Our operations as at 31 March 2019


Highlights:
  • Ownership transaction between SA Taxi and SANTACO
    > Finalised on 6 February 2019
    >SANTACO acquired 25% stake in SA Taxi for R1.7 billion
    >Further alignment with minibus taxi industry, yielding shared value
    >SA Taxi settled R1 billion of debt, yielding interest savings
    >Potential B-BBEE benefits and equity empowerment
  • Financing operations
    >Expanded total addressable market by including lower risk customers
  • Retail operations
    >Expansion of dealership network
    Polokwane opened in October 2018
    – KZN & Western Cape under consideration
    >Growth in Taxi Auto Parts (TAP) retail offering to wider taxi industry
  • Insurance operations
    >Broadened client base and product offering
    >Mobilised broker network (>100 brokers)
    >Reduced cost of claim (broadening of and efficiencies in SA Taxi’s autobody and mechanical refurbishment facility)
  • Connected services
    >“Black Elite” fuel rewards programme (~14 000 cards)
    >Additional programmes for industry under consideration


Download a PDF that contextualises South Africa’s taxi market and SA Taxi’s impact .


Our portfolio:

25% women owned SMEs on HY19 originations
100% black owned SMEs in SA Taxi’s loan portfolio
Financed clients also insured by SA Taxi >27 000 ▲ 11%
Vehicles financed & insured by SA Taxi >85%1
Average age of vehicle: 3.9 YEARS

1100% of taxis financed by SA Taxi are fully insured, > 85% of SA Taxi’s financed clients independently elect to to be insured by SA Taxi

Societal relevance

SA Taxi operates on the premise of developmental or empowerment financing, filling a critical funding gap by supporting entrepreneurs who would otherwise remain outside the formal economy, thus also contributing to job creation.

Its focus on financing SMEs delivers both a commercial and social benefit through a shared value approach in a critical pillar of South Africa’s public transport sector.

SME empowerment and economic transformation

100% black owned SMEs in SA Taxi's loan portfolio
25% women owned SMEs on HY19 originations
21% under the age of 35 years on HY19 originations
R1.9 billion loans originated creating 4 262 SMEs in HY19
R23.8 billion loans originated creating 76 685 SMEs since 2008

Industry sustainability

4 262 reliable new & pre-owned minibus taxis on the road in HY19

Sustainable job creation

~1.8 direct jobs per taxi vehicle
>138 000 direct jobs created by SA Taxi's fleet since 2008
~600 000 indirect jobs enabled by the minibus taxi industry
>7 000 direct jobs created by SA Taxi's fleet in HY19

Environmental sustainability

9.8% abatement on carbon emissions




The typical minibus taxi is a 16-seater, typically white in colour with the most common model being the Toyota Quantum Sesfikile. Taxis operate an unscheduled service on fixed routes managed by taxi associations.

Taxis will typically depart from fixed terminals but stop anywhere along their route to pick up and drop off passengers. Passengers hail taxis using hand signals to indicate where they are travelling. Taxi ranks are hives of activity and market places establish themselves around the ranks to service the commuters.

Regional taxi councils determine the fares for each route considered to be affordable for the lower income population of the country. Fares are paid in cash and in some areas of the country the taxi owner employs a conductor to manage fares whilst in others, passengers themselves manage the cash by passing it to the driver.

SA Taxi has developed its own innovative developmental credit philosophy and strategy. This approach is built on the proprietary data and industry knowledge amassed over many years. This niche capability evaluates each taxi owner as a small business and not solely on their individual credit score, enabling it to extend credit in this niche, under-served market segment.

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SA Taxi Direct dealership was established in 2015, selling both new and pre-owned premium taxis. Due to strong relationships with Toyota, SA Taxi is allocated approximately 70 new Toyota Sesfikiles per month to sell alongside the pre-owned vehicles.

This channel offers SA Taxi greater returns on the entire vehicle deal and provides a profitable and reliable marketplace for sale of refurbished vehicles due to the following factors:

Margin off sale
SA Taxi is able to realise a considerable margin on the sale as the transaction occurs on their own dealership and the pre-owned vehicles have been through Taximart.
Better credit risk screening
Since SA Taxi has greater control and line of sight of the interaction that occurs at the point of sale, it is able to ask the required questions to achieve a better credit risk screening.
Insurance take up is higher
SA Taxi’s accredited sales agents provide customers with key insights on the value of insuring their vehicle, resulting in a higher insurance take up.

Taximart was established in 2009 to refurbish primarily repossessed minibus taxis in the secondary market and improve SA Taxi’s recoveries.

Taximart services include repair and maintenance which is completed timeously ensuring that owners’ vehicles are back on the road as soon as possible.

The ability to refurbish and resale has enabled SA Taxi to reduce their loss ratios as by recovering a significant percentage of the loan value of repossessed vehicles. This is achieved through reducing costs, improving turnaround times, improving product quality and providing higher returns than auction prices. Taximart has also led to reduced insurance cost of claims.

Efficiencies created through Taximart arise from the following:
  • Economies of scale;
  • Focus on a narrow product line
  • Bulk procurement power; and
  • Time saved by controlling the entire process in-house.
Training is paramount with dedicated Toyota, Nissan and Mercedes training centres having been established, where staff are equipped with the necessary knowledge and knowhow to give effect to our vision of quality and efficiency.

SA Taxi originates its loans and allied services through three key distribution channels: affiliated dealers, non-affiliated dealers and SA Taxi's own retail channel. SA Taxi’s retail dealership achieves higher returns and provides a profitable and reliable marketplace for the sale of new and refurbished pre‐owned vehicles.

  • 500 million vehicle turnover in SA Taxi retail dealership in HY19
  • 8% average retail margin per vehicle

    SA Taxi has reduced its loss ratios through reducing refurbishment costs and improving both turnaround times and product quality. The efficiencies created through SA Taxi’s own facility arise from economies of scale and its focus on specific vehicle types, allowing for specialisation, bulk procurement power and time saved by controlling the entire process in-house.

    >20 000m2 combined auto body repair and mechanical refurbishment centres

    SA Taxi’s ability to refurbish and refinance recovered vehicles enables it to participate in the liquid pre-owned market, ensuring retention of asset value.

  • >75% recovery rates on repossession, refurbishment and resale

All financed vehicles are required to have comprehensive insurance. SA Taxi has designed its highly competitive comprehensive insurance products that are sold through its insurance cell captive entity established in partnership with Guardrisk Insurance Company.

Expanding client base:

  • >85% of SA Taxi’s minibus owners insure with SA Taxi1
    1100% of taxis financed by SA Taxi are fully insured.
  • Gross written premium grew 22% to R401 million for HY19

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