Uber is among a number of taxi apps which are being deployed in cities in the United States and worldwide. (Paul J Richards, AFP)
Cape Town - Over 800 Uber partner drivers have not collected City of Cape Town letters which would almost guarantee these operators a path to legal licensing.
The legality of Uber is under the spotlight yet again in Cape Town after Fin24 reported this week that traffic police have impounded over 300 cars connected to the service in 2016 so far.
READ: Cape Town clamps down on Uber, impounds 300 cars
This figure already outstrips the 255 Uber cars that Cape Town police impounded between January and November 2015.
Amid last year’s impounds, the City of Cape Town agreed to offer letters of support to Uber drivers to help them with receiving licences from Western Cape provincial department officials.
Subsequently, the city, after vetting partner driver applications, said it signed letters of support for 1 035 Uber drivers - these letters almost serve as guarantees to get licences from the province.
But only 210 out of 1 035 Uber applicants have collected these letters and received licences from the province, meaning the majority of partner drivers operate illegally in Cape Town.
“Obviously I can't explain why they didn't pursue their applications,” Brett Herron, City of Cape Town mayoral committee member for transport, told Fin24.
"We're not nannies. We're not going to follow up with everybody to say why didn't you do it,” said Herron.
Herron further said that he feels frustrated with Uber partner drivers’ non-collection of letters that would help them with licensing.
"I do feel disappointed and frustrated,” Herron told Fin24.
“You know, I was engaging with Uber management in middle of 2014. By the end of 2014, beginning of 2015 we had carved a path for them to operate lawfully almost ahead of where national department of transport was.
“We identified that they should have metered taxi operating permits, that we could look at e-hailing as a standard in the market.
"We found a way that made sense and that we led and we implemented it. Between Uber and their operators, they've really let us down in continuing to operate unlawfully, many of them, despite a path that we paved for them,” Herron added.
But Uber has said that bottlenecks on the (TCT) Transport for Cape Town side are key reasons for why its drivers haven't collected their letters of support.
"We appreciate the efforts from the City of Cape Town on updating the process to licensing. However since the process was updated, and despite requests, the TCT (Transport for Cape Town) has not able to produce Uber with a database detailing which operators had not collected their letters of support," Alon Lits, general manager of Uber Sub-Saharan Africa, told Fin24.
"Neither was it able to provide feedback on which documents were missing in the instance of applications under consideration. This meant that neither ourselves or the operators were aware of the requisite next steps.
"While we understand the administrative burdens placed on TCT, any attempts by ourselves to unlock bottlenecks in working with TCT have been delayed, largely due to a lack of response," Lits added.
Uber’s ‘problematic’ cash option
Moreover, Uber’s move to switch on cash payments in South Africa this year has also frustrated Herron.
On May 26, Uber switched on its cash payments option in Johannesburg, Pretoria, Cape Town, Durban and Port Elizabeth.
But the agreement between Uber and the City of Cape Town was based on the internet service differentiating itself by being an e-hailing offering that accepts credit cards, said Herron.
Seeing as many meter taxis already service the cash market, Uber has to again convince the city that there is an additional demand that warrents the extra supply for cabs that accept cash.
"When we agreed with them (Uber) that they were creating a new market of users, part of that was on the basis that it was electronic hailing, but the other part was that it was a cash-free system and that people would use credit cards to pay,” said Herron.
"And so the switch to including cash at least I believe is in breach of what our agreement was.
“And as I understand it, the conditions that we imposed on the licences, when we agreed to support them, was that it would be a cash-free system,” Herron said.
But Uber's Alon Lits has also challenged this claim by Herron.
"We have additionally sought legal counsel on the matter and are advised that no condition has in fact been violated, despite comments that a violation has occurred," Lits told Fin24.
"Despite requests we still have not been advised as to which condition have we allegedly violated," said Lits.
Lits further said that "there is a long standing prevalence of multiple payment options in the industry without stipulation in the OL (operating licence) conditions".
"A cash payment option only serves to increase convenience for Cape Town riders. It has a zero impact on targeted crime, and gives a large percentage of the community who do not have access to credit cards an option to move around safely and reliably," said Lits.
Letters to be reissued
Herron further said that he expressed his frustrations, regarding uncollected letters and the service's newly introduced cash option, with Uber’s management team last week.
The two parties, in the meantime, are set to attempt to address at least the issue of non-collection of letters of support.
"In my meeting with Uber last week, with the management, they are going to assist us with processing, with getting us to reach this 1 035 that we're already agreed to and as quickly as possible,” Herron told Fin24.
"I think what's going to happen is those people who have now not followed through with their applications, we're going to scrap and we're going to allow a new batch of people to take up that 1 035 licences,” Herron said.
Despite its problems with local regulators, demand for Uber has exploded since it launched in South Africa in 2013.
Over 4 000 Uber driver partners have signed up with the service while the company says it has moved over half a million passengers since launching in the country.
Uber does not employ its drivers but rather partners with them on a revenue sharing model.
Uber's growth in South Africa, though, has sparked clashes with meter taxi drivers in Johannesburg, Cape Town and Durban in the last few years amid allegations that the internet service represents unfair competition.