SA Taxi is South Africa’s largest financier of minibus taxis. It acquired Zebra Cabs’ metered taxis in 2015, motivated by the need to expand its business activities into adjacent markets.

The aim of SA Taxi’s newest venture is to revive the country’s floundering metered taxi cab industry, says SA Taxi capital markets director Mark Herskovits.

“In South Africa, the industry is characterised by an old, poorly maintained fleet of vehicles and a lack of trust and transparency in pricing.

“We feel that there is an opportunity to revolutionise the industry and also offer a suitable alternative to Uber, which is doing a great job at disrupting this sector.” 

 

The new venture will see SA Taxi, in conjunction with Futuregrowth, offer owner-driver entrepreneurs who do not want to operate minibus taxis, and who may not have a credit record that provides access to vehicle financing, the means to buy a metered taxi, along with additional support in running their small business. 

 

“As a long-standing investor in SA Taxi on behalf of our clients, we have witnessed how the company has become a pioneer of innovation in an industry that poses many challenges,” says Futuregrowth investment analyst Gershwin Long.

“Add to this the established relationships held with industry regulators, and the company’s credit vetting and rating processes, and we have every confidence in the business, the business model and the management team. This leaves us with no doubt that the company will be able to revolutionise the metered taxi industry in the same manner, thereby offering a sound investment opportunity.” 

 

Long says much of this revolution is already evident in the manner in which SA Taxi has overhauled and modernised Zebra Cabs’ operations.

“Our research shows that the average age of the metered taxi fleet in South Africa is five years, which impacts on the profitability of metered taxi operators. However, SA Taxi has upgraded the Zebra Cabs fleet with just under 300 Toyota Corollas, all equipped with GPS, Bluetooth, leather seats and external cameras.” 

 

In addition to this, customers now also have a choice of mechanisms to book a taxi, either through the traditional call centre or hailing options, or by means of an app or Web portal. Various payment methods are also available, including cash, cards or mobile ewallet transactions.

The company has also partnered with corporates in Johannesburg to meet their transport needs on a contract basis, securing a presence in a market within which Uber cannot compete. 

 

According to Long, all these elements help Zebra Cabs owner-drivers to be more efficient and profitable, which makes it more likely that SA Taxi will recoup loans and make a profit. 

 

This initial funding is earmarked for expansion over a two-year period, with a primary focus on operations in Johannesburg.

“We will consider seeking additional funding sooner, if required, but we first want to build scale in the key area of Johannesburg to achieve critical mass, before expanding operations to Cape Town and Durban. Our long-term goal is to have 3 000 Zebra Cabs on the road by 2020,” says Herskovits. 

Source : http://www.engineeringnews.co.za/