South Africa legalises ride-hailing services after 13-year wait

In a move long-awaited by the industry, President Cyril Ramaphosa has signed the amended National Land Transport Act (NTLA) into law. This landmark decision paves the way for ride-hailing services like Uber and Bolt to apply for operating licences, officially recognising them as legitimate public transport operators in South Africa.

The amendment comes after a 13-year struggle to update the existing act, which did not account for the rise of ride-hailing services. Previously, these companies operated in a legal grey area, relying on charter permits and metre taxi operating licences that needed to be better  fit for their business model.

“Now that the President has signed the Amendment Bill, regulations will be submitted to the Office of the State Law Advisor for certification and submitted to the Minister for approval,” Transport Minister, Sindisiwe Chikunga said in a statement.

The changes mean that regulations will no longer require ride-hailing services to use charter permits and metre taxi operating licences in South Africa.

“This Bill amends the National Land Transport Act of 2009 to bring it up to date with developments since the implementation and simplifies various provisions or solves problems that have arisen since the implementation, and makes provisions for non-motorized and accessible transport,” added Chikunga.

“The NLTA now reflects our commitment to a modern, inclusive, and efficient transport system.”

This is coming after The Competition Commission’s 2020 report revealed that 79% of ride-hailing operators were providing services without valid licences, underscoring the need for regulatory updates.  

Streamlining the ride-hailing landscape

The amended act eliminates the need for ride-hailing services to use outdated permits and licences. It also grants the Minister of Transport expanded powers to implement regulations and safety measures specific to ride-hailing operations. Additionally, the process of obtaining operating licences will be streamlined.

This move is expected to reduce conflict between metered taxi drivers and ride-hailing drivers, who have previously clashed due to a lack of clear regulations governing both sectors.

In the Commission’s 2020 report, there was resentment by “metered taxis towards ride-hailing services due to the perceived asymmetric regulatory environment which puts restrictions on metered taxis.

“Metered taxis argue that area restrictions imposed by the NLTA put them at a competitive disadvantage as e-hailing services are not restricted to specific geographic areas. As a result, violence between the metered taxi industry and e-hailing operators is a common feature.”

Focus on safety and passenger rights

Former Transport Minister Fikile Mbalula had previously highlighted the significance of these amendments, which not only create a new category of operating licences but also impose obligations on technology providers to prevent illegal operators. 

The amended act also places a responsibility on technology providers like Uber and Bolt to prevent unlicensed operators from using their platforms. Failure to comply could result in fines of up to R100,000.

The legislation also strengthens passenger rights and complaint-handling  procedures, ensuring a more secure and professional experience for ride-hailing users.

“The bill also seeks to strengthen regulations and empower Provincial Regulatory Entities to withdraw or suspend operating licences where an operator has contravened the National Land and Transport or the Roads Act,” said Mbalula.

“It further deals with issues of handling of public complaints and treatment of passengers; colour coding as well as ensuring that SAPS, metro police have no business interest in the operations of public transport.”

It also creates some level of trust as Bolt drivers have been the subject of several misconduct and insecurity reports, which led the platform to block more than 6,000 drivers in the country in the last six months for misconduct.