Ride-sharing in South Africa has undergone major regulatory changes, especially with the 2024 updates to the National Land Transport Act. Here’s what you need to know:
- E-hailing Services Are Now Separate: Platforms like Uber and Bolt are officially classified as transport providers, not tech companies, and require specific e-hailing licenses.
- Driver and Vehicle Requirements: Drivers need professional permits, background checks, and medical assessments. Vehicles must meet strict safety, insurance, and roadworthiness standards.
- Platform Responsibilities: Companies must offer safety features like SOS buttons, trip tracking, and data protection under the POPIA law.
- High Commissions Are a Concern: Drivers face rising platform fees (up to 50%), sparking calls for government oversight.
- Penalties for Non-Compliance: Fines, license suspensions, and vehicle impoundments are common for violations.
Staying compliant ensures safety and trust in the ride-sharing industry. Keep your licenses, insurance, and vehicle standards up to date to avoid penalties.
South Africa’s Ride-sharing Legal Framework
How Ride-sharing and E-hailing Are Defined
South Africa’s ride-sharing industry saw a pivotal change in June 2024 with the amendment of the National Land Transport Act 5 of 2009. This update officially recognized e-hailing as a distinct service category under Section 66A, bringing much-needed clarity to the sector. Before this, e-hailing services operated under metered taxi regulations, which often caused confusion and regulatory gray areas.
"It officially recognises e-hailing as a service under the National Land Transport Act 2009, as per Section 66A", explains Melithemba Mnguni, secretary of the e-Hailing Partners Council.
The updated law redefined e-hailing services as transport companies rather than technology companies, ensuring they fall under transport-specific regulations. This change also established a clear divide between e-hailing services like Uber and Bolt and traditional metered taxis. Previously, e-hailing platforms were treated as a subcategory of metered taxis, requiring them to use metered taxi operating licenses.
"All along, e-hailing was recognised through the Practice Note, which puts e-hailing as a subcategory of metered taxis. Going forward, e-hailing will no longer use meter taxi operating licences; instead it will have its own permit", Mnguni clarifies.
With this shift, platforms like Uber and Bolt now operate under dedicated e-hailing licenses, paving the way for more structured oversight and regulation.
Main Regulatory Authorities
The reclassification of e-hailing services introduced a multi-layered regulatory framework involving various government bodies. At the national level, the Department of Transport oversees the overall framework. Transport Minister Blade Nzimande now has the authority to introduce additional rules, such as improving app transparency to give users more information about their trips.
"It opens the door for the Minister of Transport, Blade Nzimande, to institute more rules, including revisions to the Uber and Taxify smartphone apps so that users have a better idea of who their driver will be, which exact route will be taken to their destination and how much the trip will cost", according to LAW FOR ALL Online.
Provincial governments also play a significant role, particularly in managing public transport contracts. They step in when municipalities fail to meet public transport standards. Meanwhile, municipal authorities handle local-level enforcement, ensuring day-to-day compliance with the new rules.
The Department of Trade, Industry and Competition has also become a key player, particularly in addressing driver-related concerns. Many e-hailing drivers have turned to this department for clarity on their employment status and working conditions.
"Drivers who say they are contractors for Uber, Bolt and Didi want government to better regulate the industry and improve conditions of employment. On Tuesday, drivers marched in Pretoria to hand over a list of their complaints to the Department of Trade, Industry and Competition", reports Sibongile Khumalo from Fin 24.
Legal Status and Compliance Rules
The 2024 amendments solidified the legal status of e-hailing companies, officially recognizing them as transport providers with dedicated operating licenses.
"The Act legalises the operations of e-hailers and recognises them as transport companies, as opposed to tech companies, as they were previously registered".
Under the new framework, licensing requirements have been simplified. Instead of navigating multiple permits, platforms now apply for specific e-hailing operating licenses.
"the amendments create a new category of operating licenses for ride-hailing services".
Compliance is enforced at various levels, with operators facing penalties if they fail to meet licensing requirements. Additionally, the National Government has been granted emergency powers to step in during "extreme circumstances where there are gaps in the public transport system". This ensures that transportation needs are met even when local authorities encounter challenges.
This streamlined approach to licensing and compliance lays the foundation for a more organized and regulated e-hailing industry in South Africa.
Requirements for Operators, Vehicles, and Drivers
Operating Licenses and Vehicle Standards
To operate legally, operators need to obtain municipal operating licenses. These licenses are granted only after meeting specific financial, insurance, and safety requirements.
