TOPIC
: Minibus-taxi Transformation
SPEAKER : Abdul Bassier
Matatus (Kenya)
Daladalas (Tanzania)
Minibus-taxis (South Africa)
COMMON CHARACTERISTICS
• Cash based
• Demand responsive
• Unscheduled
• Individual ownership of
vehicles
• No / few contracts
• No operating subsidies
• Different management
styles
PRESENTATION
OUTLINE
PRESENTATION OUTLINE
1. Evolution of the Minibus-taxi Industry
2. IRT Phase 1 approach
3. N2 Express approach
4. Lessons learnt
5. Alternative approach
6. Benefits of a transformed minibus-taxi industry
THE MINIBUS-TAXI
INDUSTRY IN CAPE TOWN
EVOLUTION OF THE MINIBUS-TAXI INDUSTRY
• The concept of a shared taxi
started in the 1960s using
metered taxi sedan vehicles
• Responding to demand
created by subsidised
scheduled bus services not
providing services on certain
routes
EVOLUTION OF THE MINIBUS-TAXI INDUSTRY
• Later, as popularity for the service grew, started
using bigger vehicles (minibuses)
• Started competing
with scheduled
buses services on
lucrative routes
EVOLUTION OF THE MINIBUS-TAXI INDUSTRY
• Always a highly regulated
environment
• Permit / operating licenses required
to render public transport services
• 1980’s licensing authorities
changed their attitude towards
issuing of permits resulting in a less
regulated environment
• Rapid growth in minibus-taxi
services
EVOLUTION OF THE MINIBUS-TAXI INDUSTRY
• In late 1990’s government policy
shifted toward formalising the
minibus-taxi industry
• Established the office of the
Registrar at a provincial level
• Required all Route Associations to
be formally registered and abide by
a standard constitution governing
their affairs.
• Applications for new permits had to
have the support of the Association
EVOLUTION OF THE MINIBUS-TAXI INDUSTRY
Taxi Recapitalisation Programme
WHY TRANSFORM THE MINIBUS-TAXI INDUSTRY
If it ain’t broke, don’t fix it ?
Current State of the Minibustaxi Industry
Passenger, Operator and Government Perspective
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Passenger Perspective
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
National
Household Travel
Survey for the
Western Cape
(StatsSA)
Weekend Argus
11 April 2015
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
“Taxis were found to be, by far, the most
common mode of public transport.
Roughly half of respondents in the
province, however, complained of
overcrowding, concerns about
roadworthiness, and how taxi drivers
treated passengers.
But taxis were praised for being easy to
catch and cheap”
Weekend Argus – 11 April 2015
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Operator Perspective
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Operator Perspective
●
●
●
●
●
●
●
●
Driver controls business
Owner determines target
Competition on routes
Managing the maintenance of the vehicle
Not sure what driver takings are
Paying protection money
Income not stable
No subsidy
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Government Perspective
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Government Perspective
Regulation
●
●
Assessing new applications
Advertising, Board Hearings, Appeals, etc.
