E-hailing apps such as Bolt and Uber are expected to see major changes to their pricing in South Africa in the near future.
Recent amendments to the National Land Transport Act (NLTA) now give the Minister of Transport limited powers to set the price of e-hailing rides – something that was previously left in the hands of the platforms.
Fair prices for operators
The revised NLTA are seen by many as a win for the local transport industry, as e-hailing operators have been voicing their concerns over the pricing system for years.
In a recent interview on 702, E-Hailing Partners Council secretary Melithemba Mnguni said that the changes are long overdue as its drivers have protested for this amendment to be signed into law to lay the groundwork for much-needed regulations in the industry.
Common complaints among e-hailing operators concern low earnings, a lack of safety, and poor communication from the companies running the apps.
Uber and Bolt drivers are an easy target for hijackers in South Africa, which has led to the formation of vigilante-like groups to ensure the safety of its members as little is being done in this regard by the app companies themselves, drivers claim.
Many operators also feel that they are underpaid as the high cost of fuel and vehicle maintenance can make it difficult to turn a profit.
“[The amendment] is something that is good for us because, all along, the setup has been inappropriate whereby the e-hailing platforms are the ones that come up with pricing, yet they don’t carry any responsibility as far as operational costs are concerned,” said Mnguni.
Other drivers have voiced concerns about the market being flooded by new participants, rendering it difficult to earn a consistent income.
According to Mnguni, ride-hailing platforms were previously against the changes to the NLTA and have made efforts to scrap the amendment.
Transport minister Sindisiwe Chikunga has yet to reveal how the government plans to revise the pricing structure of e-hailing services, however.
“For now, with the minister coming up with the pricing system, we hope and believe that the process will be inclusive and consider our inputs,” said Mnguni.
Others are less optimistic, as the Ekurhuleni e-hailing association believes the industry will continue to experience the issue of price dumping.
The chairperson of the association, Kenny Moretsele, said that the bill is unclear and vague with regard to the transport minister’s ability to affect prices, which are currently controlled by overseas corporations.
He argued that it is necessary to have regulations in place to ensure that the e-hailing pricing model aligns with the dynamics of the local market.
New laws for e-hailing apps
The changes to the pricing structure of e-hailing apps are just one of the items discussed in the amended NLTA signed by President Cyril Ramaphosa.
Under the new ruling, ride-hailing drivers will no longer be required to use charter permits and meter taxi operating licences in South Africa – something that has been requested for more than 13 years.
The legislation defines a new category of operating licence for these service providers, helping to give the sector more legitimacy and crack down on illegal operators using these platforms.
Provincial regulators are also empowered to withdraw or suspend licences in cases where an operator has contravened the NLTA or the Roads Act.
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