Taxi myths and morals

• This column was first published in Maverick, a South African business magazine, on 14 June 2007. In full print glory it looks much better, despite the large photograph of me, so do subscribe if you like it.
  

There’s one industry that highlights all the best and worst attributes of South Africa. The trick is figuring which is which.

George Burns supposedly once said, “Too bad all the people who know how to run the country are busy driving taxi cabs and cutting hair.”

In one way, that applies perfectly to the South African taxi industry. But while it embodies the best of this country, it also highlights the worst. Sadly, we often unwittingly condemn the successes and laud the mistakes.

During the final dark years of Apartheid, a legal gap opened up for black entrepreneurs to start what must count as one of the most successful home-grown industries in history. The rise of the minibus taxi disproved a number of myths.

It grew among the poor communities in the townships, where the vast majority of the target market earned no more than labourer’s wages. The industry had no capital base, but that did not deter private risk-takers. They didn’t – and couldn’t – call upon the government to create a tax-funded, state-run monopoly. Nobody argued that mass transit was a “public good” requiring massive infrastructure investment offering a return on investment only in the long term. Nobody said it can only be provided by the state as a public service, lest the poor find they can’t afford fares levied by operators motivated only by profit.

They just got on with it and disproved the myth – still common among the “socially conscious” elite – that the profit motive cannot deliver an essential basic service to the poor.

When you get on a taxi, you’ll encounter the best of universal human values: industriousness, commercial self-interest, flexibility, customer service, efficiency.

At 5:30 on a dark winter’s morning, mothers will be heading to work, so they can send their kids to school, so the next generation will live better than their parents. Passengers hop off to help women lift on board buckets of cooked mielies, which they’ll sell at taxi ranks for a profit. At 7:00pm, darkness having falling, a few stragglers who dearly want to get to Diepsloot club together to buy the driver some fried chicken for the road – the price for his agreement to make that last hour-long round trip.

The drivers are efficient, herding people on and off, and cursing those who forget to signal a stop in time. Contrary to the stereotype, most are brilliant. They’re aggressive, true. They run a tight schedule and will wedge into gaps hardly wide enough for the paint job, but for the most part they’re damn good professionals, at the top of their game. If you’re a fellow road user, you’ll find that if you work with them, they’ll work with you.

The same can’t be said for the condition of the taxis. Far too many are falling apart at the seams. Spanners do service as steering wheels. Bloudraad keeps floorboards from collapsing. Fuel hoses pop off their flanges when a pothole causes the suspension to clatter all the way to the bump stop. A taxi ride isn’t a quiet ride. That said, the mechanical skills and improvisational flair of taxi mechanics are a wonder to behold.

Despite their faults, taxis work. The market filled a need that the government singularly failed to deliver. But while they embody so much that is good about this country, they also illustrate most of what’s wrong.

The most obvious, perhaps, is the racial segregation. For most, they’re still “black taxis”, and most critics have never used one. Unfortunate though this is, the real problems are more critical.

The driver of the ancient bloudraad-floored minibus takes a hand off his jury-rigged steering wheel to wave at a road block policeman. The officer waves back, while a perfectly roadworthy passenger vehicle is pulled over. I wonder when and how the payoff is made. I don’t ask.

Then some government official decides that instead of clamping down on unroadworthy vehicles and official corruption, it’d be a good idea to just give them a ton of cash.

I doubt many officials responsible for the taxi recapitalisation plan have taken taxis themselves, either. Even if they have, the notion that a private industry which has grown from nothing to a quarter of a million vehicles in 20 years should suddenly need taxpayer support is ridiculous. Private businesses take private risks with private capital. Think the goverment will bail you out when your plumbing equipment breaks down? Or your dentistry surgery needs a new X-Ray machine? If everyone else capitalises their own business, why should the government capitalise the taxi industry with your money?

Besides establishing inequality before the law, what is the real problem here? Why aren’t taxi owners investing in their vehicles? That’s simple. Because passengers have no alternatives, so they can’t vote with their wallets.

Private entrepreneurs do spot the gaps, and would gladly run non-association taxis or buses to compete with existing services. Problem is, they get shot by the incumbent cartel.

The meagre state-run transport services fix their prices well above what taxis charge, or risk getting their buses burnt and drivers killed. And the half-baked transport projects that every public official with a grand ego seems to want to launch cost the taxpayer humongous sums, and can likewise operate only with the forbearance of the taxi industry. Even then, they’ll probably end up sabotaged too.

What’s happening here is what often happens in the early stages of the development of a market: mercantilism. The colonial interests, such as the sugar and tobacco planters of the 17^th and 18^th-century Caribbean, got the British parliament to pass laws that barred English ships from trading with non-English colonies, and barred non-English ships from carrying English goods.

They demanded (and got) a government-protected cartel, and when the navy failed to police the monopoly, they took the law into their own hands with acts of piracy and brutal violence. The only beneficiaries were the government-licenced suppliers and merchants. The losers were not only would-be competitors, but most seriously, the consumers back in England.

The taxi industry believes it has a similar moral right to retain its monopoly against all comers. For all the heartening success and object lessons of its entrepreneurial beginnings, it is now manipulating a naïve state for its own ends.

The state should be strictly enforcing vehicle and passenger safety rules. It should be preventing or prosecuting acts of violence and sabotage against transport rivals. It should be creating a legal environment in which untrammelled competition is, well, untrammeled.

Ask a taxi passenger if they’d rather take a safe new minibus or a rusty old skoroskoro. There’s obvious space for competition, but our government doesn’t believe in it. In some other industries, where private cartels don’t take AK-47s and petrol bombs to would-be competitors, the government explicitly bars competition.

Government is not only sympathetic to the monopoly claims of the taxi industry, but it is afraid of the alternatives. For a demonstration, keep an eye on what will happen during the World Cup in 2010. Think the taxis will permit those thousands of expensive bio-hippie luxury buses to steal their lunch? I don’t.

Taxis embody the best of a free people’s capability, adaptability and resourcefulness. But it also exposes the worst of corruption, intimidation, and violence. It unmasks a state incapable of policing the industry’s abuses, and shows that it is neither ideologically or practically capable of acting in the real interests of its citizens.