This is how much money the average taxi operator makes in South Africa

 ·22 Jan 2020

SA Taxi owner, Transaction Capital has published its annual report for 2019, showing how much taxi operators in South Africa earn each month.

According to Transaction Capital, approximately 69% of households use minibus taxis in 2019, up from 53% in 2003. This equates to around 15 million commuter trips daily, handled by over 250,000 vehicles.

In 2019, the group concluded a strategic partnership with the South African National Taxi Council (Santaco), where the council acquired a 25% stake in SA Taxi, for R1.7 billion in 2018.

This partnership was delivering returns that “far exceeded expectations,” Transaction Capital said, with a major boost to the group’s operational and financial performance in the year.

SA Taxi provides developmental finance, insurance and other services to empower minibus taxi owners, thus enhancing the sustainability, reliability and safety of South Africa’s public transport infrastructure.

Although not immune to difficult economic conditions, the minibus taxi industry is supported by population growth and increased urbanisation, which have resulted in higher commuter density, Transaction Capital said.

However, the group noted that there are also a number of issues facing the industry including the rising costs of vehicles and petrol.

Taxis in South Africa

Transaction Capital says that South Africa has 250,000 taxis operating nationally, primarily in Gauteng (30%), and Kwa Zulu-Natal (21%). Each minibus averages 6,000km per month, or 72,000km a year.

According to Transaction Capital’s report, the average price for a Toyota HiAce – most commonly used as minibus taxis in South Africa, making up 88% of all taxis – increased by 4.2% in 2019 to R451,600.

Fuel costs, meanwhile, have climbed 10% (for diesel), over the same period, while taxi fares have averaged only 7% higher in KwaZulu Natal, and 6% in the Eastern Cape (with no fare increases in other provinces).

Despite operating within this constrained environment, taxi operators remain resilient, the group said, taking home profits of more than R25,000 a month.

Over shorter-distance routes (like a 23km trip between Soweto and Johannesburg), operator profits are around R25,000 a month, while longer distance trips (like the 595km trip between Joburg and Durban) can lead to profits of around R37,000 per month, the group said.

The minimum monthly profit recorded by the group was R6,000 a month, as per its credit profiles on loans on book.

The average taxi operator in South Africa has 1.2 vehicles per customer, with a vehicle age of around 3.6 years, Transaction Capital’s data showed.

Read: The company cashing in on South Africa’s minibus taxi industry

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