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.
Plans announced by Boris Johnson would see the capital’s drivers encouraged by signs and volunteers to turn off their engines in traffic jams
London drivers will be encouraged by volunteers and signs to turn off their engines in traffic jams to tackle the capital’s illegal air pollution levels, under plans announced by Boris Johnson on Thursday.
But campaigners accused the mayor of failing to take hard measures to cut the city’s pollution problem, which has seen six sites including Oxford Street, Knightsbridge and Brixton Road already breach annual limits just weeks into 2016.
Johnson’s Ultra Low Emissions Zone (ULEZ) for cutting pollution does not come into effect until 2020 and only covers central London. The schemes unveiled today are those that have won £5m from an air quality fund.
Nearly £200,000 will be spent on new electronic signs and measuring equipment at Tower Bridge to ask drivers not to leave their engines idling when the bridge opens, causing congestion for the 31,000 cars that cross it daily. But there will be no enforcement or incentive for doing so.
Another scheme will see “friendly, trained volunteers” sent out on to the streets of eight boroughs including the City of London on high pollution days, to talk to drivers about turning their engines off.