* $3.7 bln industry moves 15 million people a day
* Taxis sprang up informally during apartheid era
* Market dominated by Toyota vehicles
* Nissan returns to taxi market after 18-year hiatus
By David Dolan
SOWETO, South Africa, March 10 Zakes Hadebe's
minibus taxi has nearly half a million kilometres on the clock,
a broken speedometer and a fuel gauge he struggles to keep just
Yet by 8 a.m. on a recent Friday, Hadebe and his rattling
Toyota had already overcome rain, traffic and an ever-rising
petrol price to ferry nearly 40 commuters from South Africa's
black township of Soweto to nearby Johannesburg.
South Africa's minibus taxi industry, scorned by other
motorists for reckless driving and dogged by a reputation for
violence, moves 15 million people every day, most of them lower
income blacks. More like buses than the taxis of New York or
London, the rumbling 16-seaters are the wheels of Africa's
With an annual revenue estimated at $3.7 billion, the
industry is also drawing attention from local finance firms and
global automakers. Nissan this month started selling
taxis in South Africa after an 18-year hiatus, looking to
challenge Toyota's dominance.
"If the taxi industry were to stop completely, there's no
cleaner at your house, there's no coffee at work, there's no
workers on the work floor," said Nkululeko Buthelezi, chief
executive of the South African National Taxi Council industry
The industry sprang up during white-minority rule, when
blacks had to live in townships miles away from the cities where
they worked and where bus service was spotty.
Since the end of apartheid in 1994, taxis have grown into
arguably South Africa's largest black-owned sector, with around
250,000 vehicles and directly employing 600,000.
While the average owner has 2-1/2 vehicles and employs
drivers, some, like Hadebe, do the driving themselves.
"The petrol is the biggest problem," said the 33-year-old,
whose daily revenue is at the bottom end of the industry average
of 1,000 to 2,500 rand ($93-$230), and that's before paying for
"You have to make use of each and every cent that you get."
The sound and spectacle of the often battered and barely
roadworthy taxis are impossible to miss; drivers persistently
bleat their horns to attract passengers, who use an elaborate
system of hand signals to indicate destinations.
A single finger pointing up will flag a taxi headed into
central Johannesburg, while four fingers indicate the suburb of
Fourways. The city of Johannesburg has even published a guide to
Drivers stop for passengers without warning, and their
recklessness, combined with shoddy maintenance, make for deadly
road accidents. In 2010 police arrested a man who was driving
drunk with 49 children in a taxi meant for 16.
The national taxi council last year started an academy for
customer care and driving skills. It also aims to formalise
hiring by registering drivers and promoting a code of conduct.
To improve road safety, the government offers owners a
subsidy to scrap old taxis and buy new ones, but uptake is slow
as the grant covers just a fifth of the cost of a new Toyota.
The industry has yet to stamp out the mafia-style violence
that flares up when rival owners battle for routes. Last month
the chairman of one Johannesburg taxi group was gunned down in
what police said was probably a planned execution.
Taxi violence claimed at least 140 lives in 2011, according
to one study, down from 258 in 1999, when townships were
scorched by waves of "taxi wars".
Still, that's enough to rival the deadly political
infighting of South Africa's mining industry.
Buthelezi said the taxi council had brought down violence,
but admitted more needed to be done. A "huge percentage" of
drivers still carry guns, he said.
"It has been a violent industry, so people develop certain
The industry's wider economic impact is in plain view on a
visit to one of the thousands of bustling taxi ranks that dot
cities and townships across the country, where commuters queue
for a lift or to transfer between routes.
Besides those employed at the ranks, such as queue
organisers, scores more flock to it to make their living. There
are women serving meals by the roadside, hawkers selling drinks
and clothing, and makeshift barbers offering a "cheese kop", or
Though taxis are better regulated than during apartheid,
finance remains a major hurdle for owners.
"Most of the people who come to us cannot access funding
from the traditional institutions," said Terry Kier, the chief
executive of SA Taxi, the taxi financing unit of
Johannesburg-listed Transaction Capital.
"They are very astute businessmen. They've got very deep
insight into their cash flows."
SA Taxi finances 23,000 vehicles, all of which are equipped
with tracking devices, giving it data into the profitability of
routes and individual owners. That helps it build a better
profile of the business than a simple credit history of the
owner, Kier said.
The company uses the data to sell localised advertising
space in taxis; the opening of a shop, for example, can be
advertised on routes in the immediate area.
Around 1,200 new taxis are sold every month in South Africa,
about 80 percent of them Toyotas.
Nissan, a major player until a regulatory change in 1996
prompted it to abandon the market, is aiming to sell up to 400 a
month of its new NV350. The NV350 starts at 307,000 rand
($28,600), just under the 312,100 rand for Toyota's Quantum.
So far Toyota has been able to fend off rivals. Chinese
automakers tried to muscle in, but their low-priced vehicles
haven't been able to take the punishment, owners say.
Toyota also has a long track record with the industry,
helping it win legal recognition from the apartheid government
in the 1980s, which sought to keep blacks from driving cabs.
An early Toyota taxi model was known as a "Zola Budd" in the
townships, said Johan van Zyl, Toyota's head for Africa, after
the 1980s South African distance runner famous for her speed and
Taxi owners have a similar resilience.
"It's a bunch of people who had to struggle to establish an
industry by themselves," van Zyl said. "They financed
themselves, they created their own industry and their own rules