Contrary to his previous promise that the government would start subsidising the taxi industry by April 2021, Transport Minister Fikile Mbalula now says his department is preparing a policy draft ahead of consultations on the matter.
Nontando Nolutshungu, an EFF member of parliament, wrote to Mbalula asking for the date for the implementation of the taxi industry subsidy programme.
She qualified her question by stating that, “taxi operators were promised a taxi subsidy which would be implemented by April 2021 and yet almost a year later not a single taxi has received the specified subsidy”.
An upbeat Mbalula pronounced at a taxi industry lekgotla in September 2020 that the subsidy programme was a goal he aimed to achieve by the financial year starting in April 2021.
“The participation of this industry in the subsidy scheme is no longer a pipe dream, but a realisable goal we intend to see (it) becoming reality in the coming financial year,” Mbalula said at the time.
But his written reply to Nolutshungu speaks volumes that the taxi industry is far from being subsidised soon.
A policy draft that would be used for stakeholder consultation was still being prepared for Cabinet, Mbalula said.
“The department is expediting the finalisation of the public transport subsidy policy that proposes specific measures that will be implemented in the short, medium and long term,” he said.
“The policy document makes recommendations for the subsidisation of the taxi industry.
“The department is preparing the policy draft for submission to Cabinet for approval to embark on stakeholder consultation.”
Taxi associations have been calling for subsidisation of the industry for many years, arguing that private-owned bus companies have been subsidised since the Apartheid years.
The Competition Commission found substance in these calls in its Public Transport Market Inquiry final report, published in 2021.
It said while the minibus taxi industry accounted for about 66.5% commuters and buses 23.6%, “there is a skewed relationship between ridership levels and subsidy funding”.
“For instance, minibus taxis only receive 1% of the total subsidy in the form of capital subsidy (taxi recapitalisation),” it said.
The report added that rural-based bus operators were pretty much in the same boat as their taxi counterparts.
It concluded that there should be “equitable allocation of subsidies to the taxi industry and rural bus operators”.
Thabiso Molelekwa, spokesperson for the South African National Taxi Council, said it was surprising that Mbalula was talking about consultations.
He said the taxi industry had been consulted extensively on a draft policy. “It will be concerning if the consultations will still continue,” said Molelekwa.
“We believe that the process has been exhausted. We believe that by now they should be preparing towards finalising with Cabinet for the implementation of a subsidy programme for the industry.”
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