Marketing For Taxi Firms

“Our focus [is] on taxi operators who intend to exit the industry and…is certainly about ensuring that we do not destroy vehicles that still have value.”

Delays in the programme were attributed to owners holding onto their old vehicles until compensation became available, but ongoing indecision about necessary specifications delayed the manufacturing process. Factory floors can never afford to remain idle, in anticipation of final decisions that never seem to be finalised. Production is planned months ahead and one ‘run’ must be completed before another can begin.

The government was called on to subsidise the industry in the same manner as it does urban rail and buses. Mass action was threatened. When this happens, taxis are not the only public transport that comes to an abrupt halt: strikers stone buses and have been accused of deliberately sabotaging rail services. Intimidation tactics work very well on average citizens, who subsequently also lose income because they are too fearful to venture out to work.

“…applications for conversion of permits into operating licences…for transfers and upgrade, including those applications made during the Be Legal Campaign [have not been processed].”

Permit issues became cause for fury on both sides of the fence. Authorities officiously claimed that big taxi operators were delaying, but instances, where processing channels, meant to deliver within three months, were taking “three to five years” were then exposed. Decisive action was demanded by the Minister. But little glitches are part of process when the tendered management allocation is only R250-million.

“many taxi operators…bring to my attention the serious weaknesses that characterise(s) many of the Operating Licensing Boards in the Provinces.”

Applications finally closed in the latter part of 2006, only a year later than originally planned. Operators at last began seriously to calculate the affordability of the new vehicles on offer.

Making the price right

“For us, a strong, safe and vibrant taxi industry remains a vital element in Government’s efforts to bring about significant improvements in our public transport system.”

The initial taxi recap plan to tender manufacture, relied on high numbers keeping the prices low. When that option fell away, government no longer had any control over the pricing and since then, their only task has been to lobby in defence of an often non-creditworthy market.

The total cost of replacing the 100 000 fleet is estimated at R15-billion. Wesbank pledged R3.6-billion to the cause over five years, whilst a memorandum of understanding was signed by ABSA, Nedbank, Asset Finance, Standard Bank, DaimlerChrysler Services and Santaco.

“…affordability will be determined by other important factors such as the level of competition in the market, willingness and ability of the financial institutions to develop differentiated products suitable to the taxi industry.”

The law regarding Road Accident Fund (RAF) payouts has recently changed to limit the benefits that can be obtained by claimants, but the possibility exists for players in the taxi industry to access top-up public- and passenger-liability cover.

Should the industry consider this, it should be said that their contributions could be high and the limits imposed on insured providers could achieve more to regulate the industry, than the government: clauses could include the need to prove regular vehicle maintenance and safety checks, regular driver training, permit restrictions, regular driver health checks, etc.

“The taxi industry should also be in a better position to negotiate better terms from both the financial institutions and manufacturers.”

The other change that might possibly rock the nation would be that all vehicles on hire purchase must legally be insured. In theory, this sounds like a revelation, since few taxis presently are. But don’t hold your breath and do cancel dreams of insurance payouts in cases of taxi crashes! Rumour has it that, with the increase in vehicle purchases, a new phenomenon has already hit the country.

Apparently, our car pounds are filling with crashed vehicles whose private owners cancelled their insurance despite the fact that those vehicles still belong to the banks that financed them. The vehicles are repossessed as soon as they are involved in accidents, neither use to man nor beast. Since the majority of these vehicles were privately purchased, it seems logical that the same tactic may be adopted by the taxi fleet.

“It is the taxi operators, and not Government, who are ultimately responsible for their businesses and for the choice of vehicles, and as such will still make their business decisions.”

Taxi owners reeled under the Taxi Sectoral Agreement at the end of April 2005, which defines issues such as working hours, unemployemt insurance and minimum wages (between R945 to R1 350 a month; hardly exorbitant) for rank cleaners, marshals and taxi drivers, for the first time.

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