banner

zebra-cabs-or-tambo-may-2016-555x305
1012 Views

SA Taxi secures R300m in funding to take on Uber


SA Taxi has secured R300-million in funding from Futuregrowth Asset Management, which it will use to provide financing to the company’s Zebra Cabs owner-driver scheme.

SA Taxi is South Africa’s largest financier of minibus taxis. It acquired Zebra Cabs metered taxis in 2015, motivated by the need to expand its business activities into adjacent markets.

The aim of SA Taxi’s newest venture is to revive the country’s floundering metered taxi cab industry, says SA Taxi capital markets director Mark Herskovits.

“In South Africa, the industry is characterised by an old, poorly maintained fleet of vehicles and a lack of trust and transparency in pricing.

“We feel that there is an opportunity to revolutionise the industry and also offer a suitable alternative to Uber, which is doing a great job at disrupting this sector.”

The new venture will see SA Taxi, in conjunction with Futuregrowth, offer owner-driver entrepreneurs who do not want to operate minibus taxis and who may not have a credit record that provides access to vehicle financing, the means to purchase a metered taxi, along with additional support in running their small business.

“As a long-standing investor in SA Taxi, on behalf of our clients, we have witnessed how the company has become a pioneer of innovation in an industry that poses many challenges,” says Futuregrowth investment analyst Gershwin Long.

“Add to this the established relationships held with industry regulators, and the company’s credit vetting and rating processes, and we have every confidence in the business, the business model and the management team. This leaves us with no doubt that the company will be able to revolutionise the metered taxi industry in the same manner, thereby offering a sound investment opportunity.”

Long says much of this revolution is already evident in the manner in which SA Taxi has overhauled and modernised Zebra Cabs’ operations.

“Our research shows that the average age of the metered taxi fleet in South Africa is five years, which impacts the profitability of metered taxi operators. However, SA Taxi has upgraded the Zebra Cabs fleet with just under 300 ToyotaCorollas, all equipped with GPS, Bluetooth, leather seats and external cameras.”

In addition to this, customers now also have a choice of mechanisms to book a taxi, either through the traditional call centre or hailing options, or via an app or Web portal. Various payment methods are also available, including cash, cards or mobile e-wallet transactions.

The company has also partnered with corporates in Johannesburg to meet their transport needs on a contract basis, securing a presence in a market within which Uber cannot compete.

According to Long, all of these elements help Zebra Cabs owner-drivers to be more efficient and profitable, which makes it more likely that SA Taxi will recoup loans and make a profit.

This initial funding is earmarked for expansion over a two-year period, with a primary focus on operations in Johannesburg.

“We will consider seeking additional funding sooner if required, but we first want to build scale in the key area of Johannesburg to achieve critical mass, before expanding operations to Cape Town and Durban. Our long-term goal is to have 3 000 Zebra Cabs on the road by 2020,” notes Herskovits.

Source: engineeringnews

Recently Published

401748
»

#CSIMonth: Why having an authentic approach to your CSI initiatives is key to sustainable growth

It’s a bad idea, as part of your CSR strategy, to pose with a ...

Screen Shot 2017-07-17 at 3.01.47 PM
»

Biodegradable plastic bags developed in SA

South Africans will soon be able to dispose of their plastic bags ...

coke
»

If you care so much, Coke, why aren’t your bottles 100% recycled?

Coca-Cola sells more than 100bn single-use plastic bottles a year. ...

Pam
»

Pam Golding’s new alliance will provide global property assets, plus dual residence

Estate agent Pam Golding Properties (PGP) has partnered with global ...

goin green4
»

Carpooling proves ‘excellent’ match for Cape Town’s traffic congestion

South African carpooling app, uGoMyWay today released the results of ...

roof infrastructure
»

Engineers find way to evaluate green roofs

Green infrastructure is an attractive concept, but there is concern ...

goin green
»

An invitation to attend the 5th Going Green Conference in Durban, 13th to the 15th September 2017

It is with great pleasure and honour to extend a warm invitation for ...

Screen Shot 2017-07-04 at 3.23.15 PM
»

Green protest against Wakkerstroom mine

The centre said the organisations would, if necessary, take the ...

Screen Shot 2017-07-04 at 2.46.32 PM
»

Mall of Africa named winning retail development at Sapoa Excellence Awards

Mall of Africa scoops an award at the South African Property Owners ...