The government wants to introduce subsidies for minibus taxi passengers, Transport Minister Fikile Mbalula has said. Speaking at the launch of the R1.1 billion Taxi Relief Fund (TRF) at the National Empowerment Fund (NEF) head office in Sandton yesterday, he said the transport policy was being reviewed and other forms of transport, such as bus transport, had already benefited from subsidies. Professor Jackie Walters, head of the Department of Transport and Supply Chain Management at the University of Johannesburg, said the issue of subsidies for the minibus taxi industry has been debated for some time, but the government had always faced the dilemma of an appropriate distribution system for such a subsidy because the taxi industry was still largely unregulated. He believed the government was probably planning to extend the taxi recapitalisation project in one way or another – this programme essentially involves exchanging a used minibus taxi for a new vehicle at a subsidised price. Professor Walters said it was not true that the minibus-taxi industry was not subsidised, as the recapitalisation plan involved a capital subsidy for taxi operators. The TRF is a once-off, ex gratia relief fund to help mitigate the impact of the Covid-19 pandemic in the taxi industry. The disbursement of the TRF had been delayed following talks with taxi associations and representative organisations on the conditions to become eligible to receive the funds, said Mbalula. The number of passengers using minibus taxis to get to work had increased to 80.2 per cent from 67.7 per cent of workers in 2013, the minister added. He said that most passengers, however, viewed taxi fares as too expensive, which was why subsidies needed to be considered. Mbalula said that the Department of Transport had an active programme with the collaboration of the industry to address the challenges facing the taxi industry, including the formalisation of the industry, creating the best economic empowerment model for the sector, and addressing issues of unity in the sector. He said public transport operators had faced severe headwinds through the Covid-19 lockdowns, and many jobs and businesses had been lost, particularly affecting cross-border transport operators. He said taxi operators, for instance, were not allowed to operate under lockdown level 5 and were only allowed to operate at 70 per cent of capacity during lockdown levels 4 and 3. Mbalula said the government estimated that each TRF beneficiary, including some 137 000 registered taxi operators, was likely to receive about R5 000, which he admitted was not a solution to the severe financial problems faced by the sector through the pandemic. He said the TRF was merely an offer of some relief, and part of a broader range of assistance provided to businesses throughout the pandemic. Mbalula said the transport landscape in South Africa had shifted in recent years, with Statistics SA data showing that the number of passengers using minibus taxis had risen to about 11.4 million people in 2020 – from 9.8 million in 2013. In addition, public transport demand still had not fully returned to what it was before the pandemic, Mbalula said. He added that the department anticipated the disbursement of the TRF would be wrapped up by March. Among conditions for taxi operators to receive the TRF was for them to be registered with the SA Revenue Service, and they needed to have a transport operators' licence. Source: Adapted from West, E. 2022. Taxi passenger subsidy policies are in the pipeline, says Mbalula Business Report, 11 January 2022 [Online] Available at: https://www.iol.co.za/businessreport/companies/taxi-passenger-subsidy-policies-are-in-the-pipeline-says-mbalula-76371ceb577d-46a0-9d6f-82adb57eb558 Accessed 08 April 2022. Explain the factors that impact the demand for minibus transport.
The government wants to introduce subsidies for minibus taxi passengers, Transport Minister Fikile Mbalula has said. Speaking at the launch of the R1.1 billion Taxi Relief Fund (TRF) at the National Empowerment Fund (NEF) head office in Sandton yesterday, he said the transport policy was being reviewed and other forms of transport, such as bus transport, had already benefited from subsidies. Professor Jackie Walters, head of the Department of Transport and Supply Chain Management at the University of Johannesburg, said the issue of subsidies for the minibus taxi industry has been debated for some time, but the government had always faced the dilemma of an appropriate distribution system for such a subsidy because the taxi industry was still largely unregulated. He believed the government was probably planning to extend the taxi recapitalisation project in one way or another – this programme essentially involves exchanging a used minibus taxi for a new vehicle at a subsidised price. Professor Walters said it was not true that the minibus-taxi industry was not subsidised, as the recapitalisation plan involved a capital subsidy for taxi operators. The TRF is a once-off, ex gratia relief fund to help mitigate the impact of the Covid-19 pandemic in the taxi industry. The disbursement of the TRF had been delayed following talks with taxi associations and representative organisations on the conditions to become eligible to receive the funds, said Mbalula. The number of passengers using minibus taxis to get to work had increased to 80.2 per cent from 67.7 per cent of workers in 2013, the minister added. He said that most passengers, however, viewed taxi fares as too expensive, which was why subsidies needed to be considered. Mbalula said that the Department of Transport had an active programme with the collaboration of the industry to address the challenges facing the taxi industry, including the formalisation of the industry, creating the best economic empowerment model for the sector, and addressing issues of unity in the sector. He said public transport operators had faced severe headwinds through the Covid-19 lockdowns, and many jobs and businesses had been lost, particularly affecting cross-border transport operators. He said taxi operators, for instance, were not allowed to operate under lockdown level 5 and were only allowed to operate at 70 per cent of capacity during lockdown levels 4 and 3. Mbalula said the government estimated that each TRF beneficiary, including some 137 000 registered taxi operators, was likely to receive about R5 000, which he admitted was not a solution to the severe financial problems faced by the sector through the pandemic. He said the TRF was merely an offer of some relief, and part of a broader range of assistance provided to businesses throughout the pandemic. Mbalula said the transport landscape in South Africa had shifted in recent years, with Statistics SA data showing that the number of passengers using minibus taxis had risen to about 11.4 million people in 2020 – from 9.8 million in 2013. In addition, public transport demand still had not fully returned to what it was before the pandemic, Mbalula said. He added that the department anticipated the disbursement of the TRF would be wrapped up by March. Among conditions for taxi operators to receive the TRF was for them to be registered with the SA Revenue Service, and they needed to have a transport operators' licence.
Source: Adapted from West, E. 2022. Taxi passenger subsidy policies are in the pipeline, says Mbalula Business Report, 11 January 2022 [Online] Available at: https://www.iol.co.za/businessreport/companies/taxi-passenger-subsidy-policies-are-in-the-pipeline-says-mbalula-76371ceb577d-46a0-9d6f-82adb57eb558 Accessed 08 April 2022.
Explain the factors that impact the demand for minibus transport.
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