E-hailing drivers demand action over frozen licence approvals while impoundment fees soar

4 Jun 2025

E-hailing drivers in Cape Town are considering legal action after the City froze licence approvals, leaving them vulnerable to having their vehicles impounded.

E-hailing drivers are up in arms over the City of Cape Town freezing the approval of additional licences since the end of March, when the City claimed it had met its “full allowed quota” of 3,354 licences. It had received more than 14,000 applications.

The City and Western Cape Mobility Department, community and industry groups have been meeting to determine the next steps, with drivers complaining that they have to pay exorbitant impoundment fees for operating without licences.

Looking forward, Councillor Rob Quintas, a member of the City’s Mayoral Committee for Urban Mobility, told Daily Maverick: “The revised supply and demand for metered taxi services, which includes e-hailing, has been determined.

“The City will be presenting the revised metered taxi supply and demand numbers at a Special Metered Taxi Intermodal Planning Sub-Committee meeting on 17 June 2025, and will make this information available to the public.”

Western Cape Mobility Department spokesperson Muneera Allie said: “Once approval is given (to the Permit Regulatory Entity by the City for additional applicants), and a quota is determined… applications will be handled on a first-come-first-served basis.”

E-hailing drivers are required to have an operating licence or risk their cars being impounded by the City, due to an amendment to the National Land Transport Act signed in June 2024.

If there is a continued shortage of operating licences, the Western Cape E-Hailing Association (WCEA) is considering taking the Western Cape Permit Regulatory Entity and City of Cape Town to court to call for a pause on impoundments until the permitting system is reformed.

A court ruled in favor of e-hailing drivers in a similar case in Pretoria. There, drivers proved it was “impossible” to obtain a permit due to City backlogs.

The association also calls on the regulatory entity to stop taking applications and application fees before new permits open up.

Quintas clarified: “Legally, the regulatory entity cannot refuse to accept applications even if the upper limit of the City’s supply and demand numbers have been saturated already. Therefore, the operators apply at their own risk.”

The ‘trauma’ of impoundment

Drivers in Cape Town have been feeling the impact of impoundments as the City stalls in approving new operating licences.

The impoundment fees are high. One driver, who wished to remain anonymous for fear of being blocked from driving, said: “The fees were R7,500, R2,500, and R1,000 — totalling R11,000 in one go. The car is financed, and once it was impounded, I couldn’t make the instalment, couldn’t pay for the business insurance, and couldn’t raise money to get the car released. It’s a trauma I can never forget.”

According to the City of Cape Town’s website: “The impoundment fee is for the initial storage, hooking, salvaging and administration costs for the vehicle’s impoundment… The fee increases for first, second and third offences.”

In addition, drivers must pay for any outstanding fines before receiving their vehicle.

Read more: Uber, Bolt drivers’ two-day strike highlights permit challenges, dangerous working conditions

Immediately, drivers feel the impact of impoundment. A driver said: “I was impounded at 8.45am, 15km away from home, with no money on me. I had to walk home through unsafe areas. The police don’t care how you get back — they just take your car… Where is the dignity?”

In the long term, these fees can be devastating. According to the Deputy Secretary-General of the Western Cape E-hailing Association, Yusuf Dahir, a driver who works for 12 hours a day (the maximum allowed for Uber) earns approximately R1,000/day or R7,000/week.

An estimated 80 to 90% of drivers do not own their vehicles. In general, R2,000-R3,000 of their weekly income goes to rent or weekly commission for the vehicle and R2,000 goes to petrol, leaving drivers with about R2,000 to take home at the end of the week. With this reality, the R10,000 impoundment fee is enormous.

Drivers recognise that operating without licences is unlawful. Another driver said, “All we ask is for the City of Cape Town to allow us to apply for e-hailing permits — and approve them. We want to feed our families through honest work.”

But drivers are frustrated at the inability to acquire the necessary legal permits, and increasingly feel that the City is using them as a cash cow to collect impoundment fees. At the same time, Uber, Bolt, and other e-hailing services continue to allow new drivers to join the platforms, further allowing the cycle to continue.

‘Equitable balance’

According to the Mobility Department’s Allie, the number of permits allotted in the quota is determined to “ensure an equitable balance between the demand and supply of metered taxi and e-hailing services”.

While applications may be accepted, the regulatory entity has informed applicants that operating licences may only be issued once approval for additional applications is received.

According to Maxine Bezuidenhout, the spokesperson for the City of Cape Town’s Traffic Services, 42 e-hailing vehicles were impounded in April 2025, and 45 had been impounded by 30 May.

Drivers can request reimbursement for the impoundment fees from Uber, but still have to pay the fee up front. Dahir says it often takes days, if not weeks, for Uber to pay out.

“It is likely they will not reimburse.”

Dahir also shared concerns about how Uber gathers funds for the impoundment fees. Dahir claimed the money did not come out of pocket for Uber. Instead, according to the drivers, Uber deducted additional fees — beyond its commission — from the driver before their cars were impounded, and used that money to reimburse them for the impoundment fees.

For example, according to the drivers, there were additional, “ever-increasing” fees for accepting rides to, and pick-ups from, airports and unexplained additional deductions at the end of trips. In short, they claimed that Uber was not really paying for the impoundment fees, but rather taking it from the driver in advance through these fees.

Uber ‘aware of challenges’

When asked directly about how the reimbursement process worked, an Uber South Africa spokesperson said in a statement: “Uber would like to refute the claims made by the drivers. We unequivocally maintain that these claims are unfounded.”

In addition, the spokesperson said: “Uber is aware of the challenges drivers are facing in Cape Town and remains committed to supporting them while engaging relevant stakeholders. Our goal is to ensure a sustainable and inclusive approach to mobility that supports both economic opportunity and safe, reliable transport options in Cape Town.”

In response to an inquiry from Daily Maverick that Uber seems to be supporting drivers operating without licences by offering to pay their impoundment fees, Quintas responded: “Paying someone else’s fine or impoundment fee is not necessarily the illegal act.”

Further, Quintas appeared to defend Uber and Bolt’s practice of onboarding and recruiting new drivers without the possibility of permits being granted.

He said: “E-hailing platform providers have over the years marketed their services to operators and drivers without making an operating licence a compulsory requirement to operate on their platforms. Thus, they onboard operators/drivers and allow them to operate without having a valid operating licence… It seems to be a universal practice by all e-hailing platforms to onboard operators without operating licences.”

Uber did not respond directly to Daily Maverick’s question on the matter. DM

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South Africa

The ‘trauma’ of impoundment

‘Equitable balance’

Uber ‘aware of challenges’