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80% of e-hailing services running without licences: Competition Commission

A report by the Competition Commission indicates that close to 80% of those offering e-hailing services in SA do not have the required operating licence.
A report by the Competition Commission indicates that close to 80% of those offering e-hailing services in SA do not have the required operating licence.
Image: 123RF/ammentorp

Nearly four out of every five e-hailing operators are working without valid licences.

This is one of the key findings of the Competition Commission, which was on Wednesday releasing its two-part provisional report after its inquiry into the public passenger transport market, and e-hailing and metered taxi services.

The inquiry was set up in 2018 after the commission received a number of complaints about the transport industry.

The commission found that 79% of e-hailing operators were providing a service without valid licences.

“No reliable data is available to quantify the proportion of metered taxis that are operating without valid licences, but submissions received by the commission portray a significant proportion operating without valid licences," the report reveals.

According to the findings, while certain provinces and municipalities had issued moratoriums on operating licences, this had not stopped illegal operations.

“Evidence gathered by the commission indicates that some metered taxi operators opted to join e-hailing and continued to use their existing metered taxi licences. However, other operators provide a service without valid licences," the report notes.

The commission also raised violence within the transport industry as a major concern - and said police should consider forming a specialist unit to deal with it.

According to the report, the entry of e-hailing services in SA generated conflict between metered taxi and e-hailing operators.

“At the heart of conflict is metered taxis' view that e-hailing operators have bypassed regulatory scrutiny (as there was no specific regulation governing their business model) and charged low fares," the report states.

The conflict, the report notes, has heightened safety concerns for passengers and operators, hindering normal operations.

The commission also found that there were areas that had been deemed “no go" areas for e-hailing operators. This, according to the commission, hindered competition - and it recommended that area restrictions be lifted.

“Area restrictions reduce competition and their rationale is incompatible with the evolving nature of the markets," the commission said.

To address conflict between metered taxi and e-hailing operators, the commission recommended that a specialised division within the SAPS be created to deal with all transport-related matters.

The inquiry, according to commissioner Tembinkosi Bonakele, was set up to assess the nature of competition in the market and to promote it.

“The inquiry was initiated because the commission was of the view that there were features in the public passenger sector that were distorting or inhibiting competition," said Bonakele.

The draft report will be made final after the commission receives additional submissions from the public. Submissions close on March 31.

Another of the findings in the provisional report was that e-hailing operators and metered taxis faced regulatory challenges with respect to operating licences and “massive" backlogs at the provincial regulatory entities (PREs).

“Backlogs are caused by, inter alia, the absence of directives by the municipalities to the PREs, limited capacity to develop integrated transport plans (ITPs) to inform the directives, general lack of capacity in planning authorities and the PREs, and inadequate stakeholder consultation," the report says.