Vehicles, on the other hand, must comply with roadworthiness standards and undergo routine inspections. Comprehensive insurance is a must, covering third-party liability as well as passenger protection. Many municipalities also impose vehicle age limits to ensure passengers ride in newer, well-maintained cars. While in service, vehicles must display temporary identification to confirm their active status.
Driver Permits and Background Checks
Drivers face equally stringent requirements to ensure safety and professionalism.
They must earn a specialized permit, which involves passing theoretical and practical exams focused on safe driving practices, passenger safety, and route knowledge.
Background checks are mandatory, covering criminal records, identity verification, and medical assessments to uphold safety and accountability. Regular medical and fitness evaluations are also required to confirm drivers remain healthy enough for the job. Many e-hailing platforms go a step further, conducting additional checks such as vehicle inspections and in-person interviews to ensure drivers meet both regulatory and platform-specific expectations.
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Platform Responsibilities and Safety Rules
Ride-sharing platforms have a dual responsibility: ensuring the safety of their users and adhering to strict legal standards. This includes protecting both the physical well-being of passengers and drivers, as well as safeguarding sensitive user data. To meet these expectations, platforms must adopt comprehensive safety measures and maintain rigorous data management protocols.
Required Safety Features and In-app Tools
To enhance security during trips, ride-sharing platforms are encouraged – by both regulations and industry standards – to incorporate a variety of safety features into their apps.
One common feature is an emergency response system, typically accessed via an SOS button. This allows users to quickly contact emergency services or the platform’s safety team while the ride is in progress. Another widely used tool is real-time trip sharing, which lets passengers send live updates about their location and trip details to trusted contacts. These updates often include key information like the driver’s name, vehicle description, and estimated arrival time, providing an added layer of reassurance.
To help passengers verify they’re entering the correct vehicle, platforms display essential details such as the driver’s photo, name, and car information. Some apps go further by using a unique trip code that passengers confirm before the ride begins.
Additionally, many platforms offer in-app communication systems that mask personal contact details while enabling necessary interactions between drivers and passengers. Features like route tracking and monitoring also play a crucial role in safety. These tools can detect unusual deviations or stops, triggering alerts if something seems off.
Data Storage and Privacy Requirements
Protecting user data is just as important as physical safety. In South Africa, for example, compliance with the Protection of Personal Information Act (POPIA) requires ride-sharing platforms to enforce strict data security measures. This involves more than just having a privacy policy – it demands advanced safeguards for collecting, storing, and using personal information.
Platforms are required to retain trip-related data, such as location points, timestamps, and payment records. This information is vital for resolving disputes, assisting law enforcement, and ensuring regulatory compliance. To protect this data, companies often use advanced encryption to secure driver and passenger profiles, payment details, and communication logs. Regular updates to these security measures are crucial for countering new threats.
When data is stored outside South Africa, platforms must ensure that international data centers meet the same privacy standards as local ones. Legal frameworks should also be in place to allow South African authorities access to necessary data for investigations or regulatory purposes.
Another key requirement is the use of consent management systems. These systems must clearly inform users about the personal data being collected and its intended use. Users typically have the right to access, correct, or request the deletion of their information, and platforms are expected to handle such requests promptly.
In the event of a data breach involving personal information, platforms are obligated to notify affected users and relevant regulatory bodies without delay. Regular compliance checks, including internal reviews and independent audits, help ensure that platforms remain aligned with data protection standards.
Fares, Commissions, and Labor Rules
The financial dynamics between ride-sharing platforms and drivers remain a heated topic. Unlike traditional taxis with fixed rates, ride-sharing operates on dynamic surge pricing, which adjusts based on demand and driver availability.
How Fares and Commissions Work
The commission structure is a major source of tension between drivers and platforms. In South Africa, Uber’s commission reportedly jumped from 25% to 43% by December 2024, sparking significant frustration among drivers. Santos Maswanganye, an admin of a Facebook group for drivers across various platforms, voiced his concerns:
"Uber has now increased its commission from 25% to 43% and no one is doing anything about this, it’s about time we take matters to our own hands."
Platforms like Uber and Bolt are said to take between 40% and 50% commission per trip, a stark contrast to earlier, more driver-friendly percentages. Zisco Mnguni, spokesperson for the E-hailing Partners Council, highlighted the strain this places on drivers:
"Bolt and Uber tariffs for drivers are now very low, but when it comes to commission, it’s a 50/50 split between owners and drivers. So, the commission is very high compared to what we’re earning from passengers – the fares are low, and the commission is high, not to mention fuel costs. If they could at least reduce their commission to around 20%, it would be much better than what we’re seeing now."
