Mochele Noge is the chief executive of PioTrans. Photo: Supplied
By Mochele Noge
If a measure of black economic empowerment is based on ownership and economic transformation, we can green tick the PioTrans model. It is based on Johannesburg’s Bus Rapid Transport (BRT) system, which saw the formalisation of a tenuous cohabitation of sole proprietorships into a corporate entity providing real shareholding for 299 taxi owners and providing formal and permanent employment for their drivers.
When it was first rolled out in 2010, the Rea Vaya BRT initially encountered significant reservations from various stakeholders. Although the BRT’s primary objective was improving public transport, a crucial intention behind the introduction of a high-quality BRT system to Johannesburg was the incorporation and transitioning of taxi drivers and owners into a formal structure.
Yet the process was not without its challenges: the taxi industry was threatened by the project as it diluted the customer base and encroached on routes and taxi operators were concerned with loss of income - 143 buses replaced 579 minibus taxis. This solution was based on partnership: existing minibus operators relinquished their taxi operating licences and withdrew their vehicles, 579 in total, many of which were old and unsafe, from competing routes, in exchange for participation as operators of the new system, and equity.
This process resulted in the formation of a “taxi-owned” bus operating company that previously operated on the BRT routes. The new bus company, Pio Trans, wholly owned by nine taxi operating investments companies (TOICs), comprising 299 taxi operators, resulted in a new group of shareholders being born.
While the journey has had its very unique set of challenges, we cannot deny how taxi drivers have reaped the benefits of formal employment – contracts, a guaranteed monthly income, medical aid, and pensions – bringing certainty to 299 households and their dependants. The model is working, and the opportunity is ripe to broaden the Rea Vaya network and expand the structure.
The BRT system has much potential to contribute to a more usable and sustainable city. Encouraging greater residential densification near current and proposed BRT corridors could intensify land use potential, particularly if processes are put in place to attract public and private investment.
This will lead to increased patronage, which could further be encouraged via competitive ticket prices and incentives for people to travel more regularly or at off-peak times, upgraded cycling and walking infrastructure to make it easier for commuters to access stations and the introduction of park-and-ride facilities to attract more private car-users to the BRT system.
A larger BRT network leads to job creation: drivers, security personnel, cleaners, maintenance and technical staff and managers. This will automatically extend formal employment and broad-based equity to additional taxi owners.
A bigger ownership base will realise the benefits of a well-defined strategy, core to which is a combination of revenue diversification and revenue enhancement. The growth and expansion of PioTrans is a key driver of financial stability and shareholder value with longevity. In an environment where economic growth and development is absolutely critical, any initiatives to retain and grow ownership and equity should be celebrated and encouraged. There is no alternative but to build on this current structure to give it continuance and make it more meaningful.
Mochele Noge is the chief executive of PioTrans.
*The views expressed here are not necessarily those of IOL or of title sites.
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