"Uber, Bolt reject government’s proposed pricing controls", 27 October 2020

...Uber and Bolt have rejected the price regulatory aspect of government’s planned Economic Regulation of Transport Bill.

...The e-hailing companies have expressed concern regarding...the Price Regulation Determination of price controls, which stipulates that every regulated entity is subject to price regulation in accordance with a price control determined by the regulator...

According to Uber and Bolt, the e-hailing sector is still in its early stages in SA, and such pricing controls will have far-reaching consequences for riders and drivers – potentially resulting in a price hike.

“We do not support the introduction of price regulation – it will distort the market dynamics, be disadvantageous for consumers as well as players in the market given that the South African market is developing and growing with the entry of new participants,” says Gareth Taylor, country manager for Bolt South Africa.

“Such proposed pricing controls will act as a disincentive and market barrier for entry and access to new players as well as drivers and passengers.”

E-hailing platforms and services should, therefore, be exempted from the application of Section 11 in its entirety, as it allows government to directly intervene in the operations and business models of independent transport services, adds Taylor.

The Competition Commission’s Public Passenger Transport Market Inquiry Provisional Metered Taxis and E-hailing Services Report, published in February 2020 for stakeholder comment, reveals that some e-hailing drivers in SA are earning less per trip today than they did in 2013.

This is partly due to more operators entering the local ride-hailing industry.

In light of these findings...the draft legislation further proposes that each regulated entity must submit a proposal to the regulator, requesting approval of a price control for the facilities and services offered by that regulated entity...

Uber told ITWeb that while the economic regulation of the Bill has the potential to improve mobility and job creation for locals and indicates a positive way forward for local e-hailing and the transport industry, the proposed regulations contain a few areas of concern.

“Given the important role that transport plays in enabling people to sustain an income, the cost and flexibility of transport should never be allowed to become prohibitive, in a country where thousands of jobs are being shed and economic conditions continue to worsen,” says an Uber spokesperson.

In terms of the commission’s findings, Uber refutes claims that its drivers’ earnings have been declining.

“The inquiry erroneously compared the minimum fares for two separate Uber products, which have independent pricing...It also does not take into account temporary versus permanent pricing. Therefore, the appropriate comparison for UberX fares is R15 net earnings per minimum fare trip in 2014, versus R18.75 today on minimum fare trips only. It is important to note that minimum fare trips only make up a small percentage of overall trips in the city,” says the spokesperson...