Currently, there are no government regulations in South Africa to cap these commission rates, leaving platforms free to adjust their fees as they see fit. This lack of oversight has led to protests and growing calls for government intervention to establish fairer commission limits.
These high commissions exacerbate the difficulties faced by drivers, who are classified as independent contractors.
Driver Employment Status and Rights
In South Africa, ride-sharing drivers are considered independent contractors, not employees. This classification impacts their rights, benefits, and financial responsibilities. Drivers are not entitled to traditional employment perks like health insurance or paid leave. Instead, they are responsible for covering their own taxes, vehicle maintenance, fuel, insurance, and licensing costs.
As independent contractors, drivers are also unable to unionize or collectively bargain. However, organizations like the E-hailing Partners Council advocate for better working conditions. Many drivers, such as Awelani Mashete, have voiced concerns about rising commission rates, which they claim have reached 48-50%, far exceeding the original 25%.
On the upside, drivers can work for multiple platforms at once and set their own schedules. However, they must adhere to specific platform guidelines, including vehicle standards, customer service expectations, and driver conduct. Falling short of these requirements can lead to account deactivation, with no protections typically available to traditional employees.
To compensate for the lack of benefits, some drivers have turned to private insurance and retirement savings plans. They are also required to maintain comprehensive vehicle insurance for commercial use, as personal policies generally do not cover ride-sharing activities. These added costs further strain their earnings, making fair commission rates an even more pressing issue.
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Enforcement and Penalties
Enforcement measures play a key role in ensuring compliance with established regulations. The Department of Transport, along with provincial and municipal traffic authorities, oversees these efforts, though practices may differ depending on the region. Below is a breakdown of common violations and the penalties associated with them.
The regulatory framework provides for a range of penalties, with fines and sanctions determined by the severity of the offense and whether it’s a repeat violation. Penalties can include monetary fines, license suspensions, or even permanent bans for serious infractions.
Common Violations and Penalties
- Operating Without Proper Licenses: Drivers operating without the required licenses face fines, with repeat offenses resulting in stricter penalties. Vehicles without the necessary permits risk being impounded.
- Vehicle Standards Violations: Vehicles that fail to meet safety standards, lack proper insurance, or don’t display required identification may incur fines. If deemed unsafe, such vehicles can be immediately removed from service.
- Driver Misconduct: Behaviors like discriminatory practices, overcharging, or straying from designated routes can lead to fines and temporary suspensions.
- Platform Compliance Failures: Ride-sharing companies that fail to maintain accurate driver records, conduct mandatory background checks, or comply with data protection regulations face substantial fines and other sanctions. Tax-related violations, such as not properly reporting earnings, can result in penalties from the South African Revenue Service, including back taxes and additional charges.
How to Appeal Fines and Resolve Disputes
Drivers and operators do have options to contest penalties, though processes vary based on the type of violation and the governing authority.
- Traffic Fines: Appeals for traffic-related penalties must be submitted within a specific timeframe, either online or in person at the appropriate office.
- Licensing Issues: Provincial transport departments handle appeals related to licensing. Drivers or operators typically need to provide forms, supporting documents, and an administrative fee. Suspensions often remain in place until the issue is resolved.
- Platform-Related Disputes: Drivers can appeal penalties directly through the ride-sharing platform’s internal channels. This process usually requires submitting documentation and waiting for a review, though reinstatement is not always guaranteed.
For more complex cases, such as those involving multiple violations or severe penalties, consulting a transport lawyer experienced in ride-sharing regulations can be beneficial. Alternatively, mediation services offered by national regulatory bodies may provide a quicker and more cost-effective resolution if both parties agree to participate.
Maintaining detailed, digital records of licenses, permits, insurance, and vehicle maintenance is crucial when appealing penalties. These records can serve as essential evidence during disputes.
For smaller issues, such as disputes over lost income or commission charges, the Small Claims Court offers an affordable and accessible option to seek resolution.
Recent Law Changes and Updates
South Africa’s ride-sharing regulations are undergoing changes aimed at balancing industry growth with safety and compliance. These updates build on the existing framework by introducing new standards and stricter enforcement measures. Both national and municipal governments have rolled out updates that add new responsibilities and clarify existing rules.
National Land Transport Amendment Act Updates
Under the updated Act, ride-sharing operators are now required to secure a national operating license instead of relying solely on provincial permits. This change simplifies the licensing process while implementing stricter compliance measures, such as improved data management systems to track driver credentials and vehicle inspections.
