Technology finally disrupting minibus-taxi industry

With new technology emerging and the launch of the Uber Bus service in Africa, there might finally be a force to disrupt the South African minibus-taxi industry. MARISKA MORRIS reports.

The South African minibus-taxi industry was once thought to be untouchable. Despite its informal and unstructured nature, the industry is the main mode of transport for about 7,2 million of the 14,2-million households in South Africa and carries 3,7-million employees to work, according to a Stats SA report by statistician-general Pali Lehohla.

Its success is mostly due to the industry’s ability to cater for an underserviced population. It often operates in remote areas, transporting some of the poorer South Africans at an affordable price, although it also caters for a large portion of the middle class in urban areas.

Government has attempted to disrupt the industry a number of times, with the introduction of bus rapid transport (BRT) routes being the most recent example. Despite BRT systems buying out taxi owners and employing former taxi drivers, minibus taxis have remained on the roads.

Some BRT routes, like the MyCiTi in Cape Town, are now trying to integrate minibus taxis on certain routes to provide a better service and increase the number of commuters.

However, it seems that a worthy adversary for the minibus-taxi industry might have finally arrived: technology. More specifically, e-hailing technologies made popular by ride-sharing services like Uber are challenging how the mostly informal industry operates. These technologies give commuters more control over their transport experience.

Benefits of e-hailing technologies

Commuters determine when and where the vehicle will collect them. While the taxi industry does offer quite a bit of flexibility in terms of pick-up and drop-off points, it can still be challenging for commuters to find a minibus taxi travelling in the correct direction that is not already full.

The e-hailing technologies also automate the payment process, which can make transporting commuters even easier for urban minibus-taxi drivers.

A further benefit to drivers is that they will be able to easily see the number of commuters requesting transport on a specific route, which reduces their need to drive around looking for commuters to fill up the vehicle. Owners can also have more transparency regarding the number of commuters and income they can expect.

Technology already available

In February, FOCUS reported that the new transport-management technology platform AftaRobot had launched in South Africa. The system, which was designed for mobile devices, is used by the Johannesburg Southern Suburbs Taxi Association.

Obakeng Morapeli Matlhoko, founder of AftaRobot, said: “Commuters will be able to use the app to book a taxi in advance. Taxi drivers will also benefit. As a load and route-based service, commuter behaviour and routes will now become clear, resulting in more efficient operations.”

While the system has been implemented with only one taxi association out of the many operating in South Africa, Matlhoko hopes to implement it with more than 10 000 vehicles and 4 000 owners over the next couple of years.

There is sure to be some pushback, but the industry can’t afford to delay the technology revolution much longer – especially if Uber’s latest venture is successful.

Uber’s minibus taxis

Uber launched its Uber Bus, or high-capacity vehicle, service in Egypt and Mexico in December. With the new service, commuters can request a ride through the app and are matched with passengers travelling in the same direction. The shared ride service is also said to reduce the cost.

James Thorne, in an article for news website Geek Wired, quotes Miraj Rahematpura, product manager at Uber’s high-capacity vehicles team: “We’re seeing the growth of this product take off faster than UberX did when it launched in those cities – really early on there are signs of product market fit.”

Since the launch of the service, Uber has also acquired its taxi-cab e-hailing competitor Careem, which operates in the Middle East, for US$ 3,1 billion (R43 billion). Before the acquisition, Careem bought out Indian bus shuttle service app Commut.

According to an Uber spokesperson, there are no plans yet to introduce a similar system to Uber Bus in South Africa: “While we are always looking at new features and products, this is not something we are looking at launching across sub-Saharan Africa at this time.”

Editor for news organisation The Infonomist, Wesley Diphoko, in an article for Independent Online, says: “There’s little that the local taxi industry can do to stop the entry of Uber Bus into South Africa. There’s only one option for the local taxi industry and that is innovation. The local taxi industry should embrace technology.

“The local technology eco-system should support the local minibus-taxi industry in this regard to avoid losing this lucrative market to a foreign-based technology entity.” Diphoko is not the only one calling for government to support the minibus-taxi industry to implement technology.

In a separate article for Independent Online, Clayton Naidoo, GM for Cisco Systems sub-Saharan Africa, notes: “A future where taxis can operate efficiently and profitably, while improving safety and providing a more convenient customer and employee experience, is possible. However, digital business transformation is required.

“There are some caveats, though. International experience shows that these solutions are best implemented alongside awareness campaigns for commuters and government incentives to drive adoption, as well as ensuring the regulatory environment is conducive.”

While it might take government some time to join in on the revolution, it would be best for minibus-taxi owners to adopt technology and optimise their services before the global e-hailing giant steps in and disrupts the biggest public transport market in South Africa.