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Uber targets 'revolutionising' SA transport

Cape Town - Internet ride hailing service Uber is intent on changing the way South Africans think about transport, but it is also fighting a what it says dated regulatory framework.

After launching in South Africa, the company has been hit when City of Cape Town authorities impounded over 60 partner vehicles.

"The rationale behind that is that the City [of Cape Town] says that the vehicles don't have the correct operating licences, but from our side, we've been engaging with the province and the city since early last year to try and figure out what exactly is the correct category to fit the product in," Anthony le Roux, Uber general manager for Cape Town told Fin24 on a drive around the city.

Uber has not been shy in its fast global expansion and the company has often attracted controversy over its business model where operators work independently and the service takes a commission from fares.

Cities in the US, UK, Germany and South Korea have seen protests from taxi operators who accuse Uber of flouting regulations on insurance and licensing for public transport organisations.

Key challenge

For its part, the company which is now valued at over $40bn, has also fought allegations of bullying competitors, as it races ahead with city expansions.

"The reality here is that you've got a disruptive innovator coming into the market. You've got a business model that doesn't necessarily fit into any operating licence category and really, this is where you see that innovation is leading the regulation," said Le Roux.

Transportation is a key challenge for major South African centres.


Public transport service in SA falls well short of expectations. (Duncan Alfreds, Fin24)

While the roll-out of the MyCiti bus service has gone relatively well in the likes of Cape Town, large parts of the service are disconnected from the city centre because of an inconsistent transport feeder systems.

In May 2013, then-Minister in the Presidency responsible for the National Planning Commission Trevor Manuel said that public transport in the country was poor and did not serve the needs of the population.

"A large number of our people live in informal settlements far from places of work and depend on inadequate, often unsafe public transport.

"In addition to the low cost-benefit ratio due to high transport costs, getting to and from work often poses dangers when it means travelling during the dark," Manuel said.

Public transport

And the lack of effective transport links also hurt internal trade in SA.

"Crucially, poor transport links and infrastructure networks, as well as tariff and non-tariff barriers, raise the cost of doing business and hobble both investment and internal trade," says the Executive Summary of the National Development Plan.

While it is unlikely that Uber is willing or able to solve all of South Africa's transportation challenges, the success the company has enjoyed among riders gives pause to evaluate what the public transport picture in SA could look like.

"We are changing the way people think about the transportation, and this type of disruption is bound to cause resistance by structures that have been in place for many years," Le Roux said.

He remains bullish about the prospects for the model the firm employs.

"Despite a few individual, country-specific setbacks, the future is bright for Uber and the sharing economy. We believe there is political momentum in many countries to embrace technology services such as Uber, at a time of high unemployment and a floundering economic recovery."

Watch how Anthony le Roux explains the Uber safety procedures in this online video:




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