Advice on Buying a Taxi in South Africa

Factors to consider when you are thinking of buying a taxi in South Africa:

  • You need to decide how you want to operate. You can choose to operate a minibus, a metered taxi or an Uber taxi.
  • You need to be aware of the regulatory environment that governs the taxi industry
  • You will need to apply for an operating permit
  • Do your research around which routes will be profitable without too much wear and tear on your vehicle
  • Find out how much you’ll need to pay
  • Set a realistic financial management process
  • Consider operating costs such as fuel, service or maintenance costs and insurance
  • You will need to register your company with the Companies and Intellectual Property Commission (CIPC) and open a business account
  • You’ll also need to decide if you want to get a driver or if you want to do it yourself

What a lending institution will require from you when you are buying a taxi in South Africa:

  • You will need a valid operating permit
  • Credit risk will be based on the future cash flow that the operator will generate from his/her route
  • You will need to pay the necessary association fees

You may be provided with an 80% loan.

There are other factors to consider such as instalments and insurance.

Metered taxis:

To operate in the metered taxi industry you will need to apply to the National Transportation Commission.

Meters must be fitted, tested and sealed by an accredited laboratory. These meters retail from about R1600.

You get to choose the type of meter taxi you will buy, based on the grading system that exists in the industry. Metered taxis are graded as A, B or C.

  • Vehicles not older than 5 years old
  • Vehicles not older than 8 years old
  • Smaller and older vehicles

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