Few areas of South African life have a reputation as negative as the minibus taxi industry. The sight of one of these vehicles in your rearview mirror is not something most people in the country enjoy. Regardless, this transport system remains the lifeblood of the nation’s economy. Not only do a majority of South Africans rely on taxis for transport, but the business also generates a massive amount of income each year while providing jobs to hundreds of thousands of people. Perhaps you’ve thought about getting involved in this sector or maybe you’re just curious as to how it works, either way, a couple of questions always pop up – What do you need to operate a taxi in South Africa? How much money does it cost to start such a business and how lucrative is it anyway? How do I get a Taxi/Minibus Licence?
The first thing you’ll need is an Operating Licence which is issued by the National Public Transport Regulator (NPTR). Just keep in mind, this licence is not just reserved for minibus taxis.
Any person or business that wishes to use a vehicle as a road-based public transport service needs to first get an operating licence. Simply put, the moment you start driving people around for money or some other kind of remuneration, you’ll need a licence. This includes buses, tourist services, staff services, etc.
An operating licence only applies to a specific vehicle, in other words, if you wish to run a taxi business, you will need to get a separate licence for each vehicle you wish to use.
Secondly, minibus taxi drivers will need to acquire a Professional Driving Permit (PrDP) which is issued in addition to an ordinary driving licence. These PrDPs must be obtained before passengers are transported for remuneration. To obtain a PrDP you must be at least 21 years old, have a valid licence for the vehicle you wish to drive, and have been certified as medically fit by a doctor.
Certain criminal offences, such as drunk driving, will also prevent you from obtaining a PrDP if they have occurred in the last 5 years. PrDPs can be applied for in much the same way as a normal licence, simply approach your local Driving Licence Testing Centre with the appropriate documentation and make your application.
Where do I get an Operating Licence?
Applications for operating licences can be found online and submitted to the NPTR via email. Alternatively, you can also seek out –
- The NPTR offices
- The offices of your Provincial Regulatory Entity
- An applicable Municipality
What will I Need?
Besides completing the application form (here’s the KZN one, for example), you will also need to produce –
- Proof of Payment/Bank Receipt
- Certified Copy of your ID/Company Registration Certificate
- Tax Clearance Certificate and Sars Pin
- Company Proxy Letter and a certified copy of the ID of the proxy
- Statement of Oath
- Statement in terms of Section 62(1) of NTLA
- Certified Copy of the Vehicle Licence Disc and Road Worthy Certificate
- Certified Copy of the Vehicle’s Certificate of Registration
- Certified Copy of the Service Records/Service Plan/Maintenance Plan of Vehicle
- Recommendation Letter (3 needed if operating within the boundaries of the province, 5 needed if operating within the boundaries of the country)
- Certified Copy of the Public Passenger Liability (PPL)
- Certified Copy of Business Plan (for businesses with more than 10 vehicles or more than 10 applications for new operating licences)
- Relevant B-BBEE documents if applicable
Easy, right? But how much is this going to cost you?
How Much is a Taxi Permit in South Africa?
The application fee for an operating licence is R300. Once again though, it’s important to remember that each vehicle within a business requires an operating licence which means you’ll need R300 per vehicle. Other important fees to consider include –
- Accreditation – R1000
- Transfer of operating licence from one vehicle to another – R300
- Amendment of route – R300
- Change of particulars – R300
- Replacement of existing permit – R300
- Renewal of operating licence – R300
- Conversion Application when changing an old permit into a new operating licence – R300
Some of those prices are a bit steep which raises an important question – How lucrative is this business anyway?
How Much does a Taxi Make per Month?
Figuring out how much a taxi makes is harder than it seems. Rates change depending on the route taken and the area in which the taxi operates, additionally, different taxi associations tend to pay their drivers different amounts. It’s estimated that the average revenue for a taxi that works every day is around –
- R1 236 per day
- R37 500 per month
- R450 000 per year
The Department of Labour has also set a minimum wage for taxi drivers, however, many taxi associations do not adhere to these rulings so the actual amount made by any given driver is usually far lower than the average revenue of the taxi.
How do I Report a Taxi for Bad Driving?
