Durban — Taxi operators have pleaded with the government to rescue them from e-hailing services that are providing stiff competition to them, and which they said benefit foreign countries at the expense of South Africa in terms of tax collection.
Ever since the introduction of e-hailing in the country around 2013, there have been hostile relationships between minibus operators and owners of e-hailing vehicles.
Minibus operators often use violent means to block e-hailing vehicles from operating in certain areas, and this reached a boiling point early this month when e-hailing vehicles were torched in Soweto.
The SA National Taxi Council (Santaco) last weekend used a KwaZulu-Natal ANC workshop on the state of the country’s readiness for a state-owned bank to express its disdain for the e-hailing services and even claimed that some operated illegally.
“In KZN we are sitting with 14 000 … operators of e-hailing, but we are told that the taxi industry should keep quiet,” said Santaco representative Sizwe Mvubu.
Some e-hailing drivers have repeatedly complained about being assaulted by people they believed to be linked to minibus taxis.
Bolt is originally from the Republic of Estonia in northern Europe and it operates in 45 countries in Europe, Africa, western Asia and Latin America, while Uber was launched in 2010 in San Francisco, in the US, and can be found in many countries around the world except Denmark, France, Germany, Hungary, Switzerland and Turkey, where it was rejected to avoid unfair competition.
Mvubu cautioned the government about the “operating payments gateway” system, which he said e-hailing foreign owners used to swindle millions of rand every year that should be going to state coffers through tax.
“In the space of Uber/Bolt, if you pay using a bank card automatically your money goes straight overseas and the country (South Africa) does not benefit.
“In 2017, Uber alone in Gauteng made a profit of R71 million at the expense of government, which only benefited R11m,” he said.
The Daily News, however, understands that Bolt is being taxed for generated revenue since it has offices in South Africa. But Uber, which collects 25% from Uber vehicle owners’ revenue, does not get taxed in South Africa because it does not have physical existence. It is only taxed in its home country, the US.
African Tax Administration Forum (Ataf) CEO Logan Wort said this was a universal tax practice.
Uber and other international digital businesses operate through a system called “permanent establishment (PE)” that allows business activities not to be taxed outside of their home base.
“If you are not physically here, the country cannot tax you. That is the problem with Netflix, Facebook and all of them. That is why for the past three years they have been negotiating a new tax deal with Paris (France) – they are going to announce it next month – about taxing these digital businesses (as it is) a very difficult thing around the world,” said Wort.
Wort said if South Africa could change the law to tax international companies, then Uber would pass the cost on to the vehicle owners. “If you put a service tax for Netflix, Netflix would simply increase the cost of the monthly payment and pass the cost to the taxpayer,” Wort said.
Mvubu also accused commercial banks of making an indirect contribution to the widespread violence in the taxi industry through reckless lending.
“When the banks see you as qualifying to buy a taxi they would approve the vehicle finance without verifying if you are a legal operator. Once they give the car, automatically you take the car and start operating (under e-hailing) without having an operating licence, which results in a conflict,” said Mvubu.
He also blamed the conflict between e-hailing operators and minibus taxi operators on the government’s failure to regulate e-hailers.
“Our taxis are running out of business because of Uber and Bolt, which are favoured by many (commuters) although they don’t know where they (Uber and Bolt) come from.
“It is the Westerns who subsidised Bolt and Uber to destroy the taxi industry’s economy,” said Mvubu.
ANC provincial chairperson Siboniso Duma and his deputy Nomagugu Simelane said the party would have further engagements with Santaco.
“It is true that the taxi industry in its entirety services only black people in South Africa. So whatever decision we are taking must look at the interest of the people who are using the industry,” said Simelane.
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