Blog - Journey of Taxi Industry
K Mashifane - Oct 2019
South African taxi industry remains the critical contributor to the socio-economic development of the South African population. Not only is it the most available mode of transport, it is also the most affordable, providing a door-to-door service and flexibility to many commuters.
As a backdrop, the South African taxi industry underwent a significant transformation in the 1990s, following its deregulation in 1987. It was necessary for the industry, together with the government, to transform and implement the changes, as their existence and services impacts the daily lives of the urban poor.
Along with the transformation process, came the introduction of structured routes, permits/operating licences, associations and the formation of South African National Taxi Council (SANTACO) in September 2001. For many, this process went unnoticed and few will understand the massive transformation that occurred.
This is the industry that has, in the past, been categorised as informal, unstable and problematic because of challenging the norm and fighting for its rightful place in the South African economy, through strategic interventions and equity transformation.
In 2013, the National Household Travel Survey reported that 68.8% of South African households use taxi services daily. Only six years later that figure increased to 75%. This is a thriving industry that touches the lives of over 16 million commuters every single day. The industry has approximately 250 000 legal taxis operating on the road.
Today, even though the country is facing economic challenges, the taxi industry continues to grow significantly. It plays a major role in the value chain, contributing immensely as follows:
- R120 billion revenue per annum
- R39 billion on fuel expenses per annum
- R7 billion on new vehicles purchased per annum
- R6.3 billion on new vehicles financed per annum
- R2.4 billion on insurance per annum
Important questions must be asked: is the taxi industry problematic or is our system failing to accommodate the majority of our nation because of a lack of understanding of the industry and the history?
- Are we prepared to play a significant role in this market or are we rigid in our thinking?
- Have we been taking advantage of our people who lack the understanding of the products created for them?
- Is this industry a risky industry? And on whose measure is it classified as risky?