SA Taxi, the specialist asset-backed lender and short-term comprehensive insurer, currently focusing predominantly on servicing independent small-to-medium enterprises (SMEs) mainly in the fixed route minibus taxi industry, is set to expand into the metered or point-to-point taxi industry.
The business is focused on building a metered taxi business of scale, with the intention of transforming, recapitalising and formalising the existing metered taxi industry, estimated to comprise a national fleet of 17 000 vehicles.
“The metered taxi industry has not changed the way it operates for decades, and has been weakened by the lack of a national brand with standardised vehicles, pricing levels and service levels. For these reasons, the industry is in desperate need of transformation, consolidation, recapitalisation and further formalisation,” says David Hurwitz, Transaction Capital Group CEO commenting on the launch of Zebra Cabs.
SA Taxi has purchased three small metered taxi businesses in the last four months. Since then, this fleet of approximately 100 vehicles has been upgraded to Toyota Corollas and rebranded as Zebra Cabs.
Minibus taxi business model
SA Taxi is applying its existing technology, data and skills gained in the minibus taxi industry towards the metered industry. Leveraging off SA Taxi’s vertically integrated and successful minibus taxi business model, Zebra Cabs will procure customised luxury vehicles via their long-standing relationships with vehicle manufacturers, and thereafter sell these vehicles via its direct dealership. All vehicles are customised with leather seats and road-mapping systems, and meet the safety and luxury standards that are now the norm in the global metered taxi industry.
SA Taxi will provide the funding, insurance, telematics data, vehicle servicing capability, multiple booking systems and payments channels required; thereby giving owner-driver entrepreneurs the means to purchase a metered taxi business, and enhance their chances of sustaining their small-business.
A newly developed Zebra Cabs technology platform is available to owner-drivers, comprising a booking app, a niche combined sales channel and multiple payment methods, including card, online, and mobile payments.
The Zebra Cab business model remains agnostic to the booking method or sales channel, and allows for multiple lead generators including the Uber app, corporate sales, web based sales and centralised call centre and dispatch. These advanced facilities enable owner-drivers to expand their reach into the local market, therefore increasing their earnings potential.
The national minibus taxi fleet of approximately 200 000 privately owned vehicles is responsible for more than 15 million commuter trips daily, comprising 69% of all South African household commuter trips. By comparison, South Africa’s bus and rail network is jointly responsible for a total of only 11 million commuter trips per day.
SA Taxi estimates that only 70 000 to 80 000 of these minibus taxi vehicles are subject to finance.
As at 31 March 2016, SA Taxi’s ZAR6 688 million loans and advances portfolio comprises 25 591 vehicles, and thus accounts for one in every three of the financed national minibus taxi fleet.
SA Taxi anticipates selling, financing and insuring an estimated 2 000 vehicles per year directly via its newly launched dedicated minibus taxi vehicle dealership. This dealership is considered to be one of the largest dedicated minibus taxi dealerships in the country selling new and pre-owned Toyota, Nissan and Mercedes minibuses, Toyota bakkies and bespoke Toyota Corolla metered taxi vehicles.
After a capital investment of ZAR25 million, SA Taxi’s auto body repair facility commenced operations at the beginning of February 2016.
SA Taxi’s combined auto body repair and mechanical refurbishment facility now spans more than 20 000 square meters.