Overlooking the obvious in the taxi debate

There is one thing that can be said about the Kombi taxis in South Africa: everybody has an opinion of them and most of the time the opinion is that they’re bad.

People believe that the vehicles are unsafe and dangerous. They worry about the continuing violence that has shadowed the industry through more than a decade. And, they feel that drivers are blinded to the rules of road safety by the need or desire to transport more commuters.

They might be right about all of this in any given case. Some taxis are unsafe. There is, sadly, some continuing violence and, some drivers face so much pressure to carry more passengers that they may drive in a reckless manner. Conversely, in any given case they could be wrong: a solicitous driver might be behind the wheel of a sound vehicle. However, the sense that the industry is a mess that must be fixed prevails.

In order to address concerns about Kombis, the government has spent years negotiating the Taxi Recapitalisation Programme (TRP). The programme is supposed to fix the broken taxi industry, primarily by addressing the issues of safety and overcrowding. It requires taxi owners to take their old Kombis off the road and replace them with new 18 or 35-seat vehicles. In return, the government will give taxi owners a R50,000 subsidy to purchase the new vehicles. New vehicles are presumably safer than the old ones and, because they are larger, maybe drivers won’t be tempted to cram passengers in like sardines.

But, consider this: nothing about the TRP addresses the problems of South Africa’s road infrastructure. Taxis are perceived as a nuisance or worse in part because the road system cannot effectively handle them. Car drivers complain that taxis stop in the middle of roads to pick up or let out passengers, but too few roads in South Africa have pull-off areas dedicated to this purpose. People rail against the number of taxis on the roads, but don’t mention the fact that roads built during the apartheid era to connect townships with urban centers are inadequate to handle the exploding township populations. A chorus cries that taxis weave in and out of traffic, creating hazards for other drivers, yet there are no dedicated taxi lanes that would provide a clear, and restricted, place for taxis to operate.

Because the TRP does not address any of these problems, South Africans can expect newer, larger taxis to continue stopping in the middle of the road and weaving in and out of traffic. And, while the overall numbers of taxis on the road might decline, it is unlikely that the traffic congestion on major roads into and out of townships will disappear.

Consider also that TRP does nothing to address the problem of inadequate enforcement of traffic and safety regulations. The programme does not require the police to bear more responsibility for ensuring drivers behave in a safe and courteous manner by consistently ticketing those who fail in this respect. Nor does it say that a police officer who allows a clearly unsafe, or overcrowded, vehicle to remain on the roads after an inspection will face a penalty him or herself. So long as the police fail to enforce the traffic and safety regulations in an impartial and evenhanded manner, some unsafe and crowded vehicles will be on the roads.

Note also that nothing about the TRP changes the incentives that Kombi owners, and hence drivers, face. Owners are in the business to make money, not to perform a charitable service. Their goal is to make a profit and this means that the costs (broadly defined) of operating their vehicles must be lower than the revenue they generate. If owners do not get this equation right they go out of business.

The TRP will make it more costly for many of these owners to do business. They must purchase new vehicles with a subsidy that will not cover the full costs of the taxis. In addition there will be numerous other compliance costs implemented that will raise the costs of doing business for the owners. For people who own one taxi or a few taxis—the small-scale operators—these extra costs may well be enough to put them out of business or, they may be sorely tempted to overcrowd these new taxis to close the revenue gap.

Of course, some people might applaud this, as it may clear space on crowded roads, but with the loss of taxis goes the loss of jobs directly and indirectly tied to taxis: drivers, washers, mechanics, hawkers, etc. This says nothing of the extra costs commuters will now face. The owners who are large enough to absorb these additional costs will, however, still want to move as many commuters as possible in as short a time as possible.

So don’t expect taxi drivers to slow down, to stop weaving in and out of traffic, or not put 21 people in an 18-seater. Don’t expect this unless and until the police do their job more effectively. And, expect to stop abruptly as the new larger taxis stop in the middle of the road to let off their customers. Without turn-off areas, this will continue to happen. But the blame for this does not rest entirely at the doorstep of the taxi owners. Poor infrastructure and law enforcement are also to blame. All of this suggests that, unfortunately, the TRP is not likely to erase South Africans’ low opinions of taxis.

Author: Karol Boudreaux is Senior Fellow, Mercatus Center at George Mason University, and author of the study, Taxing Alternatives: Poverty Alleviation and the Taxi/Minibus Industry, which is to be released on 24 March 2006 and forms part of the Enterprise Africa! project funded by the John Templeton Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the Mercatus Center, the John Templeton Foundation or the members of the Free Market Foundation.

FMF Feature Article/14 March 2006