How do you start a private metered taxi business?

Excerpts from www.entrepreneurmag.co.za

South African metered taxis don’t generally patrol the streets searching for fares. You have to phone a taxi company to get a ride, or find an area where they park. The sedan based, metered taxi industry only accounts for about 10% of the taxi transport market in South Africa.

How the meter taxi system operates:

In cities such as Durban, Johannesburg and Cape Town the metered taxi companies negotiate “ranking” facilities at the hotels, airports (via ACSA) and with large retailers and at shopping malls such as the Waterfront in Cape Town and Sandton City in Johannesburg. But the majority of their business is obtained by telephone bookings.

Who grants licences to operate?

The Provincial Taxi Council grants licences to private operators or drivers after consultation with local government and existing operators. The system is demand-driven, responding to requests from the private sector, rather than supply-driven, whereby licences are offered to those who qualify.

The grading system

Metered taxis are graded in South Africa. There are three grades.

  • Grade A: Vehicles not more than five years old as determined by their first date of registration. They have air conditioning, advanced braking systems, electric windows and other attributes determined by the grading board.
  • Grade B: Vehicles not more than eight years old as determined by their first date of registration, with air conditioning and other attributes as stated by the grading board.
  • Grade C: These are smaller and or older vehicles of types, standards and attributes determined by the grading board.

Regulations for metered taxis

The conventional non-shared taxi metered taxi has to follow certain regulations. No meter may be used or installed unless it has been tested and sealed by an accredited laboratory) or another institution approved by the SABS.

Meters must be designed so that they cannot be adjusted after being sealed. The seals are not allowed to be broken or tampered with. They must be fitted so the fare is visible to the passengers

Records

Operators of metered taxi vehicles must ensure that the driver keeps a logbook containing the following:

  • Date and time passengers picked up and dropped off for each journey
  • List the number of passengers carried
  • The origin and destination of each passenger conveyed
  • The fare charged and the number of kilometres travelled between point of origin and destination
  • The holder must maintain all the logbook records for a period of five years

Legal requirements

Other legal requirements to start a taxi business will vary from one area to another so it is best that you contact your local municipality for the complete list of documents and permits that you need. You will also have to register your company, prepare a business plan and register with SARS.

A Few Other Basics

A Few Other Basics

Insurance

Insuring your vehicles is essential. It’s unlikely that you would have the cash reserves to replace stolen or damaged vehicles or to deal with the serious insurance issues that come with transporting the public.

Maintenance

Many meter taxi companies do not run a fleet of cars. They work on the system that the taxi driver must own his/her car and as the owner are liable for maintenance of the car.

Reputable companies that operate in this manner have a safety officer to inspect the cars that represent the company. If you have your own fleet, maintenance is for your account and must not be neglected as your business depends on reliable and safe transport.

Where to find meters

Many local metered taxis are fitted with “Tel-A-Fare” which is a locally designed and assembled meter. It uses the latest technology and components. The meter offers a choice of two separate fares and a built-in memory which records all accumulated trips and takings. They retail at R1600 including installation.  Cell phones and radios work well as forms of communication with drivers. Two way radios can be installed in vehicles from around R750.

Where to get a Taxi Permit

Any person wanting to start a taxi service must apply to the National Transportation Commission or a local road transportation board for a permit to operate a taxi.
Other laws that will affect road transportation are:

  • Cross-Border Road Transport Amendment Bill: Draft (Gazette 29190, Notice 1297)
  • Cross-Border Road Transport Act (No. 4 of 1998)
  • National Land Transport Transition Amendment Act (No. 26 of 2006)
  • National Road Traffic Amendment Act (No. 20 of 2003)
  • National Road Traffic Act (No. 23 of 1996)
  • National Roads Amendment Act (No. 24 of 1996)
  • Road Traffic Laws Rationalisation Act (No. 47 of 1998)

For more information

Department of Transport website on http://nasp.dot.gov.za

Errors and omissions excepted (E&OE)