Taxi sector welcomes proposal for own bank

Discussion papers for industry indaba

The taxi industry has welcomed the proposal on the formation of a co-operative bank owned by the sector, saying the current financial services firms do not meet their needs.

On Friday, transport minister Fikile Mbalula released discussion documents that are a build-up to the taxi indaba taking place next month.

The indaba will come up with a final document that will detail how the government can transform the industry into an efficient, reliable and profitable sector benefiting all those involved in it.

In one of the documents, a proposal is being made for the formation of a co-operative bank to service the industry.

The SA National Taxi Council (Santaco) welcomed the proposed changes. “We need a bank that responds to the unique nature of the industry. The current financial services providers have enjoyed a monopoly over the industry and have [not] done anything to develop the industry. They make an estimated R2.3bn [annually] but have done very little to help the industry to grow,” said Santaco spokesperson Thabisho Molelekwa.

For years the government has struggled to transform the taxi industry.

The department of transport estimates taxis consume about 2.4b litres of fuel. However, the sector does not extract any value from this consumption.

“Any economic empowerment planned for the industry should include workers such as drivers, rank marshals and others. These workers should be developed and provided with a stake in any business opportunity the industry is participating in,” the document said. “Despite the model [of bank] chosen, the industry must be in a position to exploit opportunities presented by the value chain of the industry it operates in.

“The business should provide financial services to all its members, which [should] include provision of finance for new taxi vehicles at preferential rates and in a manner that lowers the premiums while increasing the money in the pocket of an operator.”

It suggests that in addition, the bank provide insurance for new taxis, have a dealership network owned and operated by taxi co-operatives, provide for vehicle maintenance and the supply of consumables such as fuel and lubricants, and electronic fare collection.