Taxi owners who claim they are being ripped off on a daily basis by vehicle finance and insurance companies are looking for a parallel model to help the industry overcome financial problems.
This after taxi owners brought major roads in Johannesburg to a standstill on Friday demanding better terms for taxi vehicle financing.
Disgruntled taxi owners and various taxi associations say they are paying up to 28% interest on loans from some finance companies.
The industry has threatened a national shutdown if changes are not made to the existing financing model.
“Taxi Choice is the business wing of Santaco‚ so effectively we are the taxi industry’s business wing.
“The taxi industry’s ambition is to own its value chain such as owning our finance companies. We want to have ownership in a vehicle‚ insurance and tracking device company. But to start our own companies is an extremely difficult thing to do‚ so the first step we need to do is to partner with people that are already doing it so that you can get better prices for taxi operators and build some capital to then establish your own over time‚” said Thulani Qwabe‚ COO of Taxi Choice‚ the SA National Taxi Council’s business wing.
Qwabe said they currently do not have the financial capacity to lend to taxi operators but have a keen interest in learning more about the lending industry.
“It is not Taxi Choice that has money and disperses it to the client‚ it’s the banks who are our partners that do that. We participate in a value chain but in a very small way‚” Qwabe said.
“In terms of finance‚ we don’t do it ourselves‚ but we work with companies and banks that finance taxis. We also package deals for taxi operators such as filling in application forms and collect all the required documents and then send through those documents to the banks which then do the final sign-off and pay-out and they manage the loan book‚” Qwabe said.
“But what we are saying to SA Taxi Finance and the banks is that we are unhappy about the way they are doing business. We would like to see change for the man on the ground‚ as well as change for the taxi industry structures‚” Qwabe added.
Following the strike on Thursday SA Taxi Finance‚ a major financial service provider for the industry‚ proposed a 3% drop in interest rates. Taxi owners rejected this offer saying they would organise a national strike on July 12.
A Quantum minibus taxi presently costs around R440‚000 compared to R220‚000 in 2010.
According to Qwabe‚ most South African banks charge an average interest rate of 16% — 18.5% to finance taxi purchases.
We need to finance ourselves‚ say taxi owners
Taxi owners who claim they are being ripped off on a daily basis by vehicle finance and insurance companies are looking for a parallel model to help the industry overcome financial problems.
This after taxi owners brought major roads in Johannesburg to a standstill on Friday demanding better terms for taxi vehicle financing.
Disgruntled taxi owners and various taxi associations say they are paying up to 28% interest on loans from some finance companies.
The industry has threatened a national shutdown if changes are not made to the existing financing model.
“Taxi Choice is the business wing of Santaco‚ so effectively we are the taxi industry’s business wing.
“The taxi industry’s ambition is to own its value chain such as owning our finance companies. We want to have ownership in a vehicle‚ insurance and tracking device company. But to start our own companies is an extremely difficult thing to do‚ so the first step we need to do is to partner with people that are already doing it so that you can get better prices for taxi operators and build some capital to then establish your own over time‚” said Thulani Qwabe‚ COO of Taxi Choice‚ the SA National Taxi Council’s business wing.
Qwabe said they currently do not have the financial capacity to lend to taxi operators but have a keen interest in learning more about the lending industry.
“It is not Taxi Choice that has money and disperses it to the client‚ it’s the banks who are our partners that do that. We participate in a value chain but in a very small way‚” Qwabe said.
“In terms of finance‚ we don’t do it ourselves‚ but we work with companies and banks that finance taxis. We also package deals for taxi operators such as filling in application forms and collect all the required documents and then send through those documents to the banks which then do the final sign-off and pay-out and they manage the loan book‚” Qwabe said.
“But what we are saying to SA Taxi Finance and the banks is that we are unhappy about the way they are doing business. We would like to see change for the man on the ground‚ as well as change for the taxi industry structures‚” Qwabe added.
Following the strike on Thursday SA Taxi Finance‚ a major financial service provider for the industry‚ proposed a 3% drop in interest rates. Taxi owners rejected this offer saying they would organise a national strike on July 12.
A Quantum minibus taxi presently costs around R440‚000 compared to R220‚000 in 2010.
According to Qwabe‚ most South African banks charge an average interest rate of 16% — 18.5% to finance taxi purchases.
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