Cash just one of the problems in archaic minibus taxi sector
On a recent minibus taxi ride through central Johannesburg it was hard to miss the irony of commuters getting engrossed in the digital world of smartphone apps while remaining firmly ensconced in a world of cash-only payments, long queues and poor customer service.
The constant perils faced by commuters and drivers have been compounded by the coronavirus outbreak, due to the proximity of passengers inside a taxi and the exchange of banknotes and coins. The World Health Organisation is encouraging people to use contactless technology instead of cash, cautioning that the virus can survive on the surface of banknotes for days. In an attempt to contain the contagion, banks in China and South Korea have been disinfecting used banknotes, while the US Federal Reserve is withholding banknotes received from Asia.
This brings into stark relief the archaic cash-only payment model used by SA’s minibus taxis. Inside a taxi one banknote is often handled by all four back-seat passengers before being transferred via the two middle rows to the front-seat boffin, whereupon the change follows the same route back. An estimated 15-million passengers daily handle banknotes and coins in SA’s minibus taxis.
The risk posed by handling a polymer note is “no greater than touching any other common surface such as handrails, doorknobs or credit cards”, as the Bank of England was recently quoted as saying. Try telling that to those at the coalface — the owners and drivers who at day’s end have to manually sort and count all the banknotes and coins. Sitting on a bed and counting the day’s takings is how some owners apprentice their young heirs into the business.
But in this era of fake news and a fast news cycle you don’t even need a real pandemic to create panic. Fake news and memes have far greater virality than their biological analogues and can send commuters scurrying to decashed modes of transport such as buses and trains.
Such is the fragility of the minibus taxi industry in the medium term — an industry estimated to ferry 70% of SA’s daily commuters. From interviewing commuters at taxi ranks it is clear that they would welcome electronic forms of payment and many having experienced the convenience while using city bus rapid transit and other decashed commuter systems.
Over the years there have been numerous attempts at innovation in the sector, including electronic and card payments, and the level of sophistication among the taxi associations has been positively influenced by these attempts at modernisation.
But these efforts will come to naught if innovators continue to build great tech on the unsteady foundations of a broken 80-year-old business model, seemingly convinced that the tech on its own will override these legacy problems. The archaic ownership structures and outdated business practices are the elephant in the room.
Prime among these is the remuneration structure, where the driver is required to meet a set daily target. Once the minimum target is met drivers spend the rest of the day and evening earning for themselves. Hence the risky overtaking, driver angst and fatigue, accidents and many other ills that continue to plague the industry.
Persisting with this model means any attempt at introducing electronic payments will be actively undermined by drivers as it will bring transparency to their earnings. To help them transition to the new dispensation, drivers must be formally employed and properly incentivised.
THE ARCHAIC OWNERSHIP STRUCTURES AND OUTDATED BUSINESS PRACTICES ARE THE ELEPHANT IN THE ROOM
The challenges and solutions are well understood across the industry, especially by tech start-ups that have learnt hard lessons through trial and error. Those seeking to modernise the industry would be best served by taking the wise counsel of those who have skin in the taxi game.
Why, with all the accumulated knowledge and experience, is the industry failing to jettison its antiquated business model? The reasons ultimately boil down to the human propensity to fear and resist change.
A lasting solution will require that all affected parties appreciate the imperative for change. Instead of careening down the yellow lane of industry transformation, owners, drivers and other affected parties should be supported through the change journey.
The sun is setting on cash as an exchange of value, while the proliferation of digital wallets and cryptocurrencies continues. It should not have to take another pandemic to jolt the industry into action.
The question is whether the key players, including the government, will find common cause to navigate the uncharted backstreets of the digital revolution.