How much it costs to own and run a taxi in South Africa

SA Taxi owner, Transaction Capital, has published its financial results for the year ending 30 September, outlining the costs of operating a taxi in South Africa.

The group’s data show that minibus taxis have continued to grow in popularity over the last eight years and are now the preferred form of transport in South Africa due to accessibility and flexibility.

It estimates that around 15 million commuter trips are taken daily in a taxi across South Africa, with increased dissatisfaction around bus stop facilities and rail’s dwindling operating capacity.

Despite this growth, the data shows that it has become increasingly expensive to own a taxi in the country.

The group said that the recommended retail price of a Toyota HiAce diesel vehicle is now R510,417, compared to R493,900 in 2020. This figure is up 36% compared to the price of a taxi in 2015 (R360,000).

SA Taxi provided a breakdown of a typical new credit agreement as follows:

Item Amount
Recommended retail price of a Toyota diesel taxi R510 417
Interest charged 19.5%
Term in months 71
Origination fee R2 990
Finance instalment R12 461
Insurance instalment (comprehensive, credit life and others) R2 979
Administration fee R69
Telematics fee R294
Total monthly instalment R15 631

Transaction Capital noted that the taxi industry in South Africa remains a challenging environment due to industry disruptions, Covid-19 restrictions, civil unrest and minibus taxi conflict in parts of South Africa.

The group said it had adopted more conservative strategies in response to these issues, resulting in lower approval rates. This includes introducing stricter credit granting criteria and targeting experienced minibus taxi operators over new entrants, it said.

Despite these issues, the group noted that the demand for minibus taxis is now exceeding pre-Covid-19 levels.

Other key data on taxi drivers and operators includes:

  • The average number of vehicles that an operator owns is 1.3;
  • The average age of a customer is 49;
  • The average age of a vehicle is 4.4 years;
  • Toyota makes 90% of all the vehicles.

While TransAction Capital no longer provides estimates on how much taxi drivers earn in South Africa, the group has flagged several issues likely to impact the profitability of operators in the coming months – including another petrol price hike in December.

It also published a chart showing how the profitability of taxis have changed over the last 18 months as the country moved between lockdown levels.

“At 30 September 2021, the 12-month average for petrol and diesel prices were, respectively, 8% and 3% higher than a year ago,” the group said.

“The fuel price hike in November 2021, however, resulted in the highest fuel price in recent years. With passenger loads per trip down due to the impact of Covid-19, the industry’s profitability will remain under strain. Due to the profitability impact of the above environmental factors, the industry may need to increase fares in the coming months.”

Read: South Africa’s controversial driving rules have hit a major roadblock: AA

Must Read

Partner Content

Show comments

Trending Now

Follow Us

How much it costs to own and run a taxi in South Africa