Local taxi operators speak out
Local taxi companies are feeling the heat from Uber. Melusi Ncube, the CEO of Joburg-based Orange Cabs, said Uber’s entry into the local taxi market had had an effect.
Uber launched in Joburg in September 2013 and began operations in Cape Town the following month, later entering Durban and Port Elizabeth.
He said the biggest losers from Uber’s low fares would be the drivers.
“Uber’s low fares are going to result in the drivers spending less on maintaining their vehicles,” he added.
Uber’s Lits said that the company’s prices were lower because drivers using Uber were more efficient.
“Prices are low for consumers, while the money earned by drivers is maintained by maximising the amount of time they have a rider in the back seat,” he said.
Peter Lehman, the general manager of Durban-based Mozzie Cabs, said UberX’s base fare of R6/km, plus the 25% commission that Uber takes from its driver partners, made it unaffordable for drivers registered on Uber’s platform.
The company’s costs were lower than conventional taxi companies as Uber did not employ the drivers listed on its platform, and these drivers did not face the same compliance costs that conventional taxi companies bore.
Uber has never been transparent about whether it enforces compliance among its driver partners with South African transport and taxation laws.
“Tell me how Joe Public is protected when they drive with an Uber driver?” said Lehman.
Uber also had an expensive app, which conventional taxi companies could not afford.
“On every front, Uber is challenging and bullying legal taxi operators,” he said.
A manager at a Cape Town taxi service said that Uber was definitely gaining market share and his company was losing clients.
On the other hand, Ana Bonanni, the MD of vehicle finance company SA Taxi, said that Zebra Cabs, which SA Taxi owns, had as yet not seen an impact on its business from Uber.
Bonanni questioned whether Uber’s cheaper deal would result in a drop in quality amid rising costs for drivers, including a higher fuel price.