Taxi-dermy

Gautrain finally gets up and running in earnest in 2011.  For those that don’t know, Gautrain is South Africa’s high-speed underground public metropolitan rail transport system.  Will it spell the death of the taxi industry?  Unlikely, but Ivo Vegter writing for the The Daily Maverick argues that state-subsidised transport between two of the country’s major cities will put an end to many a privately owned and run taxi business.  People often moan about anti-competitive practices by taxi bosses whom they liken unto thugs, gangsters and mobsters.  But it would serve us well if we looked first at the real thuggery, insidiously but nonetheless profusely oozing from the halls of the Union Buildings.

As Vegter explains below, the taxi industry is a thriving example of the success of private sector solutions in areas of the economy we’ve been falsely led to believe are only the rightful domain of the state.  As we have seen so many times before, the state loves to take a thriving sector and butcher it and beat it into mediocre submission using its monopoly control on tax resources and centralised economic power.

Fortunately very little the state tries its hand at actually succeeds.  Long term prediction: Gautrain will eventually be sold to private investors who will raise prices and run it for a healthy profit.  This should again see taxis regain their rightful market-determined place in the world of transport…that is unless we see some radical new transport technology in the coming years that makes all this talk rather redundant…

Enjoy…

The oppression of taxis

by Ivo Vegter

Minibus taxis are a living, thriving argument against modern myths about the limitations of the free market. Now, taxpayer-funded public works projects are threatening the livelihoods of hard-working drivers.

On a recent road trip, I took the opportunity to use minibus taxis. Research, you see.

I chose them as a cheap means of getting from Brooklyn, Pretoria to a coffee date with Daily Maverick editors and friends in Rosebank, Johannesburg. When I arrived, only a few minutes late, Xanthi Payi expressed his astonishment that I’d take my life in my hands, and I was declared blacker than Sipho Hlongwane.

The three-leg route (from Brooklyn to the Pretoria city centre, to Park Station in Braamfontein, and thence to Rosebank) took about two hours. Much of that was accounted for by an accident near Midrand. I never had to wait more than a few minutes for a taxi, no matter whether it was at a rank or along the road. The total fare each way was R46.50.

Not much had changed since I first used them in the mid-1990s.

Although only one of the six taxis I used was one of the fancy new models financed under the taxi-recapitalisation plan, the vehicles are for the most part in good repair.

Drivers are, with few exceptions, highly skilled and professional. Sure, they push into small gaps, but so does most everyone else in Gauteng. At least taxi drivers have the excuse that they’re on a tight schedule, harrassed by taxi owners and passengers alike. If you work with them, they’ll return the favour.

The taxi ranks might look chaotic, but they run like clockwork, and every one has a few fellows on duty who’ll see a lost-looking mlungu and shout, “Speak, friend!”

You still need your arithmetic wits about you if you’re in the front seat, collecting fares and passing back change. You can still use your mobile phone without fearing it will get stolen, and are still likely to find an interesting conversation en route. You still get no mercy from drivers and occupants who find it amusing not to speak English. And you’re still as uncomfortable as everyone else when it’s 34°C outside. Sweat is the great equaliser.

Amid the noise and haste, the minibus taxis got me there and back in perfect safety, perfectly cheaply. It was all very familiar. Why fix what works?

The taxi industry is an icon for what capitalists can do when there is market demand, and entrepreneurs are left free to innovate to meet the demand.

South Africa used to be a country in which the state forcibly moved its lowest-paid working class as far as possible away from their places of work. This evil created a clear need: inexpensive, readily available transport for the masses.

Where there’s a need, there’s a profit opportunity. This was no exception, and so, the minibus taxi industry was born.

That a free market cannot work when the market is poor is one of the myths that it shattered. The relatively low incomes of passengers simply meant that prices had to be low. Profit came only with hard work and impressive economies of scale.

Another myth the taxis disproved is that…read more