Oliver Tambo wouldn’t have taken an Uber

By Tafi Mhaka

Protectionism is a much-loathed policy in international business. Lax trade rules and lack of laws policing technology-based enterprises across the globe have allowed huge firms from America, like Google, Apple and Uber to prosper worldwide; and do so amid questionable and unethical business practice sometimes.

Revelations of lowly remunerated workers slaving away to make luxurious Apple products in Chinese and Taiwanese sweatshops have done nothing to curb the popularity and sales of the aforementioned high-end goods in South Africa.

The ubiquitous one-way flow of technology-based goods and services from America and Europe to developing nations like South Africa has unfortunately become the hallmark of world trade.

Yet President Donald Trump won a four-year mandate partly on the back of promises he made to renegotiate the terms of the North American Free Trade Agreement (NAFTA), a trade pact he described as “the worst trade deal ever” before the November presidential poll last year.

Highly unpopular shutdowns of businesses in America and company relocations to Mexico have led to a remarkable rise in xenophobia in certain sections of American society and calls for greater protectionist policies from right leaning organisations.

South African companies have not been exempted from losing business to foreign-based corporations. Blue-collar workers are losing jobs to European Union (EU) and US-based companies in an ever-changing industrial landscape.

Metered taxi operators last year held a public protest against Uber in and around the vicinity of OR Tambo International Airport in Johannesburg, in what can only be described as a priceless and ingenious move to bring increased attention to their four-year Uber dilemma and get help and support.

You cannot picture the late Oliver Tambo with all of his revolutionary enthusiasm abandoning the long-established trustworthiness of a metered cab for the consumerist cosiness of a low-cost Uber ride. The protracted struggle for economic opportunities unfolding between the haves and have-nots is somewhat of a timely reminder that small businesses in South Africa are not operating on fair ground most of the time.

Uber is funded by big businesses like Google and Toyota and has received billions of dollars in backing from the Public Investment Fund of Saudi Arabia.

So Uber is certainly not the sort of corporate giant a one-man outfit from Katlehong in Johannesburg can compete with for long without going bust in a big way.  

If things remain as they are, the financial muscle of Uber may possibly overwhelm metered taxi drivers, who have family and children to fend for, very soon.

But small businesses are big business if data from the leading economy in the world is analysed. According to Forbes Magazine, there are roughly 29.6 million small businesses in America, which account for 48% of all jobs in that economy.

Small businesses in South Africa can do much to provide economic opportunities for lowly skilled workers and unemployed graduates if they get technical, financial and regulatory support from the requisite institutions. While the prospect of operating an Uber taxi sounds lucrative and easy to run, Uber taxis are incredibly cheap for customers, so they do not offer excellent returns for partner-drivers.

Travas Kalanick, former CEO of Uber, had to issue a public apology after he was captured on video swearing at Fawzi Kamel, a company driver, in New York on February 5, 2017. Kamel had complained about the fare structure Uber employs and lamented how it was bleeding his small business dry.

The hands-off arrangement Uber utilises works well for its operations, but seemingly impoverishes drivers who bear all of the maintenance costs for their vehicles.

Additionally, save for a driver rating system, Uber offers no safety nets for its valued commuters. It claims to be a tech company that only brings customers and drivers together.

So in the unfortunate event of an accident: Uber holds no liability whatsoever for injuries sustained by the very people who use the ride-sharing app and board private cars under the impression Uber is in control of everything.

In addition – Uber drivers, who are not technically employed by the Internet-based transport company, do not receive medical aid assistance or enjoy security of employment.

Uber also has a befuddling and controversial tax structure that has been widely condemned by EU leaders for the company pays very little in corporate tax wherever it operates.

Alex Cobham, research director at campaign group Tax Justice Network, said: “Uber’s UK accounts confirm the extent to which major multinationals are impervious to policymakers’ rhetoric, and willing to take full advantage of both the weaknesses of international tax rules and of the absence of transparency.”

So should there have been rules in place before Uber was allowed to open its doors to travellers in South Africa? Absolutely. The regulations governing the metered taxi industry took a fair amount of time to catch up with the online-based Uber.

Should Uber be obliged to work in partnership with local metered taxi operators? Definitely. Is it outlandish to suggest that metered taxi drivers deserve the same protection bigger firms are getting from the predacious habits of foreign businesses? Hardly. Some manner of protectionism is required no doubt for the drivers whose businesses face total collapse in the next year or so.

The metered taxi drivers are not fully equipped to compete against Uber and may suffer long periods of redundancy and bankruptcy if measures are not enacted to protect their businesses this year.

Like food manufacturers and workers who are complaining about EU firms dumping cheap chicken on the local – metered taxi drivers are bemoaning the cheap transport Uber has unleashed on South African roads.

It is a no brainer: the metered taxi industry needs our help.