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Disgruntled ride-hailing drivers lobby govt on COVID-19 relief fund

Read time 5min 40sec

Aggrieved Uber and Bolt drivers and operators are lobbying government to allow them to be included in the COVID-19 Relief Fund, fearing their vehicles will be repossessed as their business takes a huge blow during the lockdown period.

On Friday, the ride-hailing workforce took their request online, creating a petition on Change.org, which has been signed by over 2 700 people, urging government to include them in economic stimulus plans, which have been introduced to curb the immediate and long-term effects of the coronavirus (COVID-19) pandemic on businesses and individuals.

Since president Cyril Ramaphosa’s announcement of the nation-wide lockdown regulations last month, local businesses have been forced to reconcile with the economic bloodbath the spread of the pandemic is having on their bottom line, with small businesses and independent contractors expected to take the biggest blow.

The government has re-prioritised billons of rands in funds to cushion the blow of the pandemic on various industries, including a R700 million Debt Relief Fund for SMEs, a R3.5 billion fund for the taxi industry and R1.5 billion for the agriculture and food industry.

In the petition, ride-hailing operators and drivers complain they have been side-lined in the disaster relief funding allocation, adding that as independent contractors, they contribute to SA’s economy through value-added tax and rightfully deserve a share of the disaster relief funds.

“Given the circumstances with the COVID-19 pandemic, drivers are out of business; however, they have bills and debts to pay, eg vehicle finance repayments, insurance, rent, utilities and most of all families to feed,” it states.

“Uber and Bolt drivers are neither considered as small businesses nor employees, therefore they are neglected in all forms of relief funds that have been provided for. E-hailing operators have never been able to save money and have always lived from hand to mouth.”

In the US, independent contractors for companies like Uber and Lyft are now eligible for the $2 trillion COVID 19 Relief Fund, after Uber CEO Dara Khosrowshahi wrote a letter to US president Donald Trump last month, urging him to include Uber drivers in economic stimulus funds.

A local Uber driver and owner, who prefers to be identified as David, told ITWeb that since the lockdown started five weeks ago, he has been forced to take home between 20% and 30% of what he earned before the lockdown.

“Since the lockdown came into effect, there is no business, as we're only being allowed to work within the lockdown time constraints stipulated by the lockdown regulations, and ride-hailing companies continue to deduct their 29% commission, making the business completely not viable.

“To make matters worse, drivers have always complained and protested about low wages and high commission rates, which saw some of them defaulting in their vehicle finance instalments and insurance, meaning many of us are not eligible for payment holidays from banks.”

According to David, a large number of Uber drivers have been discouraged and have temporarily stopped reporting for work.

“Look at how much the government has supported the minibus taxi industry; why can’t they do the same for us? Ever since the lockdown, the only support we have received is a R70 payment for sanitisation and protective equipment from Uber,” notes David.

The challenging conditions have led to some desperate Bolt drivers operating outside the stipulated lockdown hours, resulting in some of them being arrested.

Disruption and uncertainty prevail

Gareth Taylor, country manager for Bolt South Africa.
Gareth Taylor, country manager for Bolt South Africa.

According to Cape Town-based tax solutions firm TaxTim, ride-sharing drivers and vehicle owners are required by law to be registered with the South African Revenue Service (SARS) and pay tax via the provisional tax system, assuming the drivers earn above the tax threshold of R83 100 per year.

“Uber drivers are treated for tax purposes as ‘independent contractors’ which means Uber does not withhold PAYE on their salary but the driver themselves are responsible for managing their tax affairs with SARS,” says Nicci Courtney-Clarke, CA financial manager and head of tax at TaxTim.

The e-hailing drivers and operators have turned to independent advocacy organisation Black Business Council to assist in being a mediator in their engagement with the Department of Transport, which they say has not been fruitful this far.

In an e-mail interview, an Uber spokesperson told ITWeb the disruption and uncertainty caused by the coronavirus is being felt by everyone around the world.

“We respect and understand the directives put in place by the government to help flatten the curve. We are actively advocating provincial and national governments that any relief funds, enacted in response to the coronavirus, benefit all independent contractors and freelancers, whether they are taxi drivers, freelancers, or drivers/deliver people on Uber,” comments the spokesperson.

To help create a reliable cash flow, Uber says it has enabled drivers to cash out to their bank account once per day instead of weekly, putting them in control of when they get paid.

“We have also provided further earning opportunities for drivers and delivery people through Uber Direct and Uber Eats, and we are working with preferred vehicle partners to ask that they support drivers in need by reducing the overall cost of their vehicle,” according to Uber.

A Bolt operator, named Sam, who owns one vehicle, told ITWeb his business has been in dire straits since the lockdown was instituted.

“I have not received any income from my driver; everyone is crying. This is why I signed the petition because we are not counted among those that will receive relief funds and government is our last hope. Unfortunately, we have heard nothing from government,” he comments.

Without responding to direct questions from ITWeb, Gareth Taylor, country manager for Bolt South Africa, says Bolt welcomes government’s various aid and relief packages.

“Bolt continues to engage with diverse stakeholders, in the public and private sectors, through formal and official channels, to find new ways for drivers to continue to earn an income within the regulations for each level of lockdown, as published by government,” notes Taylor.

The Department of Transport did not respond to ITWeb’s e-mailed questions, despite saying earlier that it would do so.

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