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SA ride permit system ‘broken’

Despite the amendments to the National Land Transport Act, ALON LITS, General Manager, Uber in Sub Saharan Africa, believes that many premature given that the necessary, well-functioning systems and processes are not yet in place to make these regulatory changes viable.

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The spirit and intention of the amendments to the National Land Transport Act No 5  (NLTA), 2009 put forward by the Ministry of Transport are to be commended. It is especially pleasing that these amendments include ridesharing and e-hailing operators and drivers as legitimate participants in the country’s public transport system, which point to government’s willingness to embrace the changes and innovation taking place in the country’s transport industry.

However, there are aspects of the proposed amendments that are, at best, premature given that the necessary, well-functioning systems and processes are not yet in place to make these regulatory changes viable.

Of particular concern are the significant financial penalties that will need to be paid by ridesharing and e-hailing companies whose independent operators are found to be transporting passengers without a legal permit issued by the relevant local authority. These fines can be as high as R100 000 per driver operating without a permit. Apart from being an excessive penalty it is grossly unfair given that a large number of local authorities don’t yet have functioning permit issuing systems and processes in place.

The truth is that the operating permit issuance system in South Africa is effectively broken. The application and issuance processes for operating licenses are fundamentally flawed and subject to extensive delays, sometimes over a year in length.  This situation is exacerbated by the fact that it is very difficult for applicants whose permit applications haven’t yet been approved to get reasons for the extensive delays on the issuing of those permits.

Uber has had extensive first-hand experience with the frustratingly slow process of applying for these permits, with drivers often having to wait months and, in some cases more than a year, for their permits.

Sadly, there appears to be no sense of urgency amongst local authorities to prioritise fixing the flawed permit issuing systems and processes or address the large, and growing, backlogs of permit applications. As such, in order for the proposed stringent permit enforcement rules to be effective and fair to all role players, the long-standing issues around permit issuance first need to be addressed. At the very least, before the proposed legislation amendments are implemented, the National Transport Ministry needs to address the following issues:

  1. Efficient processes and systems must be put in place in all local authorities to allow drivers to easily apply for the operating permits they require
  2. Service level agreements need to be put in place with local authorities whereby they are required to assess applications and issue permits within the prescribed 60-day period.
  3. Local authorities need to be given deadlines by which their current permit application backlogs must be addressed to allow for faster processing of new applications once the amendments are promulgated.

If the Transport Ministry implements the proposed legislation amendments before ensuring that these permit issuance challenges are addressed, many drivers will be faced with the difficult choice of either having to operate illegally whilst awaiting their approved permits and risking significant fines and/or arrest, or stopping operations until they receive their permits, thereby losing what is, for many of them, their only source of income.

As such, if the Ministry of Transport is not able to address these particular challenges, it is only reasonable to ask it to reconsider this amendment and delay its implementation until the necessary infrastructure is in place to ensure it does not impact negatively on the country’s transport industry. The legislators must have been aware of the challenges of passing such a significant law, as the Amendment Bill allows for the Minister to use his discretion to delay implementation of provisions for up to 5 years.

Fair trade and healthy competition are the cornerstones of any effective and growing economy. However, these clauses (Section 66 (7) and Section 66A) of the NLTA amendment, as well as the proposal that regulators be given authority to define the geographic locations or zones in which vehicles may operate, are contrary to the spirit of both. As a good corporate citizen, Uber is committed to supplementing and enhancing South Africa’s national transport system and contributing positively to the industry. If passed into law without the revisions suggested above, these new amendments will limit our business and many others from playing the supportive roles we all can, and should, in growing the SA transport and tourism industries as well as many other key economic sectors.

What’s more, if passed as they currently stand, the amendments will effectively limit South African consumers from having full access to the range of convenient transport options they deserve; which has the potential to harm the reputation and credibility of the entire transport industry.

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