The taxi strike in Cape Town will cost the local economy billions of rands. However, more severe costs will be felt in the future due to the perception of the Western Cape being tarnished.
The drivers have been demonstrating in South Africa’s second-largest city and main tourist hub against the authorities’ decision to impound taxis that weren’t roadworthy or whose owners hadn’t paid traffic fines.
The dispute swiftly turned violent, with protesters barricading roads, setting buses alight and stoning privately owned cars.
Five people died in strike-related violence, including a 40-year-old British doctor on holiday with family members in the country’s tourist hub.
He was shot after he took a wrong turn while travelling from the airport and was caught in a protest in Nyanga township, the police said.
At least 120 people were detained in connection with other protest-related crimes.
“The taxi strike is officially over,” Geordin Hill-Lewis, the city’s mayor, said late Thursday. “We have reached an agreement.”
Under the deal reached with the South African National Taxi Council (Santaco), the city will continue impounding vehicles that aren’t roadworthy, operate on incorrect routes or don’t have the required licenses.
A task team will draw up a list of other major offences within 14 days that would warrant taxis being seized.
The taxi owners’ association, which distanced itself from the violence, confirmed that the strike was over.
“On the fundamental issues, we seem to be finding each other,“ said Mandla Hermanus, Santaco’s chairman in the Western Cape province. “We apologise to the public for the distress and the inconvenience.”
Efficient Group chief economist Dawie Roodt told the SABC that the context in which the strike occurred is very important.
“The context in which the strike occurred is that of a South African economy in really deep trouble. While the Western Cape is one of those spots in South Africa doing relatively okay, I am afraid this is certainly going to have a huge impact on it,” Roodt said.
“The image of the Western Cape as a safe investment destination in South Africa and the perception of the country will be tarnished.”
This will have a negative impact on economic growth and employment as companies will be unwilling to commit to long-term investments in the region.
Moreover, it will impact the country’s fiscal accounts as the Western Cape is the only surplus province besides Gauteng. In other words, it contributes more to the fiscus than it gets from the central government.
“Many investors are going to say, ‘Even the Western Cape is not safe anymore’,” Roodt said.
Effectively, the Western Cape has now been painted with the same brush as the rest of the country.
In addition to negative sentiment, the taxi strike also had immediate costs in the form of damaged property and lost economic activity, which Roodt estimated to be in the billions.