The Minibus taxi, bus coach services and metered taxi industry in South Africa 2022

Introduction

Most South Africans are totally dependent on public transport (bus, taxi and rail) for transportation, spending on average 20% of their disposable income on public transport compared to a 10% average in developing countries. Public transport is inefficient and there is a lack of adequate infrastructure, which contributes to inequality. The passenger land transportation sector is a critical engine to drive socio-economic development and growth.

COVID-19 had a significant negative effect on the industry as people changed the way they live and work, and the probability of the industry returning to pre-pandemic levels in terms of passenger trips and revenue is unlikely. Buses and trains benefit from government subsidies, but minibus taxis are unsubsidised and have low profit margins. The taxi industry, including street-hailing and e-hailing services, was severely affected by the pandemic and continues to struggle to recover to sustainable levels.

Outlook

Passenger transport continues to suffer from inefficiencies and is not adequately focused on the customer, due to a rapidly deteriorating railway system, an unregulated minibus taxi industry and multiple bus networks with varying reliability rates. The levels of reliability, predictability, comfort and safety are still poor in certain areas and accessibility to services and universal access remain a challenge. National Development Plan 2030 goals for passenger transport to be user-friendly, less environmentally damaging, more affordable and integrated, are hampered by the fragmented nature of passenger transport. The passenger transport system is not sustainable under current operating and management practices, and low profitability levels affect the capacity of private operators to adequately maintain and recapitalise their fleets. However, revenue in the industry is expected to grow at an annual growth rate of 6.28% to 2026. The minibus taxi industry is growing based on urbanisation and a rising population combined with further decline in passenger rail transport and local bus services, but rising input costs are impacting the profitability of operators.

The long-distance bus and coach services sector is also showing signs of recovery. The metered taxi industry continues to face strong competition from e-hailing companies.

Report Coverage

This report focuses on the minibus taxi, bus and coach and metered taxi services industry. It includes information on the size and state of the sector, regulations and developments, including the effects of disruption by e-hailing companies and security issues in the bus sector. There are profiles of 57 companies including bus companies such as Arrow, Greyhound and Intercape, traditional taxi operators such as Rose and Eagle and e-hailing services Bolt and Uber.