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Minibus financing service, SA Taxi has secured a R300-million investment from Futuregrowth Asset Management, it announced this week. The funding will go toward financing the Zebra Cabs owner-driver scheme.
SA Taxi acquired Zebra Cabs in 2015, with a view to expanding the service in the face of Uber’s popularity.
SA Taxi’s capital markets director, Mark Herskovits explained that the company was looking for ways to leverage their business model. They decided that their metered-taxi business model was best-placed to scale effectively.
“We will consider seeking additional funding sooner if required, but we first want to build scale in the key area of Johannesburg to achieve critical mass, before expanding operations to Cape Town and Durban. Our long-term goal is to have 3000 Zebra Cabs on the road by 2020,” said Herskovits in a press release.
“We have developed a business model tailored to the unique characteristics of an industry often perceived as higher risk,” he said.
He also elaborated on how their credit extension to owner-drivers or operators as a small business loan is different to a personal loan.
“This differentiates us from the vanilla financing options offered through banks, which focus mainly on the creditworthiness of the individual. This often precludes these previously disadvantaged individuals from accessing the finance needed to build a profitable small business.”
Zebra Cabs will use their investment to boost their number of operational metered taxis on the road in SA
SA Taxi will now apply its business model to the metered taxi industry in an attempt to give the sector a much-needed boost.
“In South Africa, the industry is a characterised by an old, poorly maintained fleet of vehicles and a lack of trust and transparency in pricing. We therefore feel that there is an opportunity to revolutionise the industry and also offer a suitable alternative to Uber, which is doing a great job at disrupting this sector.”
Customers of Zebra Cab will have a variety of booking and payment options to book a taxi as well. They can either contact a traditional call centre, access the company’s mobile platform or use the web-portal. Customers now also have the option of paying via card, e-wallet transactions or cash.
Featured image: Will via Flickr