Jobs, skills and lawlessness

It seems the taxi industry is unhappy with the proposed AARTO rules where traffic law infringements will earn drivers demerit points and eventually possibly licence suspension.

One of the reasons given is:

Satawu previously warned that Aarto will result in job losses, as drivers will lose their licences once the maximum amount of demerit points are exhausted, and have a negative impact on the economy.

This demonstrates two of my favourite principles:

  1. Almost everything is partisan. So partisan and self-interested as to make it blind to anything and everything else.
  2. Economics is a mystery.

There isn’t a lack of taxi drivers. There isn’t a lack of a deep pool of resources of potential taxi drivers just waiting to take the place of a recently vacated driving job.

What really surprised me though is that the taxi industry seems to think they are subject to the law than the average joe driving on the roads today. Given the overloading, dangerous driving, smooth-tired aqua-planing, randomly stopping, unroadworthy taxis on the road, not much law enforcement seems to be happening as it is.

Unless AARTO means the bribes will have to go up since the consequences of not bribing are now more serious?

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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  1. Yes, their reasoning is ludicrous, and taken to its logical conclusion, they are essentially admitting that their members are regularly transgressing the law.

    For different reasons, though, I oppose AARTO almost as vehemently. In my opinion it is basically replacing one portion of the traffic management system with an equally ineffective but impressively more expensive system.

    What’s more, I’m not convinced that the portion of the system they are replacing is the biggest problem in the whole. Which makes it worse.

    Q: What is worse than an inability to police and control the traffic laws?
    A: The same inability but *more* costly, with the additional costs skewed towards those compliant with the law!

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