The taxi industry, like many other sectors, has faced significant challenges in the aftermath of COVID-19. The pandemic not only impacted the health and well-being of individuals but also brought about widespread economic disruptions that have left a lasting mark on communities, businesses and organisations globally.
In South Africa, the taxi industry, heavily reliant on financial institutions, was not immune to these effects. The financial strain caused by the pandemic exacerbated existing vulnerabilities within the industry, leading to several challenges that continue to resonate today. The impact of the pandemic has hugely impacted finance houses, many of which found themselves overwhelmed by the rising tide of debt.
A large number of taxi owners, unable to meet their financial
obligations, faced the harsh reality of repossession during and post Covid-19. This was particularly true for those financed by entities like SATF (South African Taxi Finance) and Bridge Finance, which were notorious for their aggressive business models.
These models, which included high interest refinancing and a focus on repossession with immediate re-sale of the minibuses just a day after being repossessed, placed an unbearable burden on taxi owners, further destabilizing an already fragile industry.
The Current Landscape (2024)
Fast forward to 2024, the taxi industry is grappling with a new set of challenges. Finance houses, once the lifeblood of the industry, have grown increasingly conservative in their approach to financing taxi operations.
This shift is driven by a range of industry own issues, including hijacking syndicates, which significantly increase the risk profile of the industry, as well as fraudulent documents, which undermined the integrity of the financing process.
Another major shift involves the administrative collapse of TaxiChoice, which has placed immense stress on the retail market, affecting taxi sales and the broader value chain.
Parks Moraladi, Toyota South Africa’s Senior Manager: Government Tender, expressed his concern about the state of the taxi economy. Moraladi says Toyota experienced a sharp decline of taxis sold from a record high of pre Covid-19 sales to the current low sales of vehicles sold to the industry for quarter of 2024.
Toyota dealers are not alone in this misery as CFAO Mobility also reported a steep decline in taxi sales of taxis sold to taxi operators in the same period, according to Solly Msiza, CFAO Group Executive Corporate.
Future Outlook
Looking ahead, it is clear that the future of the taxi industry hinges on the willingness of banks, OEMs like Toyota South Africa Motors (TSAM), and other stakeholders to collaborate and implement measures that can revive the sector.
This includes addressing the root causes of the challenges, such as enhancing security measures to combat hijackings, improving administrative efficiency within TaxiChoice, and rebuilding trust through transparent and fair financing practices.
