SA Taxi, a vertically integrated minibus taxi platform, has revealed that KwaZulu-Natal and the Western Cape are on on the radar for future expansion to provide complimentary business services to the minibus taxi industry.
This move is part of the company’s strategy to extend products and services to new verticals, unlocking value in the industry.
“We are planning next year to set up the same operation you see here [a mechanical workshop, an auto parts centre, a panel shop, a dealership, and finance and insurance operations] in KwaZulu-Natal and the Western Cape, Moroba Maduma, an executive at SA Taxi, told TechFinancials during the tour of their operations.
SA Taxi, which is owned by JSE-listed Transaction Capital, is vertically integrated into the minibus taxi industry. The South African National Taxi Council (SANTACO), which is a national body which represents the interests of its members who are individual minibus taxi operators, has teamed up with SA Taxi. It owns 25% of SA Taxi.
As of March 2019, SA Taxi had 30,617 taxis on its books, with loans and advances close to R10.1 billion. Since 2008, SA Taxi has provided loans of more than R21.9 billion to taxi operators, supporting the creation of 76 000 SMEs, and more than 130 000 direct and 215 000 indirect jobs, explains Transaction Capital.
As a provider of asset-backed developmental credit, SA Taxi is position in a financing market that is growing in a stable defensive industry where it can be selective on credit risk, and the fianced asset retains its value.
In 2015, SA Taxi created its direct dealership, SA Taxi Direct, which sells both new and pre-owned premium minibus taxis. In October 2018, Taximart Direct opened a second dealership in Polokwane.
Taximart is a subsidiary of SA Taxi, which was established in 2009 for insurance claims repairs and the refurbishment of repossessed minibus taxis in the secondary market to improve SA Taxis recoveries. SA Taxi Mechanical established in Midrand in 2013. It refurbishes over 200 cars a month, often rebuilding all mechanical parts of the vehicle. The panel workshop was opened at the beginning of 2016 with state-of-the-art auto body production centre enabling the business to rebuild cars from the chassis up.
Maduma said SA Taxi wants to replicate this set up in KZN and the Western Cape to continue to be a partner to the minibus taxi industry.
“We are creating access to funding for entrepreneurs overlooked by big banks,” he said, adding SA Taxi creates a positive impact on both financial inclusion and the building of the clients’ net wealth.
To mitigate risks, SA Taxi requires for each vehicle; it finances to be fully insured. It has created Taxi Protect, which has R401 million in gross written premium. The company also offers Khusela Credit Life, which includes death payout, permanent disability pau-out, and temporary disability payout.
SA Taxi, which employs 1 151 staff, also created a minibus taxi rewards programme, which is known as Black Elite.
The fuel rewards programme was launched in April 2018 by SA in collaboration with Taxi Choice, the commercial arm of the SANTACO.
With about 14 000 cards distributed and over 6.5 million litres of fuel pumped since its launch in April 2018, the Black Elite fuel programme delivers economic benefits to SA Taxi and its clients.
These programmes and subsidiaries create by us is part of SA Taxi plans to create shared value opportunities, thus ensuring the sustainability of the minibus taxi industry, the company said.