South Africa

South Africa

Uber vs. Authorities: Regulatory headaches abound for popular taxi service

Uber vs. Authorities: Regulatory headaches abound for popular taxi service

Smartphone-operated taxi service Uber has caused regulatory problems wherever it operates in the world, and South Africa is no exception. Last weekend, multiple Uber cars were impounded in Cape Town, where provincial government and the company are struggling to come to an agreement on what form of regulation is appropriate for the system. Customers don’t seem to care; Uber is exploding here. South Africans have taken two million Uber rides in the past year. By REBECCA DAVIS.

Mukrim, who asked not to be identified in full, is a registered tour guide and a metered-taxi driver who has been living in South Africa for almost 30 years. Ever since he heard about Uber, the taxi service taking global cities by storm, he has been supplementing his income by driving for Uber in Cape Town as well.

Last Saturday, Mukrim was pulled over by an undercover traffic cop who demanded to see his papers. Mukrim supplied him with his valid operating permit, professional driving permit and driver’s licences, all of which Mukrim showed journalists on Wednesday. The traffic cop became aggressive, Mukrim alleges, and accused Mukrim of driving for Uber – which Mukrim admitted he did, but not at the time he was pulled over. The cop allegedly demanded to go through Mukrim’s SMSes for evidence that he was operating for Uber, despite Mukrim’s protestations that his SMSes were personal and private.

The interaction ended with Mukrim’s car being impounded – despite the fact that his paperwork was legitimate. “This is my country,” Mukrim alleges he was told by the traffic cop as an additional rebuke. Telling journalists this story, Mukrim broke down in tears.

This story has unusually sinister dimensions (not least of xenophobia), but Mukrim was one of many Cape Town drivers to have cars impounded last weekend in what Uber suggests is a targeted crackdown on the company.

Another Uber driver, Riyadh, told Daily Maverick on Wednesday that he owns two cars which use Uber’s e-hailing technology, and the second one was pulled over on Saturday night by a “ghost cop”. The driver tried to claim to police that he did not work for Uber, whereupon Riyadh claims that police turned their attention to the passengers he was driving – two Italian tourists – to determine whether the car was part of the Uber service.

“[Police] made them scared, so of course they said ‘yes, it’s Uber’,” Riyadh said.

The car was taken to Green Point, where Riyadh says his driver was given a R7,000 ‘first offence’ fine and a subsequent R2,500 fine for not having the right operating permit.

“It happens every few months,” Riyadh said.

Riyadh’s situation was different to Mukrim’s: Riyadh’s car did not have the right documentation to operate as a taxi, whereas Mukrim’s did. Uber argues, however, that the delays in Cape Town getting their cars the necessary permits to operate mean that the company has to support its drivers operating without the legally-required documents for now.

“We are talking about drivers with passenger insurance, a full criminal background check and a professional driver’s license,” Uber Africa’s General Manager Alon Lits said on Wednesday. These are some of the safest drivers on the road, Lits maintains, who would be deprived of earning a living for their families until the City and provincial government sort their bureaucracy out. “We’re not going to let a broken process stand in the way of job creation,” Lits says.

The problem is, essentially, that authorities have never had to regulate a transport form like Uber before, and the service doesn’t fit neatly into any existing public transport category. Different South African cities are dealing with it differently. In Johannesburg, Uber drivers have been able to operate with relative ease until now because Uber falls under a “charter service” operating license.

In the Western Cape, the trouble is that drivers are required to get a metered taxi-service operator’s license, despite the fact that Uber cars don’t have a meter. (Passenger and driver contract directly with each other through an app.)

Lits says that Uber wants nothing more than to get its vehicles regulated, but have faced constant uphill in the Western Cape. Drivers have, in his view, “done everything they can to get licensed”.

A moratorium on all new metered taxi licenses in Cape Town was finally lifted last December. Drivers have submitted business cases and applications required by the Western Cape Transport Department, but have yet to hear back from the Provincial Regulating Entity. A decision is hoped for next week.

In the meantime, however, cars continue to be taken off the roads – usually at the times when Uber services are most in demand. Lits estimates that 3,000 rides have thus far been lost to the impounding of Uber cars.

“I’m quite surprised that the City is choosing to focus their efforts on taking safe and reliable rides off the road,” Lits says.

Mayoral committee member for safety and security JP Smith denies that the City is specifically targeting Uber cars. “We have a weekly operation focusing on public transport vehicles…which moves to a different area and different type of enforcement every week, which includes buses, metered taxis, amaphelas, and minibuses.” All taxis that are operating illegally are taken off the road, Smith says.

Uber would contend that one of the main differences between its service and that offered by the illegal pirate taxis is to do with safety. Though there have been allegations of sexual crimes committed by Uber drivers elsewhere in the world, South Africa has yet to see any problems, Lits says.

Uber carries out additional criminal background tests of its own on drivers with professional driving permits, and he says it’s a point of concern that “10 to 15%” of drivers with these licenses have some form of criminal background. This would enable them to drive other forms of taxi, but not for Uber.

Mukrim says he became interested in Uber after getting attacked as a metered-taxi driver in Long Street. Taxi drivers are frequently targets for criminals because they carry cash in their vehicles. Uber works on an entirely cashless basis, because passengers’ payments come off a registered credit card automatically.

Riyadh says the same. “Before Uber I would never have driven a cab,” he says. “Because you carry no cash and your car isn’t marked, you’re not a target.”

The traditional taxi industry has responded with huge hostility to Uber in Cape Town, with protests calling for the banning of the service earlier this year. Apart from the unfairness of the fact that Uber drivers operate without the permits metered taxis require (and pay for), lobbyists also say that Uber is stealing their market and sending the proceeds overseas: Uber takes 20% of each transaction, and its headquarters are in San Francisco.

Lits dismisses the complaint that Uber is stealing anyone’s market. He says they’re creating a market that was never there previously: because the average waiting time for an Uber in Cape Town is 3,5 minutes, people are now hailing Uber who would previously have been dissuaded from taking a cab due to the 20 or 30-minute wait after calling a metered taxi.

He says that the David-Goliath narrative set up by the taxi industry, with Uber in the role of Goliath, is inaccurate because most metered taxis in Cape Town fall under large fleet operators. “It’s misplaced to think they’re about the small guys on the street,” Lits suggests.

On the other hand, there’s no getting away from the fact that Uber is currently acting as a rogue service. Why should cars fitted with Uber’s app be able to operate without the necessary permits, if nobody else can?

“It’s a fair comment,” sighs Riyadh. “You do need a permit.”

Councillor Brett Herron, the mayoral committee member for Cape Town transport, calls Uber a “welcome addition to our public transport offering”.

“The Uber model does not strictly fit within the provisions of the National Land Transport Act but we have encouraged Uber partners to apply for metered taxi operating licenses,” Herron told Daily Maverick. “We have over the past few months supported over 800 licence applications associated with Uber.  The City is not, however, the licensing authority – the Provincial Government is – and we are waiting for the PRE (Provincial Regulating Entity) to make their decision.”

Permits or no permits, it seems that even those in authority can’t resist that Uber convenience.

“I’m a big fan of Uber,” admits Herron, “and use it myself”. DM

Photo: Travis Kalanick, Founder and CEO of Uber, delivers a speech at the Institute of Directors Convention at the Royal Albert Hall, Central London, Britain, 03 October 2014. The annual convention brings together business leaders and politicians to discuss the business strategy and the world economy. EPA/WILL OLIVER

Read more:

  • Cape Town impounds over 200 Uber cars in 2015, on Fin24
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