The ins and outs of starting a taxi business in South Africa

The taxi industry in South Africa has been given a bad reputation over the last few years, but what very few realise is that it’s a very lucrative business opportunity for taxi owners. There will always be commuters; hence there will always be a business opportunities available for taxi operators.

Who to register with

As with any other business, owning a fleet of taxis requires planning. Planning that involves fleet management and acquiring the necessary paperwork to operate in a certain vicinity. After the business plan and funding has been obtained, the taxi owner must register his business with the appropriate South African agencies, including the Companies and Intellectual Property Registration Office (CIPRO), the Department of Labour and the Department of Transport. Thereafter the licensed taxi driver is free to operate and can be hired for business.

What you need to get started

The most important certificate for a taxi operator to have is a route license. The taxi association will upload the driver and vehicle details on a database, which will then in turn show if the route is profitable or not. If there are too many taxi’s on the same route, then the likelihood of the driver making a profit will be reduced.

The routes are also allocated and controlled by local governments, but the taxi association’s task is to be very careful in making sure that there aren’t too many drivers running the same route. They basically make sure that the routes are viable. This will also ensure that no conflict will arise between drivers, even if it may seem like the inevitable –given the stigma of South Africa’s taxi operators.

Start up capital

Commonly used vehicles are Toyota or Nissan taxies. These are called the premium vehicles in the taxi industry because of their reliability. These taxies retail from about R100 000 to about R340 000, but for the overall cost that would include paying your license and taxi association fees, the total cost can amount up to R350 000 to start a taxi business.

Every industry has its flaws, and every business comes with financial gains and financial losses. It’s up to the taxi operator to ensure that his business runs smoothly. Although minibus taxis are a familiar sight on South Africa’s roads, the inner workings of the business are not generally well-known. That is why before venturing bull-headedly into this industry, it’s best to do the necessary research.

Speak to someone in the know

Another great way to find insight into the world of taxi operators is to speak to a driver about the ins and outs of the business. You will be able to get a better feel for it and even learn a few tricks of the trade amongst the rest of the drivers. People are always willing to share if you are willing to ask.