We anticipated that post the Covid 19 hard lockdowns that had a detrimental effect on the business viability of the taxi industry, it would not take long for the industry to recover and be profitable again. Here we are, almost two years down the line our industry is still saddled with the Covid 19 residual financial effects of the pandemic.
Recovery to pre Covid 19 taxi economics requires all the role player to pull together in the execution of a recovery plan that will require sacrifices from all sides. Central to the taxi economics is the taxi operator and the taxi itself as a tool of the trade. The recovery plan must therefore guarantee sustainability of the two. Upstream and downstream taxi industry value chain businesses will close in the absence of both the taxi operator and the taxi.
Covid 19 pandemic hard lockdowns introduced new business operations phenomenons that are alien to the South African economy, such as people working from home and others learning to walk or cycle to work and back. This has effectively reduced ridership in taxis by more than 40%. This has drastically eroded expected income streams for taxis and has inadvertently plunged the taxi industry into unprecedented financial crisis levels.
Everything has gone up in the taxi economy, taxi vehicle prices, tyres, insurance, tracking technology etc have all gone up beyond the affordability of many taxi operators.
Consequences of this taxi economy downturn are higher repossession rates, effectively driving many taxi operators out of the industry and thereby increasing levels of unemployment and entrenching devasting levels of poverty on taxi income depending on families and extended families.
Taxi operators have been forced to cut back on maintenance, default on their instalments, risk driving without insurance and forego security and management technology to reduce their running costs.
The National Taxi Alliance is contemplating calling for a taxi business seminar whereat OEMs, financial institutions, short insurance companies, tracking technology companies, suppliers and government will be invited for the sole purpose of saving this business wonder of the world from the jaws of obscurity.