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

Published on:

20 May 2014, 7:52 am

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