There are two main methods for reporting badly driven taxis in South Africa. Firstly, if the offence is non-criminal in nature (ie, rude behaviour), you can call the National Taxi Association’s hotline (0860 726 822) and inform them of the incident. If the complaint is of a criminal nature (ie, drunk driving), you can contact the SAPS and let them settle the matter.
What is a Taxi Association? – How do I get a Taxi/Minibus Licence?
Taxi associations are groups formed by multiple taxi operators which seek to settle disputes and create operating guidelines within certain areas. The key to understanding these associations can be found when we study the various taxi routes within the country. Some routes are more lucrative than others and, obviously, any taxi driver would want to operate across that route to maximise their profits.
Here’s the issue, if everyone has this same idea, those routes will become congested with taxis while other less profitable routes are left without transport. This problem is compounded when certain drivers travel to other locations in an attempt to find passengers there.
Just like the Italian-American mafia of the late 19th and early 20th century, these associations have two sides. For some people, they are simply collectives that work to safeguard the rights and job opportunities of drivers within their area of influence. To others, they are little more than gangs that frequently become embroiled in deadly turf wars as they attempt to control local business.
How Much does it Cost to Start a Taxi Business in South Africa?
Starting your own taxi business can be a costly endeavour but the exact amount required will depend heavily on the size of your potential organisation. The average minibus will cost you anywhere between R100 000 – R350 000 depending on the age and quality, so if you want to start off with a modest enterprise of 10 top-notch vehicles, you’ll need a cool R3-4 million to get started.
As noted, you’ll also need accreditation (R1000) and you’ll require an operating licence for each vehicle you use (R300 each). Your taxi drivers probably won’t work for free so you’ll also need to pay them at least minimum wage.
Last, but certainly not least, you’ll need to work out your driver’s routes. The current taxi associations are unlikely to give you the most profitable circuits just because they see an entrepreneurial sparkle in your eyes and sending drivers along routes that ‘belong’ to other associations can lead to serious conflicts.
Is the Taxi Business Profitable? – How do I get a Taxi/Minibus Licence?
There are two main factors to consider when determining the viability of a taxi business as a money-making venture. First is location, the amount of money any given taxi makes in a day is directly linked to where it operates and the route it takes. If you manage to find a particularly rewarding circuit, you could be looking at some pretty great returns, on the other hand, if you find yourself driving up and down empty streets, the petrol costs will soon overtake your profits.
The next issue is your position in the taxi business. As noted, taxi organisations don’t always pay their drivers as much as they should, even when they work in very high-paying areas. Thus, a taxi business owner may find themselves earning a great deal of cash if they can find some good routes for their drivers, likewise, independent drivers who manage to acquire these routes may also end up doing quite well for themselves. Sadly, the average driver who answers to the average business owner is not going to be rolling in cash anytime soon.
In Conclusion -How do I get a Taxi/Minibus Licence?
Anyone wishing to operate a minibus taxi as a public transport service will first need to acquire an Operating Licence from the National Public Transport Regulator (NPTR). This licence is needed for other road-based public transport services as well including buses, tour guides and staff services. These operating licences only apply to a specific vehicle, in other words, a person wishing to begin a taxi business with more than one taxi will need to obtain an operating licence for each vehicle they wish to use.
Applications for operating licences can be found online or at relevant authorised offices in each province. The administration fee for this process is R300 as are the fees for other services including replacement, renewal or transfers. Accreditation fees are currently at R1000. The most expensive parts of the taxi industry are the vehicles themselves which can cost you anywhere from R100 000 to R350 000 depending on the taxi in question.
The main factors influencing the profits of a taxi driver/business owner are –
Operating Location
The demand for taxis in an area and the routes that will be taken by the drivers will heavily impact the profits made through the venture.
Place in the Hierarchy
Due to the largely unregulated nature of the industry, taxi business owners often underpay their drivers and collect massive profits for themselves. Likewise, independent drivers who happen to find a good route can expect sizable returns. Unfortunately, drivers working for larger organisations can oftentimes find themselves being taken advantage of.
Disclaimer LAW101: All of our posts are for research purposes only. Law 101 aims to assist its readers with useful information on the laws of our country that can guide you to make decisions in line with the South African Governmental Laws currently in place. Although our posts cite the constitution in many instances, they are intended to assist readers who are looking to expand their knowledge of the law. Should you require specific legal advice we advise you to get in touch with a qualified legal expert.
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