A chat with SA e-hailing leader, Uhuru Lekgokwane, about racism in vehicle financing
Vehicle financing, or car loans, has always been an important means of owning a vehicle. It began with financial institutions offering financing options to customers and members of groups to acquire them for both private and commercial purposes.
With the advent of e-hailing, vehicle financing has grown into an industry. Especially in a country like South Africa, where cars used for e-hailing have an age restriction by law, the need for newer vehicles isn’t optional.
The President of the National e-hailing Federation of South Africa (NEFSA), Uhuru Lekgokwane, in a chat with Technext, noted that while a significant population of e-hailing vehicles in the country are financed, some are not.
This is because most e-hailing drivers cannot afford new vehicles as required by law.
“If I have money, why should I go to the bank? I just have to buy a car. But the reality is that the economic fortunes of the country dictate that the majority of our people can’t afford that. Therefore, people have to rely on those traditional banking systems to finance their vehicles. The majority of people have financed their vehicles. That’s a problem,” he said.
Yet, he highlighted a few challenges associated with procuring the financing from South African banks: racism leads the pack.
According to him, the major financial institutions in the country are owned by whites, who he claimed have made access to loans incredibly difficult for black drivers.
“In South Africa, to get finance from the bank as a black person is as difficult as having wings to fly to the Mountain Kilimanjaro. Liberty is a financial institution, right in the middle of Sandton. You have a Standard Bank that’s not far away from here. These are huge financial institutions. There’s a problem. They are owned by white people. And the story, as it goes, tells you that they’ve been too hostile towards us (blacks). ,” he said.
He accused the banks of putting stringent requirements that are not easily attainable for black drivers after they have racially profiled them.
“It’s a pure act of racism. It’s a pure act of hate against our people and their economic fortunes. And we need to talk about these things. We can’t shy away from this. These institutions are purely racist,” he said.
Comrade Lekgokwane stressed that driving in South Africa is expensive. Vehicles cost 28 per cent more than in any other country in the world. For example, a Toyota Hilux costs over a million rand ($62,992) while the average price globally is $40,000.
He wondered why the South African competition commission could not investigate the exorbitant pricing.
See also: 5 major differences between e-hailing in Nigeria and South Africa
Moove, others worsened vehicle financing in South Africa
The advent of e-hailing ushered in startups that provide vehicles for drivers. One of these is Moove, which offers a drive-to-own rental system in South Africa using Suzuki and Toyota Corolla cars.
Asked why e-hailing drivers are not opting for e-hailing-focused financing companies like Moove to avoid the racism, Comrade Lekgokwane claimed that these companies, which he described as “third-party elements”, only made the situation worse.
For example, he obtained a Toyota Corolla for between 12,500 and 16,000 rands monthly from Moove, while traditional banks give it out for 4,000 to 5,000 rands monthly. He pointed out that the drivers have protested against Moove several times,
A look at the Moove South Africa website shows their vehicle rental costs between 2,350 and 2,995 rand per week. This puts it at 9,400 to 11,980 rands per month. This excludes a 2,500 rand registration fee.
“This defeats the objective of you being in business to begin with. It defeats the objective of economic advancement as a black person. So we can’t celebrate that. We always call them the third-party element, the rental system that has disadvantaged our people for the longest period of time. It’s Moove, it’s West Bank, it’s PACE, and quite a number of them in South Africa as well. And they’re literally destroying the economic fortunes of our people,” he said.
He added that vehicle financing companies like Moove have partnered with e-hailing platforms such as Uber to further restrict drivers. As a result, black drivers make up less than 13 per cent of other drivers if they acquire financed vehicles.
Providing a better solution to the vehicle financing problem, Comrade Lekgokwane said the drivers’ union, NEFSA, is adopting a model which will bypass the profiteering and racism of financing organisations.
This involves getting business-minded people to partner with. The model has already been deployed, with some success, by the South African National Taxi Council (SANTACO).
NEFSA logo
He said the NEFSA has already begun negotiations with the aim of going into partnerships with these business-minded people, both within South Africa and outside, to bring the model to life for e-hailing drivers.
“We are creating an investment, a vehicle financing initiative, so that we can curtail all these unnecessary challenges our people are faced with, where they just lose lots of money. To us, if people could pay at least a maximum of $6,000 a month, they would have saved a lot of money, almost 60% to 70%. And that’s what we’re heading towards,” he said.
The post A chat with SA e-hailing leader, Uhuru Lekgokwane, about racism in vehicle financing first appeared on Technext.
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