SA e-hailing drivers struggle below minimum wage amid rising costs

E-hailing drivers in South Africa often earn less than the minimum wage of R27.58 per hour because their income is eroded by rising fuel prices, vehicle rental fees, and increased commissions.

This is according to Vincent Lilane, business development representative at global mobility platform inDrive.

In South Africa, e-hailing services are dominated by Uber, a multinational American company, and Bolt, an Estonian mobility company that also operates in multiple countries across the globe.

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Lilane says it is critical that fair pricing is achieved for both e-hailing drivers and passengers.

“South African drivers need to work longer hours to compensate for their low income and this could impact driver well-being and potentially also compromise customer safety.”

inDrive estimates that around 21% of the South African population now uses e-hailing services. The industry is projected to grow even further to serve a user base of 14.38 million people by 2028, says Lilane.

Safety concerns 

“The rapid growth of ride-hailing in South Africa has coincided with a concerning rise in threats to the safety of both drivers and riders across all operators in this space, tarnishing the reputation of the entire industry as a result.

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“Unfortunately, this isn’t unique to South Africa, as similar incidents are reported globally,” Lilane says.

He acknowledges safety challenges in the industry, including insufficient driver background checks, lax enforcement of vehicle maintenance, and passenger harassment of drivers.

The industry hopes the recently signed National Land Transport Amendment Act will have a positive impact on the earnings of e-hailing drivers. The legislation, among other things, brings long-anticipated recognition to e-hailing services and provides clarity on how businesses should operate.

Lilane, however, believes e-hailing drivers should have more autonomy over determining prices.

“Driver control over pricing could also benefit passengers. This would allow them to access more competitive fares, a critical factor during the current cost-of-living crisis where affordable transportation is a major concern.”

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Besides giving drivers more control over pricing, Lilane is of the view that the e-hailing companies should reintroduce – and expand – incentive programmes and bonuses as a way to reward their drivers.

“Eighty-five percent of drivers have indicated that bonuses and rewards are essential to their earnings.”

Beyond passenger transport 

Lilane says there is also scope for expanding e-hailing services beyond merely passenger services.

“Currently, the freight and cargo market, particularly in remote areas, faces significant gaps,” he says.

“E-hailing platforms can … fill this void and connect businesses and individuals with reliable cargo transportation solutions.

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“This could not only create new income avenues for drivers but also contribute to a more streamlined and accessible logistics network across South Africa.”

This article was republished from Moneyweb. Read the original here