Uber cash could spell trouble

JOHN HARVEY

“There will be war.” This is the ominous warning from both traditional meter taxi drivers and those who have partnered with internet ride-sharing service Uber, which today rolls out a cash payment option in five cities across South Africa.

The move marks a significant break from Uber’s policy of only accepting credit card payments in the country, and follows similar pilot projects in Nigeria, Kenya and Singapore.

However, meter taxi drivers based in the southern suburbs believe the measure will only escalate tensions, as Uber will now essentially operate as a traditional taxi company, but without the legal and logistical restraints imposed on meter drivers.

The relationship between Uber and meter taxi companies – as well as some of its ride-share partners – is already strained following Uber’s decision in April to cut prices by 20% in South Africa.

This meant that the price per kilometre had been decreased from R7.50 to R6 in Cape Town, Durban, Johannesburg and Pretoria.

The cash payment pilot was announced by Alon Lits, general manager of Uber sub-Saharan Africa, last Friday, May 20.

“We’re always looking at how we can make it easier for people to benefit from the convenient, safe and affordable option of taking an Uber. This experiment will help us understand whether riders and driver-partners welcome the choice of paying by cash or card. As before, all trip details are electronically recorded and riders will always be able to pay by debit or credit card if they prefer,” he said in a statement.

“Offering cash as an alternate option has proven to be very successful for Uber. The introduction of cash in Singapore, for example, had an extremely positive response and this is a country that has a substantial credit card penetration and very high GDP per capita.”

But John Williams, a senior superintendent at the Claremont Meter Taxi Association, warned the move would result in a full-blown “taxi war”.

“Of course there is going to be violence. Uber is taking people’s livelihoods away. We are angry, and there’s already huge pressure on us to make ends meet,” he said.

“When Uber came out in South Africa, it was really meant for the corporate guys. You had Uber Black, your luxury vehicles which business people could afford to use. At that time (2013) there were only around 300 Uber drivers in Cape Town, but now you have more than 4 000 drivers, and many of them don’t even have their operating licences.”

Mr Williams said it was “ridiculous” that Uber was asking passengers to pay R6 per kilometre.

“This isn’t only affecting us as meter taxi drivers, but their (Uber) drivers as well. Uber is a platform based in the United States. They don’t give a damn about how much we have to pay for petrol in this country, or the maintenance and insurance we have to pay on our vehicles. They get their 25% commission on each driver’s fare, and that’s all they care about.

“I actually cannot understand how South Africa can allow this. This American company isn’t even being taxed, like we are as local taxi drivers are. We are sending money out the country.”

He revealed that some Uber drivers were themselves so disillusioned that they had even approached meter taxi drivers in order to seek advice on how they might enter the meter industry.

“What we are increasingly seeing is that there are non-South African drivers who are signing up as Uber drivers. These people aren’t even properly licensed, but there’s no one to check on them. They go wherever they want, all over town, whereas we are restricted to certain areas by virtue of our licensing agreements.

“I’ve even heard there have been five guys using the same licence driving for Uber. It is just a matter of time before this situation gets completely out of hand and there’ll be violence.”

Taxi driver Alvin Jacobs, described Uber’s rates as “an offence to us”.

“They (Uber) are operating on overseas rates, but they just don’t care what the situation is in South Africa. The thing is they are misleading people with this R6 per kilometre. They are actually deducting double the amount (from drivers) at the end of the day,” he said.

Uber driver Julian Wenn concurred that unless Uber changed its policies and considered South Africa’s economic situation, tensions could well boil over into violence.

“As Uber drivers we are covering all the costs, yet Uber is taking between 20% and 25% commission from us. We have to pay for everything, our airtime, our petrol, the fast food we have to buy on the road because we are never at home,” he said.

“I would basically call this slavery. We are on the road between 16 and 18 hours a day, but they don’t care about that. All they want is their commission. It’s like the master saying, ‘Here, we will give you a little bit by signing up, but now you must be our slave’. We are being paid a pittance.

“I am very worried about what might happen. Things will get ugly, and there will be war. I think the time has come for us to meet with a union like SATAWU (South African Transport and Allied Workers’ Union) to act as a moderator, before it’s too late.”

However, Uber spokesperson, Samantha Allenberg, refuted many of the claims, and said for more than two years the company had a number of constructive meetings with relevant stakeholders and policy makers on a city, provincial and national level.

“Policy makers have embraced our technology and provided much needed clarity on how driver-partners should be licensed, which has been very useful,” she said.

“Driver-partners operating on the Uber platform have completed the requisite steps in applying for their operating licences, under the current National Land Transport Act (NLTA). Recently the national Department of Transport announced in Parliament that it will complete work on a National Land Transport Act Amendment Bill. This follows commitments by the City of Johannesburg and the City of Cape Town to introduce E-Hailing Services by-laws. This demonstrates the regulator’s commitment to ensure that the legal framework enables innovation.”

She also dismissed claims that Uber was taking money out of South Africa.

“Uber is a significant net contributor to the local economy. We’re creating new economic opportunities for thousands of people in each city where we operate in South Africa. The lion’s share of the revenue generated goes to the driver and stays local. This is very different from many other tech companies,” she said.

“Uber partners are not employees but independent operators who are responsible for their own tax affairs. However, we give them the necessary information to report based on national requirements.”

She added Uber complied with all applicable tax laws, and payed the relevant tax in every territory it operated in.

“This includes corporate income tax, payroll tax, sales and use tax.”

Responding to allegations that non-South African drivers were operating on a single licence, she said all necessary operational documentation was checked before a driver profile is activated.

“All drivers must further undergo a background screening process before they can use the Uber app.”

Of the driver-partner concerns about the price of petrol and price decrease, she said: “A driver who is logged into the Uber app is doing one of three things: sitting idle while waiting for a trip, on their way to pick up a rider, or carrying a rider to their destination. The third scenario is the only time a driver is earning a fare.

“Price cuts boost demand so more people are requesting more rides with Uber, meaning drivers will spend more time with riders in the backseat and less time sitting idly waiting for a request. “