Public transport faces probe | Fin24
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Public transport faces probe

May 14 2017 06:19
Dewald van Rensburg

The Competition Commission is launching its fifth market inquiry, this time looking to intervene in the fraught public transport sector and its long history of turf wars, selective subsidies and high prices.

Draft terms of reference were published this week indicating that the commission would address the ongoing war between Uber and other app-based taxi services such as SnappCab, Zebra and Ryda on one hand, and the ailing metered taxi sector on the other.

The inquiry will also delve into the minibus taxi sector and the various bus services, as well as the state-owned Passenger Rail Agency of SA and Gautrain.

One theme of the inquiry is the selective subsidisation of transport services – largely bus operators – that disadvantages other providers.

The division of markets by law or force is another key issue that has in the past triggered several “taxi wars”, and has led to repeated attacks on Uber drivers who operate near popular metered taxi pick-up spots.

The draft terms of reference’s initial statement of issues notes that transport costs have escalated substantially – more than doubling between 2003 and 2013, according to one estimate.

“It has been estimated that half of the workers using several modes of transport have their hourly wage reduced by 40% or more due to transport costs,” said the commission.

The draft terms of reference also notes that government’s overall policy objective of “integrating” various modes of transport contradicts the alternative objective of fostering competition to favour the consumer.


The inquiry will evidently take a critical look at the planned expansion of the Gautrain into Johannesburg and Pretoria’s major adjacent townships, Soweto and Mamelodi.

“The pricing of the Gautrain segregates passengers, resulting largely in middle- and upper middle-income passengers having access to the Gautrain,” observed the commission.

“This marker inquiry will help identify the unintended consequences that may arise from the implementation of [Gautrain] expansion plans.”

Regarding Uber and the metered taxis, the draft terms of reference largely focuses on the way old-fashioned metered taxis are price-regulated, while Uber and its peers’ fares are determined by the companies that own the software platforms.

This market inquiry will be the fifth launched by the commission after the first one, into the liquid petroleum gas market, was recently completed.

It will run concurrently with the ongoing inquiries into retail, health and banking, and the commission anticipates it will take two years to finalise.

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