Editorial Comment: Price gouging buses break ranks to cheat

There is always someone who is quite prepared to ruin Christmas for someone else and this year those at the top of the list appear to be the rogue bus crews and the dubious operators who have decided to double long-distance bus fares.

The Government made a determined effort before the festive season to rein in most of the business sectors who might be tempted to shove up prices as Christmas came, and made another set of determined efforts to get bus operators and others in the public transport sector to conform to traffic safety standards.

Generally, the pricing efforts were successful. There is a huge element of competition in the retail sectors, all the way from small and micro businesses to the great supermarket chains, so a price fixing ring is impossible to create. 

Too many people would have to be involved, each willing to cut the throat of the rest to gain a larger market share.

At the importer and manufacturer end, things are a lot different. For some goods there is a virtual monopoly, and in many cases less than half a dozen suppliers. So here there is temptation and it was largely here that the Ministry of Industry and Commerce decided to intervene, holding discussions with the groups representing the formal suppliers and making it clear that their pricing was being watched.

Of course there can be legitimate price rises. There is the steady inflation, there are increases in the prices of raw materials and the like. But the percentages are known, so it is easy to distinguish between suppliers who are honest and keep their mark-ups steady and those who want to indulge in some manipulation and profiteering.

A lot of the work had already been done earlier in the year by the Ministry of Finance, Economic Development and Investment Promotion and the Reserve Bank of Zimbabwe on the other side of Sam Nujoma Street to bring order and stability into the foreign currency markets, and ensuring that imported raw materials would not run short.

So for the past six months exchange rates, both the official ones that pertain to the general imports and the black-market rates that are large used for the diaspora remittances and the import of less essential consumer goods, have been fairly stable. 

There is a bit of creep, and the auction system allows this to be moved promptly to the rates in use.

But basically we have all adjusted to the general stability and small changes each week, so there have been no sudden bouts of price madness. Any such bout, as the Industry and Commerce Ministry noted, would have arisen from greed.

At the same time there have been no shortages, real or artificial, that anyone can use to manipulate pricing and create “corners” in markets so that the holder of the scarce goods can push up prices. 

The Government punctured a couple of potential attempts to create those artificial shortages by allowing free imports of a range of basic goods.

The mess that suddenly developed in the buses over the weekend can be explained in economic terms. First at this time of year there is usually a shortage of public transport as demand reaches record levels for a few days, before slumping to the more normal levels. 

No industry can afford the extra capacity needed for say five days all year, since that would mean a lot of empty seats for the other 360 days.

In addition, as part of the road safety campaign, the police have banned mushikashika from passing through police check points and safety checkpoints, for the good reason that these are responsible for the majority of fatal accidents, at least those involving a fair number of passengers. 

Just before the festive season we had nine people killed in a collision that involved at least one packed mushikashika with a driver who was reported to have been drinking hours.

We would agree that there has been some serious discussion and agreement on a lot of issues of concern between the Ministry of Transport and Infrastructure Development and the Zimbabwe Passenger Transport Organisation, the main grouping of private bus operators, but unfortunately not all of them.

ZPTO, for example, had gone far beyond the bare minimum required to get all buses to have the necessary real-time tracking required to check compliance with speed limits, even helping to set up the necessary equipment so the police could do the checking. 

The organisation had made significant progress in getting members to sign up. 

Some of this was self-interest as well as national interest. Most bus owners do want to know where their buses are 24/7 and are keen to work out if their drivers are obeying orders or not. So it is surprising that ZPTO reported that there were some owners who were dubious.

But this problem of illegal operators and operators who dislike co-operative agreements, plus crews who are prepared to cheat their employers as well as their passengers, has seen the doubling of many fares over the weekend. 

This was precisely the sort of price gouging that the Government was trying to avoid this Christmas.

Unfortunately we cannot force any business to join a business organisation, although most should sign up with the one that represents them best since then they can be part of negotiated deals and contracts and communication. 

But we and the authorities are now aware of what happened, and steps can be taken to make sure there are no repeats at times of high demand. 

One the basis of the co-operative attitudes on so many issues, we believe that ZPTO should be involved in the solution. 

It is necessary to get all to maintain the agreed legal fares, but it is also necessary to make sure that the tickets sold and the money collected match those fares, and that is where it will be hard to find a mechanism.

But this is all part of the process where much has been accomplished in converting that large private transport sector into an orderly, regulated business to the benefit of operators and their staff and, most importantly, the passengers who create the business and pay the fares.

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