‘Enforcer’ drives plan to reform industry
JOTHAN Msibi shares the same nickname in the South African taxi industry that Bakkies Botha has in the rugby world: “The Enforcer”.
It is not his physical stature that has earned Msibi the nickname, because he is not tall. Nor is he some bonebreaking taxi lord bent on extracting his pound of flesh from other mortals. Instead, he appears to be gentle and polite.
The reason for the nickname is that Msibi has a vision for the taxi industry — and is determined to make it work.
He is one of South Africa’s most successful taxi owners and the chairman of TaxiChoice, the commercial arm of Santaco, the self-regulated national taxi industry body.
His plans seem to have a good chance of success because Santaco’s new president is Philip Taaibosch, a man who shares Msibi’s vision of leading the taxi industry in a second wave of formalisation.
The first wave came in the early ’90s when routes, permits and associations were introduced and Santaco was formed. That first wave was driven by the imperative to end continuous conflict and violence.
The second wave is far greater in terms of its vision and predicted impact. For Msibi, this transformation will put the taxi industry in its rightful place — at the main table of South Africa’s formal economy.
Clem Sunter called the taxi industry “the economic miracle of the ’80s” and equated its economic value to “three gold mines”. And the scenario planner was not joking: the most basic calculations put the industry at the level of a Pick n Pay. That is based on estimated fare collections and does not count all the vehicle finance charges and repairmen that it pays, nor the rank marshals, criers and cleaners that it employs. This is not to mention the 15 million people it delivers to work on time every day.
But first, let us get the complaints about bad driving out of the way.
The feeling in the industry is that people who complain about taxis in the morning traffic were only able to give their maid instructions that morning, before leaving for work, because of that driver behaviour.
“In many countries,” says Msibi, “there are high-occupancy vehicle lanes designed to encourage users to get out of their cars and into public transport.”
In South Africa there are only a few — and they are exclusively for buses. But buses only move 15% of the population whereas taxis move 65%.
“Taxis in this country should have their own lanes,” says Msibi.
Then there are the complaints about taxi safety. According to a Santaco press release: “Sixty percent of road accident fatalities occur over weekends (Friday to Sunday) and many of those are between 6pm and 9pm, which are times when the taxi fleet is least active. For every fatality in a taxi, there are five fatalities in private vehicles.”
There is certainly an argument to be made, backed by statistics, that drinking and driving is as much a contributor to South Africa’s road death toll as taxi driver behaviour or taxi roadworthiness.
Although Msibi insists that dedicated lanes would take care of the major moans about driver behaviour, there is another proposal that will be more palatable to most road users — and more realistic. It is the fitting of smartcard and tracking technology to every taxi in South Africa.
Msibi’s vision for this aspect of his plan is simply this: “One united taxi industry with a proper vehicle for South African conditions that will last for seven to eight years.”
He believes the Mbeki administration’s taxi recapitalisation programme merely resulted in the introduction of poorer-quality vehicles, which pushed up maintenance and replacement costs.
Despite these expenses, petrol-price increases and a lack of subsidisation, taxi fares in South Africa are the lowest in the world and increases do not nearly match inflation.
“The only reason it has survived,” he says with no hint of sarcasm, “is because taxi owners are the best entrepreneurs in South Africa”.
Msibi is hoping the electronic vehicle management system will give these entrepreneurs some relief — and reward for their guts and resilience.
Cynics will point out Santaco’s failed attempt to start an airline a few years ago. That, says Msibi, “was a case where the good intentions of promoting a broad-based black economic empowerment opportunity overtook the business planning”. “We take the positive lessons and move on. In the case of the electronic management project, it’s purely business.”
Studies show that taxi drivers keep on average 35% of the fares, although Msibi reckons it is more like 50%.
Drivers use the vehicles during quiet periods to make their own runs and race to squeeze in a few extra trips during peak hours. All this makes for bad driving and wears out the vehicle, which means the owners have to buy a new taxi.
Smartcards will take cash out of the system, forcing drivers to be honest. In exchange, they will get salaries with pension and medical aid benefits.
This will make everything safer: drivers with salaries will not have the incentive to race around recklessly and there will be less wear and tear to the vehicles.
Better control of the cash flow will raise owners’ earnings significantly, Msibi believes. For example, their finance costs will be greatly reduced because they will be able to prove earnings.
The electronic management system has already been tried on 8 000 taxis — but it was stopped by the government, which wanted a closer look at the mechanics and potential revenue streams.
This time around the industry is doing it properly. The government is on board and Msibi aims to have 10 000 taxis on the system within three years, which is expected to result in owners earning R700 extra every day. We are talking a net gain of R1.7-billion a year.
If you take a net present value of that, using a return rate of 20%, that is about R8-billion of collective buying power.
“We’ll negotiate collective rebates on petrol and tyres,” says Msibi. “We’ll finance ourselves. We’ll offer other vending services and act as a payment gateway for village pensioners and foreign workers, who will be able to charge their card and use it as a debit card.” The possibilities are endless.
Commuters want this solution too, he says. “Why should taxis be the only purchase they have to carry cash for?”
Many other commuters avoid taxis because they can buy prepaid tickets for buses and trains as a way of budgeting before they spend the rest of their cash. Not to mention white passengers. “When we ran the trial and people didn’t have to talk to the driver in order to pay fares, we suddenly had more white passengers. When it was stopped they went away.”
Drivers will naturally protest and this is where Msibi becomes “The Enforcer”. Despite the benefits, which will include UIF, training, bringing tens of thousands of unbanked people into the formal economy and even rewards programmes, you sense this will not be enough to persuade the drivers.
Msibi is clear that the owners hold the trump cards.
They, like their drivers and like their clients, all live in the townships.
On the one hand, this makes it difficult for owners to increase their neighbours’ fares. On the other, “it’s not like a mine where you have two owner representatives and a single entrance gate”.
There are thousands of owners, most of whom have only one taxi and employ one driver. The owners will have conversations with each other and with their associations. “Together with their associations, they will keep their own drivers out of the ranks and off the road and substitute scab drivers if they have to,” says Msibi.
The owners want control of their money and are prepared to take action. Msibi is their man to make it happen.