During February 2021, the Provincial Regulatory Entity (“PRE”) issued a statement announcing that the City of Cape Town (the “City”) had imposed a moratorium on new applications for metered operating licences (which includes rank, base and e-hailing services) until 31 December 2023.

The decision was made during 2020 already following consultation with administrative and political principals, and according to the City, was deemed necessary for several reasons. Firstly, current legislation and by-laws do not adequately address e-hailing services. Secondly, the City wanted to review and update its by-laws, policies, statutory plans, and strategies. Thirdly, the City sought to align its by-laws, policies, and strategies with the proposed  amendments to the National Land Transport Act 5 of 2009 as amended (“NLTA”) at that point before Parliament. Fourthly, the City wanted to take inventory of metered taxi/e-hailing operating licences in the system and consider recent survey information to establish the demand for metered taxis. Finally, the City aimed to establish a Metered Taxi Inter-Modal Planning (IPC) Sub-Committee to consolidate all the fragmented metered taxi operators under one umbrella and deal with all metered taxi matters going forward.

However, Andiamo Car Service (Pty) Ltd (“Andiamo”), an applicant for metered taxi service operating licences, with the assistance of its legal team consisting of Cape Town based SchoemanLaw Inc, Adv Mushahida Adhikari and Adv Sheldon Magardie filed an application in the Western Cape High Court under case number: 11044/2022 during June 2022.  It did so in both its own interest and the public interest, contending that the City had exceeded its powers and acted unlawfully and unconstitutionally when it imposed the moratorium in 2021. The City did not file its answering affidavit, but contended that the relief sought was moot as it had lifted the moratorium a few weeks before the matter was heard.

Andiamo sought a declaratory order that the decision of the City to impose the moratorium was inconsistent with the NLTA and invalid, and the review and setting aside of the City's decision to impose the moratorium and the PRE’s decision to adhere to it. Andiamo also sought a direction for the City and PRE to immediately consider, process, and determine new applications for metered taxi operating licences submitted by e-hailing operators.

Judge L Nuku ruled in favour of Andiamo on 28 February 2023 and declared the moratorium imposed by the City on new applications for metered operating licences unlawful and unconstitutional.

The court found that the City had exceeded its powers and acted unlawfully and unconstitutionally when it imposed the moratorium. The City also did not satisfy the jurisdictional requirements of either section 18(1) or section 39 of the NLTA when it imposed the moratorium. Moreover, the Court held that it has a mandatory duty under section 172(1)(a) of the Constitution to declare unlawful conduct to be unlawful and unconstitutional and thus even with the City’s contention the matter was not moot.

The moratorium imposed by the City  has therefore been declared illegal and invalid and the Court has ordered that the PRE must immediately consider, process, and determine new applications for metered taxi operating licences submitted by e-hailing operators.