The Job-Creating Potential of the Metered Taxi Industry in South Africa’s Urban Areas: Some Preliminary Findings

by LOWITT, S, 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

One of the aims of the Human Sciences Research Council’s Employment Growth and Development Initiative is to analyse economic diversification and identify potential future growth sectors, based on their growth potential and labour absorption capacity. One possible candidate is considered here – the metered taxi sector, which fits both these criteria well. This proposal provides a general introduction to the industry and its potential to grow and absorb labour. The aim is to catalyse a more intensive research and consultation process. Lowitt finds that while the potential target market does not have a culture of metered taxi usage, increased traffic and city densities suggest that this latent demand may soon become effective demand. The growth of the potential target market suggests that if or when such a transport shift arises, the demographic and income numbers would support effective demand for these services. On the supply side, the sector is biased towards owner-operators and smaller companies, suggesting a good fit with the country’s SMME and BEE policies. In addition, the skills required to participate in the industry are low. The indicative modelling numbers are conservative, but suggest that 13,000 jobs (or 26,000, using existing taxi numbers) may be created at minimum cost to the country. Such growth could possibly be harnessed cost-effectively simply by changing the regulatory environment and marketing the concept of metered taxis to the target market. The model did not take into account business demand, demand from disabled persons, or the potential of the market in Gauteng once the Gautrain becomes operational.