NATIONAL NEWS - A short-term government-backed taxi industry relief fund meant to mitigate the effects of the lockdown on individual taxi owners is in the pipeline. This was announced during a briefing from Transport Minister, Fikile Mbalula, where he outlined sector regulations that would apply in level three.
Government has acknowledged that the taxi industry has been hit hard because of lockdown regulations and has agreed in principle to offer financial support, details of which would be made known to the industry in the coming weeks, he said.
Taxi drivers and owners have welcomed the news of potential financial assistance from government, saying they have been struggling to make ends meet since the lockdown.
Mbalula earlier said that because the industry is not regulated, workers do not qualify for the Unemployment Insurance Fund (UIF) temporary relief payments.
Addressing various stakeholders more than a week ago in Ivory Park, the minister said government was in the process of finalising the modalities to support the taxi industry. According to reports, only taxi owners with legitimate and legal operating licences would receive payment from the relief fund, and it would be announced in due course how other employees within the industry – such as taxi drivers, queue marshals and office administrators – would benefit from the fund in the long run.
The taxi industry has seen a decrease in the number of passengers since the lockdown started on 26 March, after government announced regulations which restricted the movement of citizens. Under lockdown level four, taxis could operate only between 05:00 and 19:00, being limited to 70% of their carrying capacity. Across the country, business in the sector has picked up since the country moved to lockdown level three regulations yesterday (1 June).
On 25 March, as part of the relief measures for small businesses in distress announced by the president, taxis that have been financed by the National Taxi Finance administered by the Small Enterprise Finance Agency (Sefa) were to be granted a three-month repayment holiday, while commercial banks were also considering similar measures.
SA Taxi also offered repayment and insurance premiums holiday to qualifying taxi owners in April while Santaco launched a R3,5 billion fund to assist the industry during the lockdown, but the association is still awaiting a response from the private sector. Instead of a payment holiday, R175 million was paid straight to clients, effectively paying off their interest, according to Vincent Raseroka, Chairman of Bridge Taxi Finance.
The minibus taxi industry is set to be the one of the biggest beneficiaries of the lockdown in South Africa, as the period also disrupted train services while the looming global recession means less people will be able to buy cars, according to industry financier Transaction Capital.
During a recent presentation, it was showed that 68% of taxis that are financed by SA Taxi have been operating during the lockdown, most being active for roughly 58% of their usual operating hours with passenger loads of 70% on average.