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Time to dismantle ACSA monopoly

30 August 2007

ACSA disembarkation waitBongani Maseko's defence of the ACSA monopoly's hike in fees in light of the need for future expansion showcases the lack of ideas in the organisation. ACSA's hiking of their tarrifs to finance future expansion is the typical modus operandi of an inefficient overcharging couldn't-care-less monopoly. Imagine if the owner of a minibus taxi decided he wanted to buy a second minibus - financing the second minibus by increasing taxi fares would be a quick way out of business in South Africa's competitive minibus taxi industry. Of course if you're a monopoly owner of all minibus taxis in South Africa, it's a different story - you can increase taxi fares and tell your passengers to suck it up (like ACSA is doing).

Like most monopolies ACSA talks a lot about "customer-focused service" - but its actions demonstrate its contempt for its customers. One needs to look no further than the airline industry to see the benefits of introducing competition into the market - not everybody may like low-cost carriers like Kulula & 1Time, but they have given people the option and together with price comparison sites like SouthAfrica.TO have driven airline fees down dramatically. Competition has transformed the airline industry, yet a regulated monopoly continues to deliver abject service, endless waits for baggage, high levels of theft, airport security lapses and frequent waits for the arrival of disembarkation equipment.

SouthAfrica.TO is a staunch advocate of the breaking up of the inefficient high-cost ACSA monopoly.


Article used in economic textbook

The above article is being used as a case study about monopolies in the next South African grade 12 economics textbook.

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