City of Cape Town proposal to transform minibus taxi industry

©Glyn Spencer via 123RF

The proposed new model will aim to bring benefits to the entire minibus-taxi industry and not only those who are affected by the roll-out of the MyCiTi bus service. If approved by Council next month, Transport for Cape Town, the City's transport authority, will embark on a process to assist the minibus-taxi associations to form companies.

"I am confident that this proposed new model will assist in improving the overall conditions for those commuters who make use of minibus-taxis to reach their destinations. Once the minibus-taxi industry is transformed into formal businesses, other road users and employees within the taxi industry and the City will also reap the fruits as it will be in the minibus taxi operators' financial interest to improve self-regulation and service standards,' said the City's Mayoral Committee Member: Transport for Cape Town, Councillor Brett Herron.

Local taxi industry leaders approve

Currently there are up to 102 route associations across the city that are organised into six regional structures. There are approximately 10,000 operating licences and 16,000 vehicle owners and drivers.

'It is a well-known fact that the City has limited resources to sufficiently address the large number of illegal operators on our roads. Instead of spending more resources on enforcement, however, it is the City's intention to rather work with the minibus-taxi industry in finding solutions that will be to the benefit of us all - from the commuter, to the operator and to the City.

We have already presented this transformation model to the minibus-taxi industry and other affected government departments where it has been well received. In fact, leaders in the local taxi industry have indicated that they are in favour of a new approach that will provide them with financial security and stability. I want to reiterate that the minibus-taxi industry is at the centre of this plan and that we will be working closely with them to ensure the success of this model,' said Councillor Herron.

Establishing TOCs

Going forward, the intention is to establish association-based taxi operating companies (TOCs) where the TOC owns the operating licences, rather than individuals as is currently the case. The individual minibus taxi operators will transfer their licences in exchange for shareholding in the TOC.

Furthermore, in future, the TOCs will have to prepare a business plan, substantiating the number of operating licences required to run the company at a profit. The TOCs may own the vehicles, will employ and train the drivers and other workers, and will be tasked with disciplining drivers. The City, for our part, will provide financial assistance for professional services to assist the industry to set up the TOCs, as well as for training and building management capacity.

'As the profits in the new model will go to the TOCs as opposed to the individual operator, it will be in the TOC's interest to curb illegal taxi operations and to self-regulate the routes that they are authorised to operate on in terms of their operating licences. It will also be in the TOC's interest to ensure that the drivers comply with the rules of the road and that their vehicles are roadworthy. One of the advantages of this new proposed business model is that the TOC will have significantly more bargaining power than the individual minibus taxi operators when it comes to the procurement of new vehicles, or the servicing of a fleet,' said Herron.

Meeting passenger needs

From a passenger perspective, it is envisioned that this new model will lead to less speeding and reckless driving from taxi drivers as they will no longer need to compete for passengers to meet their daily targets; and TOCs will be motivated to train their drivers in terms of how to behave towards their clients. It will also be in the interests of the TOCs to operate with the right type and size of vehicle, and to have a fleet that meets the demand on their routes, leading to less overcrowding.

Participation in My CiTi services

It is envisioned that the transformation model will prepare and position the TOCs to better participate in future MyCiTi services and services at public transport interchanges.

For example, the TOCs who operate from a common public transport interchange can form regional taxi companies (RTCs) and once this has happened, the City can enter into contracts with the RTCs for the following services:

• providing security at public transport interchanges
• providing cleaning services at public transport interchanges
• undertaking minor maintenance at the public transport interchanges
• managing the advertising rights at public transport interchanges
• managing the land provided for depots and fuelling facilities

Motivated by vested interests

'The City will be playing an oversight role with the TOCs managing the public transport interchanges. We foresee that the interchanges are likely to be better managed as the local operators will have a vested interest - financially and otherwise - in the facilities,' said Herron.

Furthermore, the regional taxi companies affected by the future roll-out of the MyCiTi service in other parts of the city will have shareholding in the vehicle operating companies that enter into agreements with the City for operating the buses on the new MyCiTi trunk routes. The TOCs will, in certain instances, also be involved in operating the feeder services for the MyCiTi service.

'The City has, over the past six years with the roll-out of Phase 1 of the MyCiTi service and the N2 Express service from Mitchells Plain and Khayelitsha, learnt a number of valuable lessons. Simply put, the City has come to the realisation that going forward, we need to consider a hybrid model where minibus taxis may complement or replace the MyCiTi buses on certain feeder routes,' said Herron.

Going forward, the City will assist the industry as follows:

• Facilitating the establishment of the TOCs
• Making available funding for capacity building within the industry
• Making available land for depots and fuelling facilities
• Providing new business opportunities to them by making available maintenance, security and cleaning contracts to the industry
• Playing an oversight role in the TOCs and RTCs

'This new model will require a mindset change from us all and dedication. We will have to work together to ensure the successful implementation thereof. A well-oiled minibus-taxi industry, managed in accordance with sound business principles, is in the interest of us all - be it in the form of higher profits for the taxi operators, or in an improved service for the passengers and improved regulation for the City. We are looking forward to working with our partners in the minibus-taxi industry' said Herron.