Jul 12, 2011

Taxi cartels

[Edited and expanded for clarity.]

The South African taxi industry forms the backbone of the daily transport service across the country, especially for the poorer areas, and it is relatively cheap and reliable.  For Americans, "taxi" usually conjures up the classic New York yellow cabs, but here it's a bit different.  A taxi here is usually a medium-size van, most often the Toyota Quantum (pictured), usually carrying 10-22 people.  While there is a brisk business just carrying people around cities, I'd say the majority of the industry is intra-city or -town transport.  People arrive at the taxi rank (the taxi nexus for the area) with
toyota quantum specsa destination, and when there are enough to fill every seat (and sometimes then some), everyone pays and they can go.

However, there is a high degree of cartelization in the industry, something that I've really noticed in the last few months. Every area I've visited is dominated by one or a group of taxi associations, which mainly exist with the purpose of restricting competition and fixing prices. For example: there is tension in the very design of the taxi system—the passengers want to leave as soon as possible, while the drivers want to wait until the taxi is full.  If it's a busy route, the wait isn't long; but if it isn't you can be waiting for hours, and sometimes people prefer to hitchhike.  An obvious strategy here would be to post a departure schedule so you know when the taxi is leaving, or better yet try to coordinate between ranks so that passengers can arrive at the same time.  The ranks, though, often prefer to pin down the traveler by making him pay up front (see below), then waiting as long as possible.  Then, of course, the drivers shout abuse at the hitchhikers as they're leaving town.  And that isn't the half of it. Sometimes taxi hitmen machine-gun buses or competing associations (though overt violence has calmed a bit in recent years).  See here for more.

I see this sort of thing all the time.  Once on holiday we wanted to contract someone to drive us a long distance, thereby avoiding much time-wasting taxi switching at all the intermediate ranks. My friend Noah wrote down an account:
There were 7 of us which is a kind of magic number for inconvenience. It is too few to buy out an entire taxi without spending twice the normal amount but too many to easily fit in a taxi with all of our gear. Choosing thriftiness over comfort, we made it about a third of the way to our ultimate destination by noon. Most of our driving was still ahead of us and we got stuck waiting for a taxi that was not filling up. We paid our fare, piled our gear, circled around and tried to psychically persuade every traveler to get into our taxi so we could get going (at least I did). Fearing we would not make it all the way on time, we started pursuing other options. A few of us started to seek out someone we could pay to take us all the way to where we wanted to go. It was a long shot but if it worked out, it would save us the trouble of a few more taxi ranks. After some searching, we found a willing driver and negotiated until we finally settled on an equitable price. There was still the matter of talking to the taxi rank.

You see, we already paid the fare to take us to the next taxi rank along the route. An honest and forthright business would be unhappy about refunding customers who decided not to partake in whatever service they were offering but would ultimately refund any money. Since we were dealing with a taxi rank, which takes most of its cues from the mafia, we anticipated problems in getting our money back. We decided to use deceit rather than honesty but I am convinced either way would have yielded similar results. A few tried telling the taxi rank office that some members of our party were feeling sick so we decided to stay in town and therefore no longer need a taxi. The taxi rank refused to give back any money. I suppose we had the option of just leaving our money and getting the hell out of there but like I said we are cheap and it would have justified the taxi's bullying techniques by giving them a cool 630R payday (we have principles to uphold). So we stood our ground and an actual argument ensued. I was not part of the team involved in this process and for good reason. I can be a stubborn and spiteful person and this was one of those situations where it was coming out. I was advocating calling the police, this would have taken hours and probably would have accomplished very little but if it had the slightest chance of interrupting and ruining their day, I was for it. I was willing to camp outside the rank and go into monumental debt by paying each customer twice as much as the fare of the taxi to stay home or walk. I was considering petitioning all of the gas stations in the area to go on a trade embargo with all taxis directly involved and kill their fuel supply. I wanted to start an uprising and squeeze the taxi rank out of existence! Thankfully, it was not up to me to handle this particular situation. It was left to more cheery and hopeful individuals who did not get us kicked out of the rank.
Eventually, after a great deal of negotiation, we managed to buy a taxi most of the way through the rank officials, only about 30% more what we would have paid the original guy to take us the whole way.  It was a pain in the ass, but we were over a barrel.

Another story I got from some friends. They were riding in a taxi that, on the way to its Pretoria, picked up someone outside its agreed zone. It turned out to be a sting operation; several other taxis surrounded the first one, all the passengers were forced off onto another taxi, and the offending taxi sent back to its rank. My friends were sent to the other taxi rank, where they were put on another ride to Pretoria, which duly left after a bit. So far, only twenty minutes or so wasted. Then, halfway to town, the new driver asked why no one had paid. "We all paid the first taxi," the passengers replied. He immediately stopped and refused to go further until everyone paid again. Fortunately, the South Africans on the taxi then (quite appropriately) threw an enormous fit, prompting the driver to eventually call his association president, who agreed after some arguing that they could continue.

It should be emphasized that for the most part taxis work relatively well despite the monopolies. It's during abnormal operation, like during a breakdown, or there are a lot of people going home on a holiday, or as when we wanted an unusual service, that the system really shows its flaws. That and the mafia-style turf wars.  In any case, a bit of industry regulation, and more importantly strong law enforcement, would do a world of good for an already fairly-decent public transport system.


  1. I love this post! So the two towns my village is between have had a taxi association war the past several months which has culminated in a difference of prices (and a few wrecked taxis). It now costs 5 rand more to travel from V to T than it does from T to V even though it's the exact same distance. Strange happenings. -Em

  2. Ah the wonders of the free market!