SANTACO PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON LABOUR

1. SANTACO PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON LABOUR POSITION ON NATIONAL MINIMUM WAGE DATE: 10 SEPTEMBER 2014

2. PRESENTATION CONTENT INTRODUCTION BACKGROUND STATISTICAL INFORMATION TR3 2020 STRATEGY SANTACO STRATEGIC PROJECTS SETTING MINIMUM CONDITION AND WAGES IMPEDIMENTS TOWARDS COMPLIANCE CURRENT COMPLAINCE LEVELS RECOMMENDATIONS

3. INTRODUCTION • The Taxi industry is the industry in South Africa that remains the critical pillar of the country’s public transport sector. • Not only is it the most available mode of transport, it is also the most affordable to the public. It is thus considered the servant for the majority of urban and rural poor. • The STATSSA Survey, released in June 2014 indicates that the taxi industry transport at least 70% passengers per day; • When converted to persons, the taxi industry takes 16,5 million commuters per day, and it plays an important role in the South African economy. • It is critically important that the taxi industry wont exist without driver and operator relationship;

4. BACKGROUNDONSANTACO • The Apartheid dispensation and planning processes were designed to marginalised and systematically exclude black people from the mainstream economy and economic activities, in this regard the Group Areas Act created a new problem for black peopled viz, need for public transport emerged. • The taxi industry was developed as a response to the problem mentioned above. • The Democratic government initiated a process of ensuring that the taxi industry is organised • This was done in the form of the MOU between the then South African Taxi Council (SATACO), National Taxi Alliance (NTA), Provincial Taxi Councils (PROTACOS) and government. The structure which was facilitating this process was called the National Conference Preparatory Committee (NCPC) led by government. • The purpose of initiative was to create a platform together with government towards the establishment of a united structure representing all formations within the taxi industry;

5. BACKGROUND ON SANTACO CONT………. • The late Minister of Transport by then, Cde Dullah Omar (MAY HIS SOUL REST IN PEACE) realised that some formations were operating outside the SATACO Framework and it was revised in April 2001. • Organisations/Structures involved were the Provincial Taxi Councils, National Taxi Alliance and government at provincial and national levels; • All parties committed to bringing about lasting unity within the taxi industry on the basis of transparency, integrity and the establishment of a united body on a democratic foundation; • A National Conference was convened which undertook to be underpinned by the objective of ensuring that all the parties recognize that the structure is authentic representative body of the taxi industry;

6. STATISTICAL INFORMATION – “THE ENGINE BEHIND THE NATION” • REPRESENTATION / MEMBERSHIP BASE • Over 100 000 members • Represents over 90% of Taxi Operators • Major Broad Based Black Economic Empowerment Entrepreneurial concern • Only government recognised industry body • CORPORATE GOVERNANCE • Democratically elected leadership • Subscribes to corporate governance principles and standards • Full annual audits and accountability procedures • MARKET SHARE • Market Leader - Over 65% public transport market share • Moves over 15 million commuters daily (Workforce) • Major contributor to the economy • Contribute 3,4% to the GDP • Employs over – 600 000

7. STATISTICAL INFORMATION • FLEET • Approx – 200 000 taxis • Average number of taxis per owner – 2 • No. of trips per passenger per day – 2,3 • Average monthly kilometres per taxi - 8500 • On average 900 – 1400 new taxis are sold a month • Current fleet valued at approximately – R18 billion • BUYING POWER • Fuel – R18 billion • Insurance – R2,5 billion • Tyres – R600 million • Manufacturing – R2 billion • Vehicle Maintenance – R2,7 billion • Lubricants – R110 million • Labour costs – R4 billion • Vehicle Financing – 4,2 billion

8. TR3 2020 - STRATEGY Vision To re-develop and maintain a leading mass transportation industry moving all South Africans in an affordable, safe and reliable manner. • Mission • To empower operators through the maximisation of development and economic opportunities. • To provide excellent service to all our customers • To develop strategic partnerships and maintain stability and profitability within the transport sector • To empower taxi operators by ensuring beneficiation throughout the industry value chain

9. TR3 2020 STRATEGY - PILLARS

10. STRATEGIC IMPERATIVES

11. REPOSITIONING Repositioning

12. SANTACO STRATEGIC PROJECTS • HLOKOMELA CAMPAIGN • Road safety Campaign (reduce taxi related accident and incidents by 50% by year 2020) • Social Responsibility Projects (The organisation supports and fund various initiatives aimed at supporting and caring for the less fortunate) • SANTACO TRAINING ACADEMY • ESTABLISHED IN 2011, To provide training and skills enhancement for drivers, other employees and operators in the Taxi industry • Training is provided free of charge to beneficiaries and stipends are paid as a encouragement and support mechanism • The Academy is a step towards the professionalization of the Taxi Driver Profession • WiFi PROJECT (WITAXI) • Provision of free broadband access to millions of commuters (inherently from poor backgrounds) • Intended to improve our offering to commuters and improve relations between Drivers and commuters

