Reeling taxi industry hurting informal businesses

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

This is according to informal industry trends expert, GG Alcock, who said 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 reeled from the Covid-19 pandemic.

Yesterday, the South African National Taxi Council (Santaco) met taxi bosses from the Alexander Taxi Association (ATA) after it threatened to more than double its fares.

Although the council’s spokesperson, Thabisho Molelekwa,

highlighted the illegality of such a price hike, ATA was not the only operator considering its 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% 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 at Westgate Mall, this meant that his taxis, which by law can 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 R2 000 a day to just over R1 000.

“What is disappointing us now is that government promised to give us assistance as we were not operating for two months,” said Thobias.

“Now, all we can hope is that government makes good on that promise, or at least brings down the lockdown to Level 1.

“It is quieter than it used to be and we don’t make more than four trips. 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 the taxi industry, said

Alcock.

There had allegedly not been any meaningful intervention measures in place, even by the department of small business development. This was, to an extent, because many of these operations either did not qualify, or could not afford to meet such requirements as having a registered business.

“So, 90% of these small businesses, whether they are taxi operators or fast food hawkers, still do not benefit from these government bailouts, despite having the need.

“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.” * Not his real name