The taxi industry is brimming with opportunity for technology adoption and disruption, but a lack in understanding the needs of taxi owners may be holding back a key driver for large-scale adoption of innovations like the internet of things (IoT) and even fintech.
Taxis are the largest form of public transport in SA, accounting for two-thirds of the market or 15-million commuter trips daily, outpacing bus rides and trains, according to Transaction Capital’s minibus taxi platform unit, SA Taxi.
With an estimated 200,000 to 300,000 taxis on the road, the market is ripe for technology businesses to use these large numbers to scale up their technologies quickly. But that has not been the case as the local industry has been slow to adopt technology, and its use is much lower than it could be.
Ivan Reutener, a smart mobility expert at Royal HaskoningDHV, a consultancy specialising in transport, says that minibus taxis are an essential service but that “the industry has been treated like poor stepchildren and should be better integrated into the transport system using technology so that vehicle owners, taxi drivers and passengers can benefit from an improved system”.
Using an example, Reutener says if taxis were to be registered on an app-based platform, passengers could rate each driver’s service and those with higher ratings could receive higher subsidies in a strategy that could see an overall increase in road and passenger safety.
“Vehicles that are tracked would give parents the peace of mind that they need while their children are travelling in minibus taxis, while vehicle owners could also monitor driver behaviour and performance,” he says.
While technology has been able to break many barriers across society and business, Mbavhalelo Mabogo, founder and CEO of Quickloc8, a start-up specialising in technology for the taxi industry, says more work needs to be done to understand the real needs of taxi operators.
“Taxi owners, if they don’t like your product, they don’t like your product.”
Quickloc8 wants to disrupt the way operators have done business for decades, having developed a system that helps owners track where their vehicles are in real time while also calculating earnings automatically for each taxi.
“We’ve spent a lot of time talking to taxi owners, learning and understanding the problems they have, especially which ones are urgent. We knew that most taxi owners had never really used apps to that level. We had to design an app that is specifically designed just for them. Everything about it had to show that we’ve taken time to understand the problem.”
Having developed a tracking platform, Mabogo and his team moved to figure out how much money has been made by a taxi using their technology.
“We had to find a way to get data to help with tracking the movement. It was hard but we figured it out, developing a camera that uses artificial intelligence to count the number of people for every single load. And because we’ve also digitised the routes, it means we can create a formula that can tell how much a taxi has made,” he says.
The taxi industry provides much opportunity for tech firms to make money.
While Quickloc8 — which uses a subscription business model — has modelled itself as a fleet management platform for taxi owners, SA Taxi, which helps operators to finance their vehicles, says it uses technology to mitigate credit and insurance risk.
In SA, taxis could also form a piece of the smart city agenda that governments around the world are trying to implement. In Rwanda, free wireless connectivity in places like Kigali has been available to citizens at airports, bus stations, inside taxis and public transport vehicles since 2014.
Given renewed interest for mobile money in the local market, minibus taxis — largely a cash business — may be a driver for mainstream adoption of digital payments, if implemented correctly. As mobile operator MTN has noted with its reintroduction of mobile payments in SA, one of the key factors holding back adoption is the ubiquity of cash. Getting taxis to have mobile payment options would likely go a long way to increase its use.
All of this technology also requires connectivity at an affordable rate to win over taxi operators. In the case of Quickloc8, which has 2,000 taxis on its platform, the start-up has partnered with Vodacom to make that happen.
SA’s largest mobile operator is no stranger to the world of connected vehicles and has been investing in the internet of things (IoT) — the network of physical objects, embedded with sensors, software and other technologies for the purpose of connecting and exchanging data over the internet — as an area of future growth.
A deal was signed in 2019 providing for all new Toyota and Lexus models sold in SA to be fitted with in-car Wi-Fi connectivity. Technology group Altron would provide the Wi-Fi device and vehicle monitoring through Vodacom’s data network.
Pavesh Govender, a managing executive for IoT at Vodacom Business, says they see the progress made with these partnerships as “a significant milestone in the digital transformation journey of the African continent”. He says IoT has the potential to fundamentally change the way people experience the world and “remains a core growth area for Vodacom”.
To this end, the mobile operator has recently extended the partnership with Altron and Toyota to small and medium fleet owners.
“The new platform allows SME owners with more than one vehicle — and up to 50 — to enjoy the benefits of our connected car experience, which includes Wi-Fi,” says Govender.
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