Uber motors into a legal minefield

Licensing problems in SA add to online taxi service’s woes over ‘surge’ pricing complaints

PROBLEMS keep mounting for taxi app phenomenon Uber, which has gone from hero to zero after running into trouble with governments and customers around the world.

Durban’s transport authorities have been impounding Uber vehicles since August, saying that the drivers are operating illegally.

And last week, Cape Town officials impounded 33 taxis linked to Uber for not having permits.

Mlungisi Wosiyana, deputy head of public transport at eThekwini Transport Authority, said this week: “We are fully aware of the illegal Uber operations in the city. We have been closely following the Uber matter both internationally and nationally.”

Rival taxi companies say some Uber drivers are using private vehicles to transport passengers.

Faye Freedman, owner of Eagle Taxis and a member of the South African Metered Taxi Association, said: “The public is not aware that the Road Accident Fund will not pay out if a private vehicle is used for public transport.”

Wosiyana said: “We would like to warn passengers against using illegal Uber taxis and any other illegal taxis, as they will not be covered in the event of an accident or incident that results in injury or loss.”

But Alon Lits, Uber’s general manager for Johannesburg and Durban, said all the service’s drivers were covered.

“Insurance is a requirement up front. It’s one of the checks and balances before we activate them.

“They can’t have a vehicle insured for personal use and be carrying passengers for commercial use. We check that type of thing.”

Uber launched in California four years ago, connecting customers to the nearest taxi in its network via a smartphone app.

The company does not employ the drivers or own the vehicles, so it argues that it is exempt from regulations covering traditional metered taxis.

But Wosiyana said municipal officials had told Uber executives that their service contravened the National Land Transport Act in terms of operating and driver licensing requirements, as well as passenger liability cover.

He said Durban was not licensing any new taxi drivers because “the metered taxi industry is now overtraded in the city”.

Cape Town has started registering Uber taxi drivers again after a temporary ban, but the city still has issues with the service.

Richard Bosman, the city’s executive director for safety and security, said 34 taxis were impounded last weekend — all but one of them operating for Uber.

Bosman said none had the correct permits and some drivers had allowed friends to work in their place, even if they were not registered with Uber.

Gauteng transport officials had not returned from the festive season break this week and could not be reached for comment.

Lits said the authorities in Johannesburg, Cape Town and Durban had differing views about the correct licensing category for Uber, which caused problems. But the company prided itself on its rigorous checks of drivers.

“We’ve found that about 15% to 20% of drivers with public driver’s permits actually have hits [criminal records] against their names,” he said.

“We’d like to think we are more stringent than the industry and [in terms of] what’s expected from a regulatory perspective.”

He said some drivers could have abused the system, although customers were sent a picture of the driver and details of the car when they accepted the fare.

Local taxi associations say they have lost customers and revenue since Uber began operating in South Africa in 2013.

Uber came under fire in the days after New Year’s Eve from angry customers who were charged more than four times the normal fare on the big party night.

The “surge” fare, intended to match price to demand, was criticised by passengers who in some cases had thousands of rands deducted from their credit cards.

Cape Town father Nicky Rebelo cried foul after Uber charged his son R2 800 for a 35km trip from Clifton to Muizenberg on New Year’s Eve.

A “normal” Uber ride from Clifton to Muizenberg costs between R247 and R329.

Wosiyana said he had also received complaints about passengers being overcharged.

Lits said the higher charges were necessary to control supply and demand of taxis. The higher the fee, the more drivers would be on the road.

Despite the controversies, Uber drivers said this week that it was business as usual.

“I know you are going to get the odd complaint,” said one, who asked not to be named.

“I have been following the comments on social media and there have been a lot of complaints, but there have also been a lot of positive comments,” the driver said.

“We still have our regular clients coming in. There hasn’t been any downside.” — Additional reporting by Matthew Savides

There have been a lot of complaints, but also a lot of positive comments