Why the South African state should not subsidize minibus taxi owners

Image: Sipho Ndebele on Unsplash.

Early in July, The Conversation published an article by SALDRU associate Andrew Kerr. In the article Andrew explains that currently the only direct subsidy that South African minibus taxi owners receive is a scrapping allowance upon scrapping old taxies. He argues that minibus taxi operators in South Africa should not be further subsidized because they already receive two substantial implicit subsidies; that most taxi owners do not adhere to labour laws when employing drivers, and that taxi associations appear to be de facto cartels. He concludes that policy makers should rather think about ways to improve competition in the industry, reduce violence and enforce existing regulations. Read the article.