Too much independence makes taxi industry unworkable

Last night on my drive home I saw the spotlights illuminating a small chicken-fenced paddock that was to be one of the project sites for the Gautrain, South Africa’s first high-speed train. (Note that South Africa already has rapid transport, they’re generally called taxis.)

And so, almost 150 years after the Metropolitan Railway started conveying passengers, Johannesburg will get in on the action. The ‘Met’ was the birth of the London Underground, the oldest and biggest underground system in the world.

What I was wondering was whether it’ll take South Africa as long to develop a sustainable transport network as London did. Initially, the underground was massively inconvenient because lines were owned by different firms, making changes clumsy and confusing. Poor planning meant that many lines had to be rerouted later and several stations were simply never opened.

The solution came with the removal of ‘independence’ when financial difficulties made it possible for an American investor to buy out the independent lines and eventually brand the lines as one company, thereby creating a city-wide integrated network, which could then be used to sell the city.

Now while the Gautrain will give South Africa its very own slice of rattling underground, it is unlikely to integrate much while the government is subsiding its inefficiency rather than making it an affordable alternative (much like the Heathrow Express line). Taxis, however, offer the real opportunity (across Africa) to provide a convenient and sustainable service.

There are some serious ‘buts’ though and perhaps some entrepreneurial minds can tackle these more succinctly, but here are some of the ‘buts’.

Firstly, the multitude of independent syndicates running taxis will need to be rationalised down to many less than 10 and will then need to be branded appropriately. ‘Banged-up taxi’ is not a brand.

This has quite a few advantages both socially and economically. Taking it to the extreme, a monopoly can’t incite taxi violence over routes, unless –of course– a boss is silly enough to shoot himself in the foot. Hopefully in this case market forces will prevail and someone (like the American investor) will quickly buy his operating licence and take over the fleet. (Taxi violence is the absurd situation where taxi drivers shoot the drivers of any other form of transport because they somehow believe they have a right to a particular route. Supply and demand fundamentals are never questioned.)

And the operating licence is the next thing. Independent syndicates are difficult to regulate (aka ‘police’). If the risk is real that you may lose your licence if your drivers decide to drive double the speed-limit, because it’s unfair that the Gautrain, at 160km/h, can now out-speed them, then you’ll explain to your drivers that life isn’t fair. Other small offences will quickly fall away too as it becomes possible to fine the operator, who can then take action on the particular driver.

So while I definitely don’t see the Gautrain being the answer to Gauteng’s transport problems, I can see a gem of an opportunity for an entrepreneur who’s willing to buyout all the little syndicates to create a real metropolitan transport solution. This could be sorted out even before the Gautrain's expected launch in 2010.

The next step would be to look at route planning. Inclusively is a lovely ideal, but if there are too many stakeholders it becomes cumbersome and unworkable. Just a look at the EASSy cable shows this clearly. A small group of key players will be able to negotiate with government and possibly set up a company that will build, maintain, and label taxi stops with timetables. Such a company could be something more for entrepreneurs to have a look over and maybe, just maybe, the government will come to the party too.

And maybe, just maybe, the next time I jump on a taxi I’ll know for sure where I’m going and what time I'll arrive.