A transport specialist warned that minibus taxi operators in South Africa risk missing out on billions of rand in earnings if they do not adapt to the growth of e-hailing services. The market is valued at R26 billion annually, and taxi owners are advised to diversify their operations by using smaller vehicles to compete in the changing passenger transport sector.
This issue was raised during the Frank Dialogue on the state of the South African transport industry, held in uMhlangi. At the event, representatives from the taxi industry, transport experts, and the Passenger Rail Agency of South Africa (Prasa) discussed how the sector can respond to increasing competition and evolving passenger demands.
Wuyi Madjola, Head of Integrated Public Transport Systems at CityCon Africa, advised taxi owners to consider investing in smaller vehicles that could operate on e-hailing platforms alongside their minibus services. Madjola calculated that the e-hailing market in South Africa is worth approximately R26 billion per year, comprises about 70,000 vehicles, and shows a compound annual growth rate of 17%.
According to her, minibus and e-hailing services do not always compete for the same passengers. While taxis typically run on fixed routes, e-hailing provides a 'door-to-door' service and connects with stations and taxi ranks. Madjola confidently stated that the taxi industry is capable of participating in e-hailing and questioned why taxi owners are not investing in more compact vehicles instead of relying solely on minibuses.
She noted that operators could earn income from both services, adding that the loss of potential e-hailing revenue has caused dissatisfaction among taxi owners who feel their passengers are being taken away by competitors.
Madjola also criticized operators for their inability to pool financial resources to strengthen their position when approaching creditors. A hypothetical calculation she presented showed that 10 million taxi rides at R15 each could generate R150 million per day, or R750 million over five days. Despite this potential aggregate turnover, financial institutions continue to view taxi operators as high-risk borrowers.
She stated: 'The government let down the taxi industry, but the taxi industry let itself down.' These remarks came amid growing pressure on the sector to modernize operations and improve financial systems. Previously, Santaco pointed out how digital payments could improve access to transport and business financing.
Madjola also raised the question of whether the expansion of Prasa's intercity bus services might draw passengers away from taxi drivers, citing the Durban-Johannesburg route. Prasa CEO, Hisham Emeran, rejected the notion that the agency is taking passengers from taxis. He stated: 'Prasa is not stealing passengers. We have been running between cities for decades.'
Emeran explained that Prasa is modernizing its intercity bus transport, including Translux and City to City. On October 15, the agency introduced 17 new City-to-City buses in Pretoria as part of its fleet renewal program. Emeran emphasized that these are long-distance services, not daily commuting services, and are not intended to compete with taxis. He also mentioned that Prasa and the National Taxi Council of South Africa (Santaco) are discussing ways to integrate public transport, asserting that taxis, buses, and trains should work together to serve passengers.
Matula Mhize, Regional Chairperson of Santaco for Durban-West and Chairperson of the Ethekwini Metro Taxi Council, acknowledged the need for changes from operators but noted that progress was slowed by the Covid-19 pandemic and devastating floods in KwaZulu-Natal. He stated: 'We are trying to catch up on transformation.'
Mhize explained that job losses reduced the number of passengers who could afford taxi rides, and damaged infrastructure made some routes inaccessible. Furthermore, the government had to redirect resources to recovery rather than industry development. He noted that engagement with the government has improved, referencing plans for integrated transport services and the postponed Durban public transport program. Nevertheless, he stressed that the industry needs support to turn these plans into a viable business.
Mhize argued that the taxi sector has not received the same formal transformation support as other industries, although he welcomed broader consultation with the government. He also admitted that violence and taxi route disputes have delayed progress, noting that route conflicts are a long-standing problem for the industry and passengers.
Mhize called for a change in the approach to managing family taxi businesses, especially to protect women who inherit operations from their husbands. He stated: 'We are transforming into companies,' clarifying that wives and children should have greater access to business documentation and participate in management. He also mentioned that the Santaco women's department handles complaints regarding violence and abuse.
Mhize added that changes in ministers, officials, and taxi leadership can disrupt negotiations, as each new appointment sometimes requires restarting discussions.
Madjola cited taxi associations in Alexandria and Centurion where operators found opportunities within broader transport networks. In Alexandria, she said, the taxi consortium provided shuttle services, connecting passengers with other modes of public transport. She suggested that similar agreements could open new business opportunities for other taxi associations.
Mhize concluded that the industry must analyze its own shortcomings, as well as delays from the government, and prepare to seize new opportunities before demanding further assistance. He emphasized: 'We know our weaknesses and our mistakes.'
