Central Planning rules Sandton taxis: another kind of monopoly, same wasteful result - Daily Newsletter

Hi there,

Since we moved into the Media Hub at the JSE, I’ve been taking the Gautrain to work. Avoiding traffic helps the blood pressure. And the half hour each-way walk injected an exercise routine into an otherwise sedentary lifestyle. It also opens one’s eyes to the intolerance of pedestrians by Johannesburg car drivers – and unfortunate inequalities in application of the law.

A coven of taxi drivers have annexed the corner opposite the Sandton Gautrain station and along one side of the adjacent Stella Road. Any time of the day you’ll find a long line of their luxury sedans parked on the pavement and a group of drivers sitting around gambling. The taxis all charge the same (excessive) price. That eliminates a massive potential market, only catching the ignorant, usually tourists. And as they wait, drivers waste away the hours while their vehicles stand idle.

There is a much better way. It’s not rocket science. Consider London, New York, or perhaps more appropriately Mumbai where it takes minutes to hail one of the cruising cabs (or tuk-tuks) whose drivers earn in direct proportion to their effort. Fares in most cities are determined by the marketplace. And are within the ambit of users, ensuring the vehicles – and their drivers – are productively employed. Unlike Sandton.

South Africa has potent anti-trust legislation to stop monopolies distorting the economic system. But it is only applied up the ladder. To corporates. Not to screamingly obvious examples where the muscle of a privileged few ensures they reap disproportionate benefits for minimal effort. Centralised planning at its best.

Best,
Alec