Taxi fare increases will apply from 1 July 2020, putting further financial strain on millions of commuters who have already suffered as a result of the lockdown-induced economic downturn.
Following robust engagements with the Department of Transport and Minister Fikile Mbalula, the South African National Taxi Council (Santaco) — one of the largest public transport associations in the country — announced that taxi fares would be increased to combat the negative financial impact of COVID-19 and the subsequent lockdown.
For months, the taxi industry has languished under a severe bout of inactivity with lockdown Levels 4 and 5 drastically decreasing commuter volumes. Although recent regulatory reprieves allow for a reopening of the economy, stringent health and safety protocols — which limit passenger capacities in minibus taxis to 70% — continue to plague the industry's revenue models.
Mbalula attempts to pacify taxi industry
In an attempt to offset grievous financial losses, taxi associations in Gauteng called for massive fare hikes. The Alexandra Taxi Association (ATA) said that it would be forced to increase its fares by 172% in the coming weeks.
While Santaco rebuked the move to raise fares to unaffordable levels, the Council argued that government had failed to provide the taxi industry with adequate financial assistance. In an attempt to force government's hand, Santaco said that it would support the call for a provincial shutdown of taxi services.
Mbalula revealed that consultations with Santaco and the National Taxi Council (NTC) had averted a proposed shutdown but that expectations placed on government were unrealistic. On Thursday, Mbalula elaborated on meetings with taxi industry stakeholders, noting that while government had committed to provide financial relief, taxi operators would not be fully compensated for lost revenue.
Mbalula added that while taxi operators were well within their rights to raise fares, these price hikes needed to follow inflation trends and not overburden commuters with unaffordable tariffs. The minister noted that, as a fundamental pillar of the public transport sector, the taxi industry needed to remain sustainable while catering to the basic needs of commuters.
The transport minister further explained that consultations with Santaco would resume on 16 June.
Taxi fare increases on 1 July: What you'll be expected to pay
In the meantime, however, Santaco has resolved to support across the board fare increases. While the Council has not yet revealed finer details of the increase, industry insiders claim that fares could likely rise between 10% and 25%.
While this increase is much lighter than those proposed by the ATA, these tariffs increases will be out of line with inflation rates noted by Mbalula.
Santaco is expected to provide clarity on the taxi fare increases in due course.