Enforcement
●
●
Limited/insufficient resources
Large number of illegal taxis
Facility (PTI) Management
●
●
Limited/insufficient resources
Cleaning, security and maintenance contracts
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Other road users’ Perspective
IRT PHASE 1 APPROACH
IRT PHASE 1 APPROACH
Designed to replace all affected minibus-taxis and
buses on the MyCiTi routes
Feeder
routes
REPLACE
ALL WITH
IRT PHASE 1 APPROACH
Why replace all affected minibus-taxis and buses
on the MyCiTi routes
1
Required all these
passengers on the
MyCiTi system
IRT PHASE 1 APPROACH
Why replace all affected minibus-taxis and buses
on the MyCiTi routes
2
Easier to enforce
IRT PHASE 1 APPROACH
Who will operate the new service
Determining Market Share
BASED ON FARE REVENUE
IRT PHASE 1 APPROACH
Who will operate the new service
Operator
Average Daily
Pax
(7-day average)
Average Daily
Fare Revenue
Market
Share
BLAAUWBERG TA
26,560
186,521.61
20.31%
CENTRAL UNITY TA
8,573
56,246.62
6.12%
DUNOON TA
16,360
103,041.89
11.22%
GOLDEN ARROW BUS SERVICES
6,254
46,521.75
5.07%
MAITLAND TA
9,253
59,274.49
6.45%
PENINSULA TA
37,184
247,950.30
27.00%
SIBANYE BUS SERVICES
19,536
140,382.20
15.28%
UNITED TA
1,917
11,873.25
1.29%
VREDEHOEK DEVILS PEAK TA
2,473
13,599.31
1.48%
YSTERPLAAT TA
8,264
53,036.52
5.77%
136,372
918,447.94
100.00%
Overall Total
Taxi
80%
Bus
20%
IRT PHASE 1 APPROACH
Company formation
35%
CONTRACT 1
INNER CITY
COMPANY A
3 Taxi
Associations
45%
20%
CONTRACT 2
CONTRACT 3
COMPANY B
5 Taxi
Associations
COMPANY C
2 Bus
Companies
BLAAUWBERG
TBART
IRT PHASE 1 APPROACH
Compensation Model
IRT PHASE 1 APPROACH
Compensation Model
1. Not surrender his
license and continue
to operate
2. Accepts
compensation and
buys shares into
VOC
421 (64%)
1 OL
Mr Wilcox
3. Accepts
compensation
and exits the
industry
238 (36%)
660
N2 EXPRESS APPROACH
N2 EXPRESS APPROACH
Top-up service - replace only some minibus-taxis on the
affected MyCiTi routes
Khayelitsha route
(24%)
Mitchells Plain route
(26%)
N2 EXPRESS APPROACH
Company formation
JV COMPANY
3 equal shareholders
TAXI COMPANY A
14 Taxi
Associations
TAXI COMPANY B
1 Taxi
Association
COMPANY C
1 Bus
Company
Codeta
Route 6
GABS
Khayelitsha Taxi
Associations
Mitchells Plain Taxi
Association
Golden Arrow Bus
Services
N2 EXPRESS APPROACH
Emphasis on Capacity building (3yr contract)
LESSONS LEARNT
LESSONS LEARNT
Not always desirable to replace ALL minibustaxis with MyCiTi buses, especially on feeders
routes
1. Minibus-taxis can offer more
frequent and flexible services
2. Understanding user preference
3. Not cost effective for MyCiTi to
offer the same services
4. Enforcement challenges
LESSONS LEARNT
ALSO
Limited funding availability
Need to consider a combination of minibus-taxi and
MyCiTi services on feeders routes
LESSONS LEARNT
S O M E T R A N S F O R M AT I O N R E Q U I R E D
CURRENT
TRANSFORMED
LESSONS LEARNT
OT H E R B E N E F I T S O F A
TRANSFORMED INDUSTRY
1. Offers benefits to the entire
minibus-taxi industry, not only
those affected by IRT
2. Will improve conditions for :
 Minibus-taxi passengers
 Other road users
 The minibus-taxi operator
 Government
TRANSFORMED
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Impact of Phase 1 & N2 Express
 Mindset change
 Development and capacity
building
 Self regulation (supply and
demand)
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Impact of Phase 1 & N2 Express
 Generally well received by the
industry
 Rest of industry looking
forward to being involved in
IRT
 Some will have to wait 20
years before they stand to be
affected
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Initiatives on the horizon
1. Contracting function
2. MRE function
3. IRT Phase 2
C U R R E N T S TAT E O F T H E M I N I B U S - TA X I I N D U S T R Y
Windows of Opportunity to Transform the broader
industry
Current
State
 Renting of
permits
 Driver issues
 Illegal taxis
 Enforcement
 Membership
drives
Contracting
function
MRE
function
Phase 2
Future
State
 Improved driver
behaviour
 Improved
profitability
 Self enforcement
 Structured to
benefit from
contracts
Opportunities
Contracting
function
MRE
function
Phase 2
 Benefit from a portion of the contacts
(negotiated with GABS)
 Prepare to tender for new bus contract
(7 years)
 Greater role in supporting OL
applications
 Self-regulation role
 Compensation and shareholding
 VOC management
 Capacity building and development
ALTERNATIVE
APPROACH
(Transformation Model)
T R A N S F O R M AT I O N M O D E L
Current profile of
the taxi industry in
Cape Town
Provincial Structure
1
Regional Structure
6
Route Association
102
OL Holder
7,000 –
10,000
Renter of OL
Owner of vehicle
Driver
16,000+
T R A N S F O R M AT I O N M O D E L
1
Facilitate the formation of
Association-based Taxi
Operating Companies (TOCs)
across the City as a precursor
to the formation of PTI-based
RTCs and contract-based VOCs
VOC
RTC
TOC
A
Association
T R A N S F O R M AT I O N M O D E L
2
Facilitate the transfer of all
Operating Licenses from
individual operators to
Association-based Taxi Operating
Companies (TOCs)
T R A N S F O R M AT I O N M O D E L
3
Invest in building the
capacity of these TOCs in the
same way the City has
invested in a 3 year capacity
building programme for the
2 taxi-based N2 Express
companies
T R A N S F O R M AT I O N M O D E L
4
Once the TOCs are formed and
functional and able to form
Regional Taxi Companies (RTC)
contract the PTI management
function (security, cleaning and
minor maintenance) to these RTCs
Other contracting opportunities eg.