13. SANTACO STRATEGIC PROJECTS • SANTACO Green – Environmentally Friendly Public Transport • Conversion of Taxis to use greener fuel sources e.g Natural Gas / LPG • Intended to reduce our Carbon Footprint, hence ensuring a healthier nation • INDUSTRIALISATION • Establishment of a local vehicle manufacturing plant • Intend to enhance local content in our value chain and economic development • Contribute to empowerment, job creation and economic growth

14. SANTACO STRATEGIC PROJECTS • PUBLIC TRANSPORT SUBSIDY • The taxi industry is the only public transport provider not receiving subsidy despite being the major transporter; • Government continues to pay subisdy in line with apartheid laws there by discriminating millions of poor South Africans using taxis • Despite our various attempts to have the matter resolved amicably, we are faced with either vto submit or fight; In this regard we will be taking drastic steps including mass action and approaching courts for relief. • ECONOMIC EMPOWERMENT OF THE INDUSTRY • Despite the industry’s contribution to the GDP measured at around 4% and employing over 600 000 and valued at over R40 billion our members continue to live under poor conditions. White capital continues to unfairly benefit and enrich themselves throughout the industry value chain; • In this regard the industry is preparing itself for major battles against this monopolies to ensure that our members benefit throughout the value chain

15. SETTING MINIMUM CONDITIONS AND WAGES • The industry has been engaging with different structures such as the Department of Labour dating back to the initial stages of crafting of the Basic Conditions of Employment Act; • SANTACO was a key partner during the process of developing the first taxi Sectoral Determination which was in force from 2005. The subsequent process towards reviewing the taxi sectoral determinations was not properly coordinated by the Department of Labour. • SANTACO together with Provincial Taxi Councils in all the Provinces played a major role in ensuring the taxi public hearings conducted by the Department of Labour produce positive results; • It must be noted by the Labour Portfolio Committee that the collaboration that used to be there during the first consultations needs to be strengthened or revived; • The taxi industry has been fully behind setting of minimum conditions and minimum wage over the years, and in this case, SANTACO supports the initiative of setting a national minimum wage. We do however caution that due consideration should be given to various options available to achieve an ideal income levels in our society while ensuring mass employment.

16. IMPEDIMENTS TOWARDS COMPLIANCE • The industry should not be seen as a sector that does not want to comply with labour legislative imperatives; • It must be seriously noted that the industry has its own dynamics, such as: • Minimum Wage not easy to implement due to the system of payments like commissions. This creates a problem of ensuring full employment; • Employers depend on drivers checking's • Drivers use some of the monies to pay for their personal things such as dry cleaning , lunch, etc; • In fact through this system that is unstructured, the industry is loosing; lessons learnt during the electronic fares collections are that, R8 000 to R12 000 per week was collected compared to the manual collections which brought between R5 000 to R7 000 per week

17. CURRENT COMPLIANCE LEVELS • Current Taxi Sector Determination

18. CURRENT COMPLIANCE LEVELS • DRIVERS ARE CURRENTLY PAID AN AVERAGE OF R3500 PER MONTH ( 81% higher than the determination) • However drivers take home double the monthly income (above R7000) when all monies taken by drivers are accounted for: • Breakfast, Lunch and Dinner • Pilferage (Leakages) • We are currently over 250% compliant (estimated) • Admittedly we lack in other areas, and need support to comply

19. RECOMMENDATIONS • Collaboration is sought to ensure that the industry is capacitated for purposes of compliance to the Labour legislative framework such as the Labour Relations, Basic Conditions of Employment Act, Taxi Sectoral Determination, UIF, Compensation Act , etc • Collectively create an enabling environment to ensure smooth enforcement of policies; • The industry be fully engaged in determining a suitable and sustainable minimum wage • We wish to further amplify our position as organisation that despite all challenges faced by the industry we are committed to improving and professionalizing the Taxi industry, where conditions of employment are of the highest standards possible.

20. THANK YOU

21. CONTACT DETAILS President: Mr. Phillip Taaibosch 0845588885 Secretary General: Mr. Vernon Billet 0604734437 CEO: Mr Nkululeko Buthelezi 0836612252

22. Thank You