Drivers of the impounded Uber cars have to pay fines of R1 500 while they will also have to fork out a R7 500 vehicle release fee.
Compared to strikes, boycotts and complaints against Uber elsewhere in the world, the company has been positively received here in South Africa and highlighted the previously poor state of the private cab industry. The Cape Town clampdown, however, marks a significant change in its fortunes.
“They can only operate with a valid operating licence,” Mayoral Committee Member Jean-Pierre Smith told htxt.africa today, “Their vehicles should not be on the road until they have such. We take action against all taxis across the City on this basis.”
Smith said that allegations Uber had been unfairly singled out for enforcement were unfounded.
“Other metered taxis said to a Cape Times journalist that they would burn out the Uber taxis because they are operating unlawfully and the City is not taking the same action against them that is being taken against all operators city-wide… During the last 16 months we have impounded 4000 public transport vehicles and Uber has been treated exactly like everybody else.”
Within South Africa, licencing requirements for public transport vehicles varies from jurisdiction to jurisdiction. Uber drivers in Johannesburg are required to apply for a chartered services operating licence while the Western Cape government requires drivers to apply for a far more onerous ‘metered taxi licence’. Until the beginning of December last year, the Western Cape government had placed a moratorium on the issuing of new metered cab licences licences.
Uber, which had been operating in Cape Town since August of 2013, has been in discussions with the City of Cape Town for several months regarding the licensing issues according to the GM of Uber in South Africa, Alon Lits.
“We want to ensure that the drivers are legal and have the correct permits to be on the road.” Lits said. “The issue there is not a drivers licence, it’s a license relating to the vehicle – so that is an operating licence.”
Cape Town is currently updating its policy on regulating public transport vehicles, and expects to have new by-laws in place by the end of this financial year. This new strategy will specifically deal with “e-hailing”, or the electronic hailing of cabs through an app as is the case with Uber, and payment via debit and credit cards.
Councilor Brett Herron, Mayoral Committee Member for Transport for Cape Town – the body which is overseeing the changes to regulation – says that while the City has ben talking to Uber it’s been clear about which licences drivers need in the interim.
“I met with the executives of Uber South Africa last year,” Herron said, “At that meeting I expressed the City’s support for the Uber concept and indicated that we were planning a Metered Taxi By-law which would regulate all metered taxi operations, including those that use e-hailing (such as the Uber app).
“I made it very clear to Uber that, notwithstanding this support, they would have to ensure that their partners (the vehicle operators) were properly licensed before any vehicle offered a transport service for reward. We advised them that they would have to apply for metered taxi operating permits since, in the absence of a licensing category that exactly matches their operations, this was the best fit in the interim. Transport for Cape Town, the City’s transport authority, has been unambiguous about the type of licensing they require and it is dishonest of them to suggest that they are the victims of ambiguity.
“There is no reason why Uber should be given any special permission to operate without proper licensing. Nor does anybody have the authority to grant such permission. They must get their house in order.”
In order to qualify for a metered taxi permit, says Uber’s Lits, drivers are required to construct a complex business plan which includes a corporate vision and “value proposition” along with market analysis of competitive services, making it almost impossible for small drivers to get licences under the existing regime. Lits says that Uber has helped prospective drivers to apply, drafting business plans and preparing paperwork, and added that some drivers were still waiting the result of applications weeks after the 7-14 day turnaround period promised by the Western Cape authorities.
“Regulation is getting in the way of job creation,” Lits says, “The partners we work with are professional drivers with professional driving permits (PDPs) that have gone through an Uber screening process that is better than the status quo. This final operator’s license (and an ambiguous and unnecessarily bureaucratic process) is a license for the vehicle and the regulatory delay is getting in the way of a empowering individual drivers to become small business owners and entrepreneurs.”
An Uber spokesperson acknowledged that the firm has been working with drivers who haven’t yet applied for the metered taxi licence in Cape Town or are still awaiting the outcome of the application.
//This story was updated on 7th Jan with extra comment from Alon Lits.