No financing for 600 new taxis a month
SA Taxi, part of financier Transaction Capital, is no longer funding the purchase of 600 new taxis a month, meaning Toyota SA Motors could be selling up to 43% fewer taxis each month.
Incoming Transaction Capital CEO Jonathan Jawno said previously it had funded the purchase of as many as 600 new taxis on average a month and could no longer do so as it moves to selling only 180 to 200 refurbished or used taxis.
Toyota, however, appears unconcerned.
SA Taxi is in severe trouble as taxi owners found they could not afford their loan repayments of more than R6,000 a month as they battled skyrocketing interest rates, a huge increase in the petrol price, small increases in commuter fares and declining passenger volumes. The financier is owed R17bn by taxi owners, with more than two thirds in arrears, and SA Taxi’s long-term survival is uncertain.
It warned last week if it could not restructure its debt, which it is unable to repay, it would not be able to access new funds to keep financing taxis from April and would have to wind down.
To remain sustainable, it is now only funding used taxis and has cut financing from more than 800 taxis a month to 200.
It will now only support vehicles that have more affordable monthly repayments.
Toyota, which produces nearly all minibus taxis in SA, sells on average 1,375 a month or 16,500 minibus taxis a year. This means SA Taxi was funding about 40% of all their minibus sales before it hit hard times.
It is not clear whether banks will step into the gap and finance the purchase of new taxis as SA Taxi was specifically supporting the very clients that banks would not fund. It also funded emerging taxi drivers who drive less profitable routes.
“Perhaps a key question is whether the banks can now fill the void of financing new taxis to help support the industry,” SA Taxi CEO Sean Doherty said.
General secretary of the Santaco taxi association Daki Qumbu said the government needed to subsidise the industry as it was the only public transport sector that did not get support. “It’s difficult for taxi operators to buy new taxis due to the economy ... operators are under immense pressure to keep their businesses afloat.”
The SA minibus taxi industry is one of the few public transport sectors in the world that does not get government subsidies.
Business Day asked Toyota SA if SA Taxi’s decision to stop funding the purchase of new taxis would lead to fewer sales or job losses at its minibus factory. The firm did not answer the questions, but said minibus sales had remained constant in 2022 and 2023.
“Toyota SA Motors produces approximately 16,500 minibus taxis per annum,” senior corporate communications manager Lelo Ndizimela said. “Comparing the average 2023 and 2022 monthly sales, excluding the flood-impacted months, minibus taxi sales have remained at a similar pace.”
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‘TOO EARLY’
Asked whether SA Taxi’s decision to stop funding the purchase of 600 vehicles a month will affect it in 2024, Ndizimela said: “It is too early to tell and as such we can’t confirm this yet. As part of our standard internal practices, we will continue to monitor sales patterns.”
There are about 250,000 taxis on the road, according to a presentation by Transaction Capital.
Asked if it was worried that fewer new taxis would be on the roads as a result of its decision, SA Taxi CEO Doherty said the company was concerned about the ageing fleet, and the industry desperately needed support.
“Regarding our fleet of 37,000 taxis, we can ensure they are maintained and mechanically safe and sound. Given our experience in the preowned taxi space, we can positively affect the standards of second-hand taxis across the industry,” he said.
The AA would not comment specifically on the matter, but spokesperson Layton Beard said in general SA needs “safe, reliable and affordable transport” with minibuses being an integral part of the economy.