by Linda Smith

Taxi Ride

Inside the taxi industry

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I’m sure you will agree that those two words don’t have too much trouble conjuring up a cauldron of nightmares for most of South Africa: strikes, protests, gang wars, shootings – the list is endless. The ROAD AHEAD team was lucky enough to snatch time with Mr Thulani Qwabe, CEO of Taxi Choice for a deeper insight into the taxi industry.
Thulani explained that one of the challenges and opportunities of 2017 is the “cashless system”, which he is particularly excited about as it leads to seeing problems as actually being opportunities.

One of the opportunities is the huge value chain represented by the taxi industry – a large consumer of various products and services, ranging from purchasing of vehicles, tyres and fuel right through to the financing and insurance arenas.

As you will agree, this is a large engine which is believed to be a huge opportunity for the taxi industry to take on, an opportunity to change the status quo in terms of how the industry relates to the value chain. They need to become owners of the value chain and not participants.

While chatting about this chain, we asked how much the taxi industry is worth. Thulani revealed that fares generate R120 billion, R7 billion in terms of the value of vehicles purchased per annum, R600 billion in terms of vehicle finance and R2.4 billion in terms of short term insurance. In addition to this an average of R39 billion is spent on fuel every year. And there are other items to take into consideration including spare parts, trackers, tyres, etc.

We then tackled the topic of integrating taxis into the mainstream private transport system and what the main keys are to facilitating that. Thulani revealed that government has come up with ideas around the problem and how it can be done. It is believed that the solutions that are being explored, and even implemented in some instances, may not be 100% fit for the South African context.

These solutions may have worked and continue to work in other countries, but in South Africa, the taxi industry is so dynamic and the whole commuter stage so vast that you cannot come up with a single solution that is going to be “one size fits all” solution across the country. Careful consideration needs to be given to the various theories before they are implemented.

There is obviously some kind of relationship with the manufacturers, and we probed further. We learned that apart from Toyota, discussions are underway with Nissan and other Chinese brands. Meetings have been scheduled with other existing OEM’s as well, and the outcome will be dictated by what comes out of the above-mentioned negotiations.

This led to the question that is burning in everyone’s mind: Will there be more regulations and will there be more stringent roadworthy tests on the vehicles? Thulani didn’t hesitate in confirming that the image of the taxi industry has to improve. To improve the quality of vehicles it is very important that taxis become the transport mode of choice for South Africans, as it is believed that taxis are quick, dynamic and affordable.

He further confided that government is currently looking at constructing a model and how they can enhance a certain model in order to scrap more vehicles until we are rid of all the old vehicles and have replaced them with newer vehicles, which are safer and more comfortable for commuters.

Thulani further shared that he hopes to see the above taking place within the next nine to 18 months. Thulani believes that there will soon be a time when drivers are salaried employees thereby reducing the need to speed around to make as much money as possible, per day.

The electronic payment and collection system will allow employment formalisation for the driver as every taxi bearing this system will enable full monitoring—tracking units whereby you can track the drivers, check their acceleration, how corners are handled, all of which will improve driver behaviour.

You will now be able to track how much money the driver makes from the system and thereby formalise employment, giving him/her a proper employment contract, pay more, offer insurance and unemployment benefits, and provide medical aid and pension plans. We learnt that when buying a vehicle it is already checked, which ensures comfort and safety of the commuter due to government specifications.

This makes the decision making process easier when purchasing a taxi: “can I afford the taxi; does the taxi have the lifespan that I need in order to pay it off, etc, thereby ensuring the purchase of a high performance vehicle. Tackling the strike and protest problem, Thulani firmly believes that it would require a collective effort from all the stakeholders—the taxi industry itself, the taxi leadership and the corporates in Africa that are linked to the taxi industry offering products and services. Government, as well as all those stakeholders, needs to take the taxi industry more seriously.

There is a need to sit down and look at solutions and to do it sincerely. Otherwise, the taxi industry is trivialised and undermined when taking strike action. If taken seriously and treated with respect and the dignity it deserves, strike action should not take place going forward. When quizzed about the taxi industry in 10 years’ time, Thulani reckons that taxis will run on gas, while electric taxis are definitely a possibility, and there will be fewer diesel-powered vehicles. There will be Wi-Fi with charging ports available. Drivers will be more professional and you will be paying by card and not with cash. Mobile phones will be used to either criticize or compliment a driver and there will be solar panels, which will enable phone charging. The taxi itself will be bought with a more affordable, cheaper finance package, the driver will be making more money and the owners will be happy to offer a much better service.

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