Price shootout: Uber versus normal taxis

It is business as usual for Uber South Africa, the app-based transportation network and taxi company, after a fleet of its vehicles were impounded by Western Cape traffic officials for not having a valid operating licence – appropriate for the kind of service it offers.

A total of 33 Uber taxi vehicles were impounded on January 3, in what the company notes is due to a delay by the city in issuing proper licences to taxi drivers and partners of its service.

Uber partners with drivers who already own a car as well as transport operators who own a number of cars. These partners are then able use the company’s technology for a fee.

General Manager of Uber Johannesburg Alon Lits explains that despite there being the same regulation in place for the taxi industry across the country, the company is being treated differently by different cities.

Motives behind impounding

Issued operating licences are governed by the National Land Transport Act of 2009, which Lits says does not cater for the technology underpinned by the company’s service – but instead, covers largely traditional metered taxi services.

This has effectively raised issues with operators’ license for which Uber drivers fall under, as the company connects with its customers via a cell phone app where they can book and pay for the taxi service.

Lits adds that in Johannesburg, Uber is classified under a charter service operating licence which is “far less onerous” and does not foresee any impounding encounters in Johannesburg.

“We engaged with regulators of all cities and we want to bring regulation for e-hailing [to fit technology based companies such as Uber]. Despite our engagement with the city [Western Cape], the city is still impacted by bureaucracy,” Lits explains.

He says the city pushed its moratorium application to review its meter operating licence in Cape Town three times until December.

“The regulation that is put in place will shut down entrepreneurs trying to enter the market,” he says.

Apart from the discrepancy in the classification of Uber’s operating licence in Johannesburg and Cape Town, Lits says the company’s fleet complies with documentation required for taxi drivers.

All drivers are required to have a Professional Driving Permit (PDP) and drivers must not have a criminal record, says Lits.

There are other documents required for the vehicle used to carry passengers for a taxi service. This includes certificates of roadworthiness, an operator’s card (to acknowledge that a driver is transporting people), commercial insurance and an operating licence.

The impounding of Uber’s vehicles is the latest blow to its controversial service, as traditional meter operators have dismissed the company for its cheaper and competitive fare pricing.

City of Cape Town spokesperson Jean-Pierre Smith supports this view, saying that the city paid attention to Uber’s operating licences as a result of complaints from taxi operators.

“Other meter taxis are observing what the city has done in relation to Uber, to see if the same law is applied. Why should they (Uber) get special treatment? We have seen the threat of taxi violence if the same rules are not applied,” Smith told Moneyweb.

He notes that Uber vehicles are the first to be impounded in Cape Town, out of the 4 000 taxis which have been seized in the last 16 months.

Uber versus meter taxi prices

To put the fare pricing of Uber X (a cheaper line of Uber’s taxi line) into perspective, Moneyweb called four meter taxi services, namely Delta Cabs, Zebra Cabs, Rose Taxis and Orange Cabs, asking for a quote from the Gautrain Sandton Station to O.R. Tambo International Airport.

The respective fares range between R400 to R500. While Uber X pegs its fares for the same route from R231 to R306.

Source: Moneyweb

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