Government should subsidise taxis just like it did with buses and trains, says Competition Commission

The Competition Commission has called for the government to subsidise taxis in the public transport system, reports Business Report.

Commissioner of the Competition Commission Tembinkosi Bonakele said that there was a distorted relationship between the number of people that used public transport and its subsidy funding.

Bonakele said the government needed to subsidise taxis the same way it did with buses and trains.

He said taxis transported about 66.5% of commuters, while buses and trains were responsible for 23.6% and 9.9% respectively.

“Government currently does not have a subsidy policy which provides justification for some modes of transport being subsidised, while others are not.

“The minibus taxi industry needs to be subsidised through increased funding for the Taxi Recapitalisation Programme,” said Bonakele.

Bonakle said in order to ensure healthy competition in the taxi industry, the government needed to change its laws.

The commission suggested the removal of area restrictions imposed by section 66 of the National Land Transport Act because it encouraged route rivalry between taxi associations, as well as metered taxi services and e-hailing services.

“Area restrictions reduce competition and their rationale is incompatible with the evolving nature of the markets. Retaining area restrictions may constrain both e-hailing operators and metered taxi operators [when they fully embrace e-hailing technology].”

The rivalry over routes and turf wars has escalated in recent years over regulatory challenges.

The commission said a specialised division within the SAPS needed to be created to deal with all public transport-related matters.

SA National Taxi Council president Philip Taaibosch said the taxi industry believed that the scope of the recapitalisation and subsidy programmes should be broadened.

“We are saying that the transport mode where the commuters use should be subsidised. You should not look into whether you are subsidising the taxi industry or what. You are subsidising the commuters,” said Taaibosch.

“The commuters should be given the right to choose the kind of transport mode to utilise, but let the subsidy be the same to each and every commuter.”

The commission has invited stakeholders to make further submissions on its findings and recommendations before the end of March.

It also recommended that the Passenger Rail Agency of SA (Prasa) be separated from its troubled bus subsidiary Autopax.

Prasa is the sole owner and manager of intermodal terminal facilities in South Africa.

The commission believes that Prasa was charging excessive prices to the bus operators for the use of Park Station – the only intermodal terminal facility in Johannesburg.

It also found that Prasa favoured Autopax in space allocation and had restricted or denied access to competing bus service operators to Park Station.

Bonakele said the relationship between Prasa and Autopax – the operator of Translux and City to City long-distance buses – raised several concerns for the interprovincial bus industry.

“It is recommended that Autopax be separated from the Prasa Group and become a separate entity,” Bonakele said.

“As a separate state entity, Autopax will manage its business activities independent of Prasa Group and report directly to the government and not through the Prasa Group.”

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