Uber: an efficient and cost-effective way of getting around in Johannesburg
Johannesburg is notorious for being a city which is badly serviced by effective public transport. While Rea Vaya is a cheap and extremely viable option for the inner city and certain main routes, because of Johannesburg’s huge sprawl, there is no door-to-door public transport for suburban areas.
Does Uber comply with industry regulations?
This is where Uber entered the public transport arena some 4 years ago as a very convenient and workable cheap option. Worldwide Uber has stirred huge controversy, loosely based on the impact it has had on existing taxi industries (because of the convenience and the much lower fares), and because, in South Africa, they do not comply with the legislation applied to the metered taxi industry ie they have not been granted the same operating licence which metered taxis are required to have.
Uber’s argument is basically two-fold:
1) they are not a transport company but rather a technology company. Ie they own the Uber App which links riders/consumers with drivers/transport providers. They do not provide a transport service or employ drivers – they partner with independent operators.
2) Although it might not have the operating licence, Uber does in fact adhere to all the requirements of the metered taxi industry: all drivers have to have PDPs (Professional Driving Permits); all vehicles have to have a commercial licence, be covered for public liability, and have passenger liability insurance as well as 3rd party insurance.
Is it safe to use Uber in Johannesburg?
In addition Uber argues that:
- it has more stringent requirements around safety and accountability as compared to the traditional taxi industry. Not only does the rider receive the driver’s name, photograph, vehicle type and vehicle registration on the cell phone prior to pick-up, but the rider rates the driver after the ride so ensuring accountability. Uber drivers also undergo a stringent criminal background check.
- it has strict requirements about model, year and mileage of all vehicles used to transport riders
- any metered taxi drivers can use Uber’s App to boost their incomes
All this is further complicated by differing provincial legislation: in the Western Cape drivers have to apply for a metered taxi licence in Johannesburg they have to apply for a hired limo licence.
Uber : technology company or transport company?
All well and good and partially convincing – Uber has certainly made a difference to consumers and has provided a slick, cheap and safe alternative to metered taxi companies. However, Uber’s argument of not being a transport company is not as clear-cut when one considers that many of the actual drivers do not own the vehicles but are sub-contracted by the vehicle owner . This means that Uber’s ‘operating partner’ might not be a driver at all but rather the owner of an entire fleet of vehicles. Also Uber is directly involved in testing and training its operating partners in terms of city knowledge and professional conduct. So the issue of providing the technology rather than a transport service becomes quite murky.
Growth in Uber in South Africa
Uber has certainly created a great deal of employment – over 2000 licensed vehicles by late 2015 with the intention of creating 15,000 more over the next 2 years. And apparently in the first half of 2105 Uber clocked over 2 million booked trips. However, it seems that drivers (as opposed to owner drivers) do not necessarily earn a good income.
Uber: a viable income generator?
Over the recent festive season I used Uber on various occasions and as always, I engaged the driver to get a sense of conditions of work, revenue, hours worked etc. Of the 8 or so trips, only one driver was an owner-driver and all the others were sub-contracted. Although one driver was paid on a salary basis, the others were all on a commission basis varying between 20 and 25% of the fare, with Uber taking 20% of the fare (for use of the App and their administrative and training role); the owner-driver earning the remaining 55/60%. Bearing in mind that tipping is not customary practice; that 20 trips a day seems generally to be a very busy day; and one can work on a fare of R70 – R120 for a +/- 30 minute fare. Again very general calculations this would come to around R400 odd per day for a top earning day, with some days being significantly less. Of course the increased rates charged with Uber’s surge pricing policy (charging more during peak demand times) would up percentages earned.
Although based on very generalized figures, I still get the impression that Uber drivers are not earning a significant amount of money so it has made me rethink my practice of sticking to Uber’s no-tipping policy.
Downloading the Uber App at Liz at Lancaster Guesthouse
Liz at Lancaster Guesthouse has an extensive information booklet in each room and so guests have access to this information when they arrive. And with our free 50 meg fibre optic high speed internet it makes downloading apps a pleasure.