advertising rights at PTIs
Land for depots/fuelling facilities
T R A N S F O R M AT I O N M O D E L
RTC
Regional/PTI based
M Plain
Khayelitsha
Bellville
TOC
Association
A
B
C
D
E
F
G
H
I
J
K
L
M
M
N
O
P
Q
T R A N S F O R M AT I O N M O D E L
IRT Phase 2/3/4
VOC
Affected TOCs
B
A
TOC
Association
A
B
C
D
E
F
G
H
I
J
K
L
M
M
N
O
P
Q
T R A N S F O R M AT I O N M O D E L
IRT Phase 2/3/4
VOC
RTC
Vehicle Operator Company
Affected TOCs
Regional/PTI based
M Plain
Khayelitsha
B
A
TOC
Association
A
B
C
D
E
F
G
H
I
J
K
L
M
M
N
O
P
Q
BENEFITS OF A
TRANSFORMED
MINIBUS-TAXI
INDUSTRY
BENEFITS OF IMPLEMENTING THE MODEL
Passenger Perspective
●
Driver behaviour towards
passengers
Driver employed by TOC and is better able offer
appropriate training
Also able to reprimand and deal with abusive drivers
●
Speeding and reckless driving
Drivers no longer need to compete for passengers
to meet their daily targets
BENEFITS OF IMPLEMENTING THE MODEL
Passenger Perspective
●
Overcrowding
Operations managed by TOC with right
type and size and number of vehicles to
meet the demand
BENEFITS OF IMPLEMENTING THE MODEL
Operator Perspective
●
●
Profits
Greater efficiency through limiting
vehicle numbers and bulk buying
Capacity building opportunities
Development of the Taxi industry
to prepare them for IRT contracts
and other bus contracts
BENEFITS OF IMPLEMENTING THE MODEL
Government Perspective
Regulation
●
Assessing new applications
Instead of simple supply
and demand analysis TOCs
need to prepare business
plan showing the number of
licences required to run the
company at a profit
BENEFITS OF IMPLEMENTING THE MODEL
Goverment Perspective
Enforcement
● Limited/insufficient resources
● Large number of illegal taxis
TOC’s are incentivised to keep illegals off the
road
Reduce pressure on limited enforcement
capacity
Compliance / penalise through PTI contracts
Better maintained and quality vehicles
BENEFITS OF IMPLEMENTING THE MODEL
Goverment Perspective
Facility/PTI Management
● Limited/insufficient resources
● Cleaning, security and maintenance
contracts
Industry manages PTIs with City
playing an oversight role
PTI’s likely to be managed better
with locals having a vested interest
BENEFITS OF IMPLEMENTING THE MODEL
Key Challenge
● Convincing the operating licence holder to transfer
his/her license to the TOC in exchange for
shareholding
● Business Plan for TOC must show the operator will not
be worst off
BENEFITS OF IMPLEMENTING THE MODEL
City / Government’s contribution
1. Facilitate establishment of TOCs
2. Make available funding for capacity
building
3. Make available land for depots and
fuelling facilities
4. Make available PTI management
contracts (cleaning, security and
maintenance) available to the industry
5. City to play an oversight role in these
companies
BENEFITS OF IMPLEMENTING THE MODEL
WIN
WIN
WIN
WIN
Passenger
Minibus-taxi
operator
Government
Other road users