Big changes proposed for Uber and other e-hailing services in South Africa

The Department of Transport has published a new discussion paper on South Africa’s taxi industry and its role in the wider transport industry.

While the bulk of the document focuses on empowering taxi drivers and owners, it also sets out possible regulations for other sectors such as e-hailing.

The document states that through regulation, e-hailing services will be subjected to tighter rules which should include the following requirements:

  • Providers should only participate in the South African market if they operate through a South African registered company;
  • All its financial transactions must be through a South African registered bank;
  • The South African company through which the provider will be trading will ensure that at least 25% equity is held by the corporate entity chosen as empowerment vehicle of choice at all times.

In a separate discussion document, the department said that taxi systems across the world are being challenged by companies such as Uber, which has taken advantage of innovation, technology, and marketing strategies.

The department said that these companies have also used a ‘peculiar interpretation’ of current legislation possibilities and limitations, for purposes of offering services that in many aspects are superior to traditional ones provided and which are in high demand by users.

To address these issues, it cited regulations used by Mexico City around services such as Uber and Cabify. These include the following:

  • Platforms must register with the Secretary of Mobility through the payment of 4,617.50 national currency (R3,594.45).
  • Car operators must be registered to receive a permit to offer their services.
  • Drivers must contribute 1.5% of each ride to a transportation fund created by the Government of the Federal District “The Taxi, Mobility and Pedestrian Fund” destined to the public works related to mobility.

“E-hailing mobility service has become popular and preferable by a considerable segment of the society. Users prefer the convenience provided by e-hailing service, its safety and security incentives and the fact that it fits perfectly into the user’s schedule and location comfortability,” the department said,

Like many countries around the world, South Africa is in the process of regulating the e-hailing services, it said.

“The NLTA Amendment Bill brings the e-hailing services into the same arena as metered taxis and allows these to operate either a meter or an e-hailing application interchangeably.

“The law further empowers the Minister to make regulations for standards or requirements for e-hailing applications or similar technology. This effectively creates e-hailing as a sub-set of the metered taxi category for purposes of operating licences.”