The amendments also introduce higher minimum insurance requirements and impose limits on driver work hours, including mandatory rest periods. Platforms are now responsible for monitoring these standards, with operators facing steeper penalties for failing to comply.
City-Specific Rule Changes
In addition to the national updates, several cities have introduced their own rules. Some now require ride-sharing vehicles to display digital identification tags that are integrated with local traffic management systems. Fare management rules during peak hours have also been revised. New vehicles entering the ride-sharing sector must meet updated emissions standards, while existing vehicles have a transition period to comply.
Local governments are also addressing congestion and environmental concerns by enforcing daily fees in designated zones. In Durban, for example, new measures focus on vehicle safety with enhanced tracking systems and driver training requirements. High-traffic areas now feature designated pickup zones to improve passenger safety and streamline operations.
These updates from both national and municipal authorities aim to modernize the ride-sharing industry, making it safer, more efficient, and environmentally conscious.
Compliance Checklist for Operators and Drivers
To comply with South Africa’s ride-sharing regulations, make sure to submit all necessary documents through the platform’s verification system.
Required Licenses and Documents
Here’s what drivers and vehicles need to provide:
For Drivers:
- A valid South African ID or Passport
- A Professional Driving Permit (PrDP)
- A driver profile photo
- A Safety Screening Certificate
- A Driving Evaluation Certificate (if required)
For Vehicles:
- Vehicles must undergo and pass an inspection at a DEKRA center before being approved for ride-sharing services.
Make sure all documents are accurate and up-to-date to avoid any delays in the approval process.
Conclusion
Following South Africa’s ride-sharing regulations is essential for creating a safer and more dependable transportation network. Whether it’s securing the necessary permits or ensuring your vehicle meets safety standards, these rules are in place to safeguard both drivers and passengers.
The regulatory framework is not static. With the National Land Transport Amendment Act introducing notable changes and individual cities rolling out their own rules, staying informed is crucial for anyone in the industry.
Here’s a quick recap: Make sure your documentation is in order – this includes valid IDs, permits, and up-to-date records. Knowing your rights as a driver and understanding your responsibilities as an operator are equally important for running a successful ride-sharing business.
Keep yourself informed about updates by relying on credible business news outlets.
Compliance isn’t just about following rules – it’s about protecting your livelihood and contributing to the growth of South Africa’s ride-sharing industry. Whether you’re just starting out or managing a growing fleet, staying on top of regulations is non-negotiable.
For timely updates and expert insights into South Africa’s ride-sharing landscape, count on ImotoNews South Africa. They’re your go-to source for clear, actionable guidance.
FAQs
What licenses do e-hailing drivers need under South Africa’s updated National Land Transport Act?
Under the updated National Land Transport Act of 2023, e-hailing drivers in South Africa now need to secure operating licenses from Provincial Regulatory Entities (PREs). These licenses are in place to confirm that vehicles used for ride-sharing meet the necessary legal standards for public transportation.
In addition to obtaining the license, drivers must ensure their vehicles adhere to rules concerning passenger safety, the scope of services offered, and overall suitability for public transport. Meeting these requirements is crucial for staying within the law while working in South Africa’s ride-sharing sector.
How do the new commission rules affect ride-sharing drivers’ earnings, and what protections are in place to regulate these fees?
The revised commission structures in South Africa have had a noticeable effect on the earnings of ride-sharing drivers, with many experiencing a drop in income. Currently, drivers make an average of $250 per week (roughly R4,730), sparking debates about whether they are being fairly compensated for their efforts.
In response to these concerns, South African authorities have introduced or suggested measures like limits on commission fees and stricter regulatory oversight. These efforts are designed to promote fair pricing, safeguard drivers’ earnings, and establish a more balanced system for ride-sharing services.
What safety features and data protection measures must ride-sharing platforms follow under South African regulations?
Ride-sharing platforms in South Africa are stepping up their game to prioritize safety for both passengers and drivers. Key measures include in-app emergency buttons for quick access to help, trip-sharing features that allow users to share ride details with trusted contacts, and round-the-clock support teams ready to address safety concerns. These platforms also collaborate with law enforcement to strengthen community safety efforts.
When it comes to data protection, these companies adhere to local privacy laws, ensuring personal and trip-related information is handled securely. Strict protocols are in place to prevent unauthorized access or misuse of data, offering peace of mind to both riders and drivers.
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