How to kick-start a taxi business in South Africa

taxi business, uber clone app

The ease of booking taxis through apps and reliable pickup and drop-offs has made people choose ride-hailing services, with the demand notably increasing with each passing day. There are so many constraints to start a taxi business, that too, in parts like South Africa, many factors need to be considered. But, the ride-hailing business is substantially increasing; before 15 years, only 59% of South Africans used taxis. But, in the last 5 years alone, the usage has increased by 25%.

The ride-hailing revenue in the South African market amounts to US$384m in 2020. It is expected to show an annual growth rate (CAGR 2020 – 2023) of 17.1%, resulting in a market volume of US$616m by 2023. User penetration is 7.1% in 2020, which is also expected to hit 9.6% by 2023.

With such promising stats, starting a taxi business in South Africa can be a profitable decision. Here’s all you need to know to launch your taxi business.

1. Investment

One of the major requirements in any kind of business is, without a doubt, investment. The investment includes various factors, right from setting up the fort to executing hassle-free transits for the customers – every small detail should be accounted for while fixing your investment strategy.

Be clear about your maximum budget to curtail expenses and avoid overspending. You can choose commercial banks to fund your business or identify potential investors to get started.

2. Fleet

Next up, you need to set up your fleet of taxis. Taxis can include vehicles from third parties, drivers only and driver-partners, which could reduce your investment. But, if vehicles are needed to be purchased by the business owner itself, it could be a bit more expensive. In such scenarios, it is important to accommodate these spendings in your investment strategy. Start with a minimum of 10 vehicles for your fleet to withstand the competition.

3. Registration

Following this, you need to acquire a license from the respective departments of South Africa including Companies and Intellectual Property Registration Office (CIPRO), the Department of Labour and the Department of Transport. After the registration, you will be able to hire licensed drivers and free to operate in the region.

4. Branding

Keeping a brand name and logo for your company is also important as far as brand recognition is concerned. Having a solid brand name would earn you more customers since people would feel a lot safer with the brand being involved and ensuring secured transits.

5. Automation

Changing from traditional to an Uber-like taxi dispatch system means transforming your business into the digital way. In traditional practices, the operations involve lengthy paperwork and difficult dispatching operations. But when the dispatch system comes into the picture, most of the operations are automated, thereby lessening manual interventions and saving time.

6. Marketing

Your work is not over once your fleet is ready; it’s how you market your brand that lures more customers. South Africa is one of the fastest-growing countries in the African continent, but some parts of the country are not fully developed. Hence, adopting both online and offline marketing strategies could be a wiser option in the nation.

  • Offline marketing strategies

These kinds of marketing strategies include advertisements via radio, newspapers, discount pamphlets, etc. that reach people directly.

  • Online marketing strategies

This kind of marketing strategy involves attracting people through online methods. Social media is one of the primary sources of online marketing that involves promoting your brand through Facebook, Instagram, Twitter, LinkedIn, etc. and active people could have knowledge about the brand’s penetration in the country.

The taxi industry in South Africa is in its budding stage. With proper marketing strategies and following all the above-mentioned factors, it’s a lot easier to penetrate the taxi market and make a strong impression.

Try Tagmytaxi, a dispatch software that halves the workload for your business operations right from the start. Want to know more? Talk to our experts today.

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