Mr Gigaba, SA is missing the smart mobility revolution



Malusi Gigaba should have spent more on transport in his budget, says entrepreneur Justin Coetzee who presents his take on how South Africa is missing the smart mobility revolution.

WHEN he gave this week’s Budget Speech, Mr Malusi Gigaba faced a lot of sceptical people.

Apart from the unfortunate fact that he just isn’t Pravin Gordhan, he faced a mammoth budget deficit as well some pretty inventive taxes he inherited on things like sugary drinks and tyres. He also had the unhappy task of being the first finance minister to increase value-added tax (VAT) since the 1990s.

The two most anticipated and dreaded worries of taxpayers were realised: the increasing of VAT for the first time since 1993, albeit only by 1%, and a giant 52 cent increase in fuel levies.

So, we’ll be spending more on transport, but what about the government? And what will the government be spending it on? Drought management, social grants and higher education were all emphasised.

What should they have spent money on? In my opinion, they should spend more on transport too.

According to the World Bank, a country’s growth of measured gross domestic product is directly reduced by poor public transport infrastructure, particularly in the forms of “freight congestion, delays and unpredictability, difficulties of conducting business and increasing signs of disarticulation of the labour market in some large cities such as São Paulo, Mexico City, and Manila”.

How much are transport inefficiencies costing us?

Gigaba noted that they have rethought economic projections down from the expected “1.3% growth at the time of the budget to 0.7% for 2017, reaching 1.9% in 2020”.

So, what could positively affect those figures? Transport infrastructure. As Gigaba himself noted, Kenya and Ethiopia are set to grow at 5% and 8% in contrast to us, “due to infrastructure investment”.

Driving the smart city agenda

The trend of the smart city is finding its way into the policy papers of many city plans. From Lagos to Nairobi to Kigali to Cape Town, we see an endeavour to drive the smart city agenda. Several of these “smart” solutions are emerging in the transportation sector.

This is witnessed by the sharp increase in e-hailing platforms and a renewed interest in designing and providing integrated transportation systems. It is evident that any car-centric society is likely to take a similar trajectory towards gridlock as witnessed in most Western cities.

This requires emerging markets to rethink their transportation systems and harness new ways of providing for and planning transport systems. One approach that has gained traction over the past few years presenting new business and operational models in transportation is Mobility as a Service — MaaS.

Citizens need an accountable urban transport authority for each city in South Africa and an empowered regulatory framework to support the reform of the public transport industry in emerging cities. However, the slow pace with which regulation is responding to the increasing need to integrate technology into existing transportation systems is a hindrance to realising an efficient and optimised use of transport infrastructure facilities.

Also, what most people don’t understand is that a fuel hike is easiest for the richest and worst for the poor. Let’s say it took you five litres of fuel to get to work every week. It cost you R14.20 per litre in January, and after the Budget Speech it will presumably cost you R14.49. While this is annoying and certainly does add up at the end of a month or year, it’s usually not ruinous.

But a taxi driver is far heavier on fuel than most private vehicles, and his fuel increase is going to be a lot graver. Where will he make up for that extra cost to doing business? The same ride that cost R10 in January is now going to cost R11.50, let’s say.

Fuel hikes take bread from the poor

Now, that’s a R7.50 increase for passengers per week instead of a R2.45 one for car owners. For a lot of people that’s the price of maize for a week, maybe a loaf of bread. In other words, fuel increases directly impact poorer South Africans putting food on the table.

Infrastructure investment will amount to R948bn over the next three years, so said Gigaba in October. And, in fact, the timing couldn’t be more perfect for a rethink in our transport solutions as a country. There have been 10 years of planning Integrated Public Transport Networks – without enough implementation.

Transport technology startups providing new age mobility services have been pioneering ways of creating transport data and utilising transportation systems. This new data provides insights into travel behaviour, enabling cities to develop integrated transport plans that are multimodal with an objective of reducing the impact of car ownership.

A platform-based approach to managing and providing mobility services unlocks the benefits of a data-driven decision-making approach.

With growing digitisation and connected devices, platforms are a possible solution to bring transport stakeholders together. Platforms bring together different roles and facilitate transactions of value that focus on building lasting relationships.

The challenge therefore for rethinking the transportation system is to balance the three critical components in ensuring that the key players in the provision of transport services benefit from the impending technological revolution. Strategies for the future of mobility in African cities is as much about insight, rapid experimentation, and evolutionary learning. It is a necessity to test new technology-driven operational and business models in the African mobility sector now.

Where in our transportation systems do we see the benefit in coalescing around digital platforms as an incremental approach to managing the transportation chaos currently choking emerging cities? Can a combined mobility service platform that benefits all the transportation stakeholders be realised in emerging economies and how?

Let’s get a move on, Mr Gigaba. And as for the rest of us, we can change the way we move too.


  • Justin
    Coetzee is CEO and founder of GoMetro.

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