What you need to know about the state of SA’s minibus taxi industry – including how much profit owners make each month

Business Insider SA
Photo: SA Taxi
  • As SA's passenger rail service deteriorates even further, minibus taxi operators saw a strong increase in profitability in 2019.
  • New research by Transaction Capital shows that a long-distance operator on the Durban to Joburg route can make a profit of R37,000 a month.
  • Almost 70% of South African households use taxis are their primary transport.
  • For more stories, go to Business Insiders SA's home page.

While far fewer South Africans travelled by rail and bus last year, the minibus tax industry remained robust – representing 75% of all trips to work, schools and universities in South Africa.

This is according to new data by released in Transaction Capital's annual report for 2019. The JSE-listed company owns SA Taxi, which finances, sells, and insures minibus taxis, with more than 32,000 operators on its books.

Here's what you need to know about the state of the SA minibus tax industry:

Long-distance operators can earn R37,000 in profit a month

According to SA Taxi’s research, the average short-route operator on the 23km route between Soweto and Johannesburg can earn a profit of around R25,000 of a month. This is an increase of R5,000 from the previous year.

The average taxi fare for the route is around R16 a trip, compared to R9.50 for the train and R17.80 for a bus trip.

Source: Transaction Capital

On the route between Johannesburg to Durban (595km), the average profitability is R37,000 a month - an increase of R2,000 from 2018.

The average taxi fare is around R300 a trip, compared to R390 for the train and R240 for a bus (Eldo) trip. A trip on the Greyhound bus will be R395.

Source: Transaction Capital

Taxi fare increases were limited in the past year

After two taxi fare hikes in many regions during 2018 (due to fuel price increases), a number of major routes in Mpumalanga, Gauteng, and the North West saw no fare increases in 2019.

But in KwaZulu-Natal fares increased by 7%, and in the Eastern Cape by 6%, according to Transaction Capital data.

Taxis only represent 2% of SA’s total number of registered vehicles

There are 250,000 minibus taxis currently doing business in South Africa, of which 30% operate in Gauteng and 21% in KwaZulu-Natal.

69% of all South African households use minibus taxis

This is up from only 59% in 2003. Taxis represented 75% of all transport to work, schools and universities in South Africa last year.

Minibus taxis were responsible for 15 million daily computer trips – spanning 18 billion kilometres – last year. This is equivalent to almost 47,000 trips to the moon.

By comparison, buses represented 900,000 trips a day (a decline of 5% from the previous year), followed by trains (600,000), which declined by 23% in a single year.

SA's passenger rail network was repeatedly brought to a standstill in the past year as vandals wreaked havoc. Some have blamed the sabotage on taxi operators, who benefit most from rail disruption – an accusation denied by the Congress of Democratic Taxi Associations (Codeta).

The average age of a minibus taxi owner is 47

If SA Taxi's client base is anything to go by, the average operator owns 1.2 vehicles.

Three people are killed in taxi-related accidents every day.

Some 8% of SA’s road facilities involved taxis in 2017. Of the 38 people who die in accidents per day on South African roads on average, three are killed in taxi related incidents, according to a report by the department of transport.

More than 40% of assassinations in SA are related to the taxi industry

According to research by the University of Cape Town and The Global Initiative against Transnational Organised Crime, 43% of all assassinations in the country are related to the taxi industry. This is almost double those related to politics (22%) and organised crime (22%).

“Such murders are usually connected to disputes over route allocations and power struggles within the lucrative taxi associations,” the report states.

Some 500 taxi operators were assassinated in KwaZulu-Natal alone in the period between 2000 and 2017.

SA's taxi workhorse costs more than R450,000

The price tag on a Toyota Ses’Fikile diesel model is currently R451,600 – and the price has increased by 24% since 2015.

Some 88% of the minibus taxis in SA are Toyota models.

Taxi owners get R124,000 when they trade in their own models

The Department of Transport increased the mini-bus taxi scrapping allowance from R91,100 to R124,000 per vehicle last year.

Government introduced the scheme more than a decade ago, to encourage taxi owners to take older, unsafe vehicles off the road, and replace them with safer vehicles.

By the end of 2018, almost 73,000 taxis had been scrapped and a total amount of R4.4 billion was paid to taxi owners.

The minibus taxi industry only became legal in 1987

Until 1987, transporting passengers without a permit was prohibited in South Africa. More than 90% of applications by black taxi-owners were rejected by the Apartheid government. They were forced to illegally transport passengers, and in the 1980s started using kombis. This was still deemed illegal by the state.

Due to pressure from taxi owners, who organised themselves in associations, government was forced to regulate the industry in 1987, which made made minibus taxis legal for the first time.

Compiled by Helena Wasserman

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