South Africa’s bus and coach sector is running out of road

The bus and coach industry is eroding under pressure. As BAZIL GOVENDER reports, government intervention is urgently needed.

SABOA has been canvassing the Ministry and National Department of Transport for well over two years for a Bus Indaba, but no success nor commitment for engagement at this level has been forthcoming.

During this period (and for the prior decade) the bus and coach industry has slid into a declining state of sustainability, to the point where stakeholders and the entire industry value chain are facing a point of no return.

It is concerning to now note that the findings from the South African Road Passenger Bargaining Council (SARPBAC) effectively confirm that the industry is being eroded due to an “almost perfect storm” of Covid-19, macro-economic factors, and depressed localised conditions.

Recent research into the effects of Covid-19, focusing on employment within the industry, reflects a dire situation. The pandemic has directly impacted 40% of industry entities (parties and non-parties) to a point of no return. Parties are defined as entities that subscribe to SARPBAC and the collective bargaining processes, while non-parties are not formally part of the SAPRBAC collective bargaining process. The Main Collective Agreement is, however, now applicable and enforceable to all these entities.

SARPBAC research found that during the Covid period (2019 to present), 32 mainly small to medium non-party companies have closed their doors and are no longer in existence. Of these, it appears that two are attempting to re-enter the market, but it will take a long time for them to re-establish themselves.

The impact on parties was slightly different but still with dire outcomes. Many entities opted for the retrenchment route to ensure sustainability and remain in business. Notwithstanding that option, one party entity has closed down and we are aware of two other entities that are under business rescue.

The consequences of these closures are devastating. The industry has lost approximately 7 000 employees from the measures implemented and the labour environment has, by extension, felt the impact. All 15 unions operating within the industry have lost membership, leaving some unions on the brink of exiting the sector completely. Indeed, union statistics indicate losses of membership totalling around 6 000 members.

This presents a clear picture of the desperate need for industry stakeholders to make a concerted and collaborative effort to stabilise the industry. This will be crucial to ensure survival, as well as to be able to continue to provide employment and a service to our communities, whilst ensuring the nation has access to mobility.

However, the prevailing conditions make for unrelenting pressure on the industry. Here, I refer to:

• the current economic climate
• increased fuel prices
• increasing inflation
• demands from the workforce for higher wage increases
• increased operating costs
• the highest levels of unemployment

Add to all of this an escalating level of crime, intimidation, and extortion of the bus industry from “rogue elements” attempting to further erode the bus sector, and one gets the sense that the industry is “running out of road”.

The industry cannot solve the systemic faults and long-standing policy issues in public transport on its own. The time has come for a Bus Indaba and for the Minister of Transport to urgently engage with the industry.

This will allow for a focused approach to the priority issues to be addressed collectively, with commitment from all social partners. It will create a platform for further policy certainty and thus attract the desired investment into the sector, sustaining the current workforce and generating additional employment opportunities.

The bus and coach industry is the only viable cost-effective option for mass transit, given the failure of the Passenger Rail Agency of South Africa (PRASA) and the time required to get that infrastructure back on track. Employing hundreds of thousands of people (directly and indirectly), the value chain cannot be allowed to crumble any further after already losing 7 000 jobs.

SABOA and SARPBAC thus implore the Minister of Transport and the National Department of Transport to urgently engage the industry.