Taxi operators making more money, despite inflation
Minibus taxi operators are more profitable than a year ago despite relatively high vehicle and fuel inflation, their main financier Transaction Capital said in its results statement on Tuesday.
The average cost of minibus taxis rose about 14% to R400,000 from R350,000, and petrol prices and driver wages increased by about 6% over the year to end-September.
Transaction Capital said data from its subsidiary SA Taxi showed minibus taxi operators managed to improve their profitability despite these cost increases.
"Profitability improvements are primarily driven by fare increases of 5%-7% over the last 12 months. In addition, a greater proportion of commuters are choosing minibus taxis over bus or rail due to competitive pricing, convenience and accessibility; and increasing commuter density due to urbanisation has also increased profitability for operators," Transaction Capital said.
The group said demand for minibus taxis exceeded supply.
Of about 200,000 minibus taxis operating in SA, only about 60,000 are financed via loans. Of these, 28,724 vehicles are financed by SA Taxi, amounting to R8.3bn.
"Despite political uncertainty and concern about the sovereign rating downgrades, SA Taxi raised R6bn in debt facilities during the year, securing its requirements for the 2018 financial year," the company said in its results statement.
More than 85% of SA Taxi’s clients buy insurance from the group.
Transaction Capital’s interest and other income for the year to end-September grew 17% to R1.97bn and its after-tax profit grew 23% to R568m.
It declared a final dividend of 25c, taking its total for the year to 40c, a 33% increase from the prior year’s 30c.