With the proposed increases to fuel levies and taxes going ahead as planned next month, e-hailing drivers in South Africa will see their operating costs rise sharply.
Announced at the end of February, South Africa’s revised fuel taxes are expected to add roughly 21 cents per litre to the price of petrol and diesel, before even factoring in April’s expected fuel price increases.
Ashif Black, Country Representative for South Africa at inDrive, explains that for policymakers, the levy increases may appear modest, but for the millions of South Africans relying on fuel daily, the impact is cumulative.
“Transport costs sit at the heart of economic activity,” he notes.
“When fuel prices rise, the effect ripples outward through supply chains, delivery services and daily commuting.”
“In an economy already facing persistent financial strain, even small shifts in input costs can carry significant consequences.”
South Africans are entering the latest adjustment after years of economic pressure, and analysts and consumer organisations warn that levy increases tend to cascade through the broader economy.
Increased transport costs influence everything from food prices to delivery fees and commuter costs, placing direct pressure on the gig mobility sector.
“For ride-hailing drivers, fuel is often the single largest daily expense,” explains Black.
“When pump prices increase, drivers must either absorb the additional cost, work longer hours to maintain income or increase fares to remain financially viable.”
He notes that none of these options is straightforward in the local market, as riders are becoming more cost-conscious.
Many ride-hailing services in South Africa rely on algorithm-driven pricing systems to calculate fares in real time, while services like inDrive allow operators and passengers to negotiate fares.
This approach allows drivers to factor in real-world expenses, such as rising fuel prices, while giving passengers the flexibility to choose options that best fit their budgets, instead of relying on an algorithm.
“However, when operating costs such as fuel fluctuate sharply, even inDrive drivers often have limited direct control over how those costs are reflected in fares,” says Black.
The far-reaching effects
Small and medium businesses in South Africa rely on affordable, flexible logistics services to move goods between suppliers, warehouses and customers.
This includes services, such as inDrive Freight, that support businesses that cannot afford their own vehicle fleets.
“When fuel costs rise, those businesses face a myriad of difficult trade-offs, including an increase in delivery prices,” explains Black.
“For companies operating on tight margins, every additional rand spent on fuel directly affects profitability.”
This results in a chain reaction across the local economy, wherein transport costs increase and goods become more expensive, which ultimately leads to consumers absorbing the costs.
“While the government’s fiscal challenges are well understood, I cannot overstate the reality that policies that affect fuel prices inevitably shape the livelihoods of workers in mobility-dependent sectors,” Black adds.
He mentions that ride-hailing drivers, courier companies, and logistics partners are an increasingly important part of South Africa’s digital economy, providing services that keep cities functioning.
Thus, it is important for South Africa’s policymakers to consider the realities of the growing local mobility workforce as they continue to consider transport policy and fiscal adjustments.
“Ensuring that drivers can earn sustainably while riders can continue to move around their cities is, as such, an economic priority for the country as a whole,” concludes Black.
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