Experts urge South African taxi industry to diversify due to rising competition from ride-hailing services

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.'

The South African government is considering using the Taxi Recapitalization Grant to support operators in transitioning to electric transport. Transport Minister Barbara Crisi told Newzroom Afrika that her department is studying ways to apply this grant to assist the taxi industry in moving to electric vehicles.

She noted that there is a concern: while those who can afford electric vehicles will be able to make the transition, many public transport operators may fall behind due to the high cost of such vehicles.

Rising fuel prices are putting pressure on taxi operators

The minibus taxi sector is one of the main forms of public transport in South Africa, transporting millions of passengers daily. However, rising fuel prices have created significant pressure on taxi operators, some of whom are forced to pass on increased costs to passengers through fare hikes.

In April 2026, a sharp increase in the prices of gasoline and diesel fuel prompted calls for taxi fare increases, further increasing the financial burden on citizens who are already facing cost of living challenges. The high cost of fuel has also led to electric vehicles being discussed as a potential way to reduce operating costs for taxi drivers.

What is the Taxi Recapitalization Grant?

The Taxi Recapitalization program was first approved by the Cabinet in September 1999 and launched in October 2006. The goal of the program was to replace old and unsafe minibuses with newer vehicles that meet safety standards. Initially, R7.7 billion was allocated to this program over seven years.

Under this program, taxi operators received compensation for scrapping old vehicles when they were handed over for disposal. According to the Department of Transport, a total of 72,653 taxis were scrapped by September 2018, and operators were paid R4.4 billion in scrapping compensation.

A senior executive announced on Tuesday that Amazon's electric vehicle (EV) fleet in India is projected to exceed 20,000 units within the next year, up from the current more than 15,000. As part of this expansion, the company is working to develop electric freight transport and charging infrastructure.

The e-commerce giant is collaborating with vehicle manufacturers and financial partners to make electric vehicles economically viable for its delivery service. Furthermore, the company is improving the utilization efficiency of its existing vehicles by enhancing route planning.

Abhinav Singh, Vice President of Operations for APAC, Middle East, Africa, and Turkey at Amazon, stated in an interview with Business Standard that the current fleet comprises 15,000 electric vehicles and expects it to be significantly above 20,000 by next year. He emphasized that this is a projection, not an official target. Previously, Amazon had achieved its initial goal of 10,000 electric vehicles by 2024, ahead of the 2025 deadline.

Singh made these statements against the backdrop of Amazon's announcement on Tuesday regarding its intention to deploy 3,000 electric trucks in partnership with Tata Motors over three years. In this arrangement, the vehicles will be owned and operated by Amazon's partners (third-party companies), while Amazon will provide the freight demand and interact with manufacturers and financial companies to support this deployment.

According to Singh, although the initial cost of electric vehicles is 20–25 percent higher than traditional diesel vehicles, their daily operating costs are 10–15 percent lower. He noted that the economic efficiency improves when trucks carry cargo over longer distances instead of making empty runs or idling.

Amazon aims to optimize transport usage by consolidating multiple deliveries and routes. The company has already installed 10 charging stations across India, including locations near major logistics hubs in Delhi, Hyderabad, Bangalore, Chennai, and Jaipur. According to Singh, each such station can simultaneously charge 35 trucks.

Charging time ranges from 45 minutes to 1.5 hours, depending on the battery size and the vehicle itself. Amazon plans to scale up infrastructure according to freight demand rather than following a fixed target for the number of charging stations. Singh explained that the approach to increasing charging capacity depends on where 'mathematical correctness can be achieved,' assessing whether there is enough freight and return cargo demand on routes to make electric trucks viable.

The company is also developing electric trucks specifically designed for e-commerce goods in collaboration with Tata Motors. Singh noted that e-commerce shipments often have large volumes but relatively small weights, making the available space inside the container important. The companies are working on vehicle configurations, battery sizes, and ranges suitable for various transport tasks.

Additionally, Amazon and Tata Motors are creating a larger 32-foot truck variant that includes a dedicated sleeping area for a second driver, separated from the cabin. Singh reported that they are 'inventing a completely different cabin together' to ensure driver safety and provide necessary rest. Amazon is also collaborating with Tata Motors on dual-axle configurations for operations requiring the transport of heavier loads.

Singh specified that Amazon invested approximately 2,800 crore rupees this year in network and operations expansion, in addition to over 2,000 crore rupees in the previous year. Total investments over two years amount to nearly 5,000 crore rupees, and he clarified that this figure includes operational activities of the fleet, not just costs for electric vehicles or charging infrastructure.

Amazon also utilizes railways and biofuels to reduce transportation emissions. According to Singh, rail transport generates about one-third of the carbon emissions per ton compared to road transport. The company began working with Indian Railways in 2019 and now uses over 160 trains or routes, although it declined to disclose the volume of goods transported by rail.