Beyond the Law: Why New Regulations Fail to Solve South Africa’s Ride-Hailing Crisis

JOHANNESBURG, South Africa – The South African government’s move to formalize the ride-hailing industry through the National Land Transport Amendment Bill has been met with cautious optimism and profound skepticism. As analyzed in a report by MyBroadband, the proposed legislation aims to end years of regulatory ambiguity for services like Uber and Bolt by integrating them into the country’s formal transport framework. However, transport economists and industry insiders warn that the new laws conspicuously sidestep the sector’s most explosive and intractable problem: the deeply fractured and often violent relationship between ride-hailing drivers and the very companies they work for.

The bill, which has been years in the making, seeks to create a new category of operator called “e-hailing services” and mandates that drivers obtain a charter permit—a significant step towards recognizing them as professional transport providers. Yet, this top-down regulatory approach fails to address the grassroots economic grievances that have sparked countless protests, strikes, and violent clashes, suggesting that legislative change alone cannot bring peace to South Africa’s digital roads.

The Regulatory Leap: What the New Laws Actually Do

For years, Uber and Bolt have operated in a legal grey area, often clashing with traditional metered taxi operators and local municipalities that argued they were flouting laws designed for conventional public transport. The National Land Transport Amendment Bill represents a monumental shift, finally acknowledging e-hailing as a distinct and legitimate part of the transport economy.

Key provisions of the proposed legislation include:

• Charter Permits: Requiring e-hailing drivers to obtain a specific permit, moving them from a quasi-legal status to a regulated one.
• National Framework: Establishing a consistent national standard for e-hailing operations, replacing a confusing patchwork of conflicting municipal by-laws.
• Formalization: Bringing drivers and vehicles under a regulatory umbrella that mandates compliance with vehicle safety, insurance, and driver fitness standards.

On the surface, these are positive developments. Formalization grants drivers a more secure legal standing and provides passengers with greater assurances regarding safety and accountability. However, this regulatory progress exists in a vacuum, separate from the daily economic realities that define a driver’s experience.

The Glaring Omission: The Economic Power Struggle

The central critique from analysts, and the “one big problem” highlighted in the MyBroadband report, is that the legislation completely ignores the core economic model of the industry. The bill regulates the relationship between the driver and the state, but it is silent on the critically important relationship between the driver and the e-hailing platform.

This omission is significant because the primary source of driver discontent stems from their economic dependency on Uber and Bolt. Key grievances include:

• Commission Rates: Platforms can unilaterally change the commission they take from each fare, sometimes exceeding 25%, which drastically cuts into drivers’ already thin profit margins.
• Algorithmic Control: Drivers have little recourse against deactivation by the platform’s algorithm. A sudden drop in ratings or unsubstantiated customer complaints can lead to a driver being “fired” by an automated system with no transparent appeals process.
• Fare Pricing: Drivers have no say in how fares are calculated. During promotions or “discounted” rides, the lower fare often comes directly from the driver’s earnings, not the company’s commission.
• Operating Costs: All vehicle-related costs—fuel, maintenance, insurance, and financing—are borne solely by the driver, making them entrepreneurs who shoulder all the risk while the platform takes a significant cut of the revenue.

This power imbalance creates a powder keg of resentment. As confirmed by a South African Government Gazette notice on the bill, the legislation focuses on operational licensing but does not mandate fair contractual terms, regulate commission caps, or establish a independent dispute resolution mechanism for deactivations. It legalizes the industry without humanizing it.

Consequences of Inaction: Protests, Violence, and Insecurity

The failure to address these economic tensions has direct and dangerous consequences. The past few years have been marred by:

• Widespread Strikes: Nationwide driver shutdowns that disrupt transport in major cities and often turn violent, with drivers intimidating those who choose to continue working.
• Violence Against Drivers: Attacks on drivers who are seen as undercutting the collective action of strikes, creating a climate of fear.
• Passenger Safety Risks: Frustrated and financially desperate drivers can sometimes lead to unsafe driving practices or altercations with passengers over fares.

By regulating the vehicle and the permit but not the business relationship, the government risks creating a class of “legitimate” but deeply disenfranchised transport professionals. A regulated driver with a charter permit who is still earning below-minimum wage after expenses is not a success story for the formal economy.

The Path Not Taken: Alternative Models and Solutions

Transport advocates argue that for the new laws to be truly effective, they must go further. Solutions that have been proposed include:

• Commission Caps: Legislating a maximum percentage that platforms can take from each fare to ensure driver profitability.
• Due Process for Deactivation: Mandating a fair, transparent, and human-reviewed process before a driver can be removed from the platform, preventing algorithmic injustice.
• Driver Representation: Creating a statutory body that includes driver representatives to negotiate standard terms of engagement with the platforms.
• Cost Transparency: Requiring platforms to clearly show drivers and passengers the breakdown of each fare, including the platform’s exact cut.

Some point to the emergence of driver-owned cooperatives and alternative apps in other markets as a potential future for the industry—one where technology empowers workers rather than exploits them.

Conclusion: A Half-Measure in a Full-Blown Crisis

The National Land Transport Amendment Bill is a necessary but insufficient step for South Africa’s ride-hailing industry. It provides a legal framework but lacks the economic empathy required to solve the sector’s most volatile problems.

In its current form, the legislation treats the symptoms of the industry’s chaos—the legal ambiguity—while ignoring the disease: a fundamentally unequal economic partnership. Until lawmakers are willing to grapple with the power dynamics between Silicon Valley-based tech giants and the South African drivers who power their profits, the cycle of protest, violence, and driver dissatisfaction is likely to continue, charter permit or not. The new laws provide a rulebook for the road, but they offer no map for a more equitable destination.