Recapitalisation has cleaned up the taxi industry

Collen Msibi

This is the seventh anniversary of the taxi recapitalisation programme. I presume one question lingers in everyone’s mind: has the programme cleansed the taxi industry of its evil past – especially “moving coffins” and violence? Has the programme managed to live up to its objectives?

In my recollection, the journey begun in 1995 with the formation of the National Taxi Task Team, which developed the recapitalisation programme to position the industry in the mainstream public transport system – especially as it moved 60 percent of passengers.

The first big hurdle for the recapitalisation programme was taxi operators who did not have the legal permits. Government had no choice but to introduce a special legalisation procedure in 1996 to legalise those operating illegally.

The government’s main ambition was to replace an unroadworthy taxi fleet with safe, reliable and secure vehicles. In 2005, the cabinet approved R7.7 billion for the recapitalisation programme over seven years. Of this, R5.5bn was set aside to enable operators to bring in an unroadworthy taxi for scrapping and receive R50 000 in return. The operator could then use the amount as a deposit for a new vehicle or opt out of the industry. Has this system really worked?

Recent figures show 47 000 have scrapped their old vehicles. This seems to suggest that the toughest part of the journey has been completed.

However, seven years seems too short a period to complete this work. The recent cabinet decision that has turned the recapitalisation programme into an ongoing project will help take us to the finishing line.

Let us also remember that the recapitalisation programme brought with it a regulatory framework which replaced the radius permits system with operating licences. The permits were a main source of violence and were used mainly to regulate the industry by prescribing a kilometre radius for operators. The permits were not prescriptive about the route(s) to be used by operators to cover their radius. This led to competition over profitable routes, and violence. The radius permit was also not linked to a specific vehicle and it could easily be recycled and resold.

The recapitalisation programme introduced an operating licensing system with strict requirements. The licences are prescriptive in terms of routes. This immediately distinguishes legal operators from illegal ones. Each licence is linked to a vehicle and renewable every five years.

One of the requirements of the operating licence is registration as a taxpayer. However, until we fully remove illegal operators, unroadworthy taxis will remain.

l Collen Msibi is the chief director in the Department of Transport.