Mud-slinging session as AA is accused of trying to control tow trucking industry
Tow truck operators on Wednesday accused the Automobile Association of attempting to unfairly dominate the industry.
What was meant to be a pledge-signing ceremony turned into a mud-slinging session. “The AA is not an NPO (non-profit organisation) but it is a Pty (private company). You are using that to come in and work against us. You offer lower rates than the rest of those in the industry and are suppressing us‚” said Wesley Douglas of the SA Towing Board.
He was one of the members of the other bodies in the towing industry who had attended the ceremony at the AA’s offices in Kyalami‚ Johannesburg. He accused the AA of creating an unsustainable environment for its competitors.
“Petrol has gone up but your rates for towing have stayed the same or gone down‚” he added. “A national towing strike will happen if this continues because you are using your brand to suppress us. You cannot come into our industry and tell us how to live.”
Seemingly‚ the bone of contention between AA and the other industry bodies was a contract that AA recently secured with a large insurance company.
Speaking on the sidelines of the marred event‚ Douglas said: “This deal that King Price and AA is going into now is being sprung on us and is bad for us towers across the country. We have been fighting for a higher rate to be sustainable. It has been 10 years with no price increase for towing. Vehicle prices have gone up‚ petrol prices have gone up‚ everything has gone up for us as operators but nothing has happened in terms of getting us to be sustainable. So now we are earning less‚” Douglas explained.
“This is an unregulated market and because it’s unregulated‚ it means that insurers have used service providers – call centres or middle men‚ like the AA is becoming‚ where they are subcontracting in the local individual associations. What they are doing is that they are making a margin on what they are contracting those services for.
“The insurers are saying we will pay AA and the AA is saying they will pay the tower but they will take money in the middle and what it then does is that they will go to the insurance company and say‚ ‘I can get you something at a cheaper price.’ So over the last 10 years‚ we have had a lot of call centres doing this.”
Douglas said if the contract between King Price and AA was not cancelled‚ other insurance companies could follow in their footsteps‚ resulting in a crash of the towing industry. “Insurers are using their dominant position to say we are the price givers and you are the price takers. This means we‚ as towers‚ keep getting lower rates‚” Douglas said. Etienne Pel‚ chairman of the United Towing Association of South Africa‚ accused the AA of a lack of transformation.
AA CEO Collins Khumalo strongly rejected the accusations. “The AA is committed to paying rates that are fair to towers and we are willing to be transparent. The AA is an NPO and it is owned by members. It is not white-owned. It is the only organisation that is black-benched‚” he said‚ adding that as a black man‚ it was ironic for him to defend the transformation of the company.
Andre van der Merwe of the South African Towing and Recovery Association (Satra) said the AA had in the past called towers together‚ only to sideline them when big contracts emerged.
“The public needs to know what the challenges are‚” he said‚ as officials of the AA tried to muzzle him‚ asking that the focus be solely on the pledge. Khumalo invited him and other the disgruntled tow truckers to join them in transforming and bettering the industry. “Let’s turn a new leaf… You have choice to be a part of the transformation… For those who want to join us‚ they are welcome‚” he said.
Asked why the towing industry‚ which has several different associations to its name‚ failed to unite‚ Khumalo explained that this could only be achieved if they all found a common interest.
The service charter document which was to be signed on Wednesday focused on customers. It listed that the four key areas of focus for the AA was to always be available to members and customers‚ ensure customer satisfaction‚ being accountable and to value its partners and suppliers. By the end of the press conference on Wednesday‚ only Khumalo’s signature was placed on the charter.