Taxi industry’s decline could mean the end of thousands of informal businesses

The taxi industry’s descent into the financial dumps is taking nearly a million informal businesses down with it.

This according to informal industry trends expert, GG Alcock (author of Kasinomics, 2015), who says the taxi industry’s threats of massive price hikes were understandable, given the government’s lack of support for the informal sector as the economy reels from the Covid-19 pandemic.

On Tuesday afternoon, the South African National Taxi Council met with fired up taxi bosses from the Alexandra Taxi Association after it threatened to more than double its fare. Though the council’s spokesperson Thabisho Molelekwa reiterated the illegality of such a price hike, ATA were not the only operators considering their options as Johannesburg taxi operators struggled to make ends meet.

Members of the Greater Krugersdorp Taxi Association in the West Rand said taxis had lost as much as 80 percent of their income-generating capacity as operators had to share time on the road and routes equally to avoid running each other out of business.

For Thobias* a taxi operator based in Westgate Mall, this meant that his taxis, which by law could only be filled to 70% capacity were operating only three days a week, to allow other operators an equal share of the market.

At a base fare of R14 for a trip to the surrounding areas, some taxis went from generating at least R2000 a day to just over R1000.

“What is disappointing us now is that government promised to give us assistance as we were not operating for two months. Now all we can hope for is for government to make good on that promise or at least bring down the lockdown to level one. As you can see it is still quiet than it used to be and we don’t make more than four trips. As drivers we are struggling to buy petrol every day and some owners are going to lose their cars because they cannot make the loan payments on them.”

From spaza shops and backyard mechanics to fast food outlets and hawkers, the informal trade sector was in the same position as as the taxi industry, said Alcock.

There had not been any meaninfgul intervention measures in place, even by the Department of Small Business Development. This was, to an extent because many of these operations either didn’t qualify or could not afford to meet such requirements as having a registered business. It was no wonder the taxi industry was making such bids to get government’s attention, he added, and the rest of the informal sector was likely to support them.

“So 90% of these small businesses whether they are taxi operators or fast food hawkers who are South Africans, still do not benefit from these government bailouts despite having the need. So it is my personal thing that the taxi industry is well within its rights to say well, you have reduced our load capacity to 70% and at the same time you are not giving us any assistance to mitigate the impact of Covid-19.”

Molekwa had yet to comment on the outcome of the industry meeting at the time of publication.

Simnikiweh@citizen.co.za

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