taxi price hike

Image via Twitter: Minister of Transport |Mr Fix

More pain in the pocket: Commuters could face massive taxi price hikes

Taxi price hikes: Petrol and fuel prices and COVID-19 safety measures continue to put pressure on public transport.

taxi price hike

Image via Twitter: Minister of Transport |Mr Fix

Some bad news for public transport users: SA Taxi owner, Transaction Capital, just released a statement warning of an upcoming price hike. According to the statement, the rising cost of petrol and fuel, coupled with COVID-19 pressure, will mean that folks will also likely have to pay more for a taxi ride.

The news comes shortly after it was announced that South Africa is likely to see a huge petrol and fuel price increase due to the ongoing war in Ukraine following the Russian invasion on 24 February this year.

Soaring petrol prices and COVID pressure may result in taxi price hike

Just when you thought the economic situation in South Africa couldn’t get any worse, SA taxi owner Transaction Capital warns that the chances of rising taxi costs are highly likely.

BusinessTech reports that the taxi owner published a trading update ahead of its annual general meeting with the group warning of the upcoming price hike.

The reason for the hike, according to the update is the international oil price increase that started when Russia invaded Ukraine late last month.

Also according to the update, a price hike is on the cards to ensure that profits are still made as taxis are still carrying fewer passengers due to COVID-19 protocol.

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Russian invasion and soaring oil prices

“Russia’s military action in Ukraine could push international oil prices up even higher, compounding the increases in local fuel prices. We are tracking this situation and the potential impact it may have on the affordability of our operators. Minibus taxi fares have increased on average by approximately 9.3% per year since 2013 to absorb these financial effects.

“With a number of trips and passenger loads down due to the impact of COVID-19, the industry’s profitability is under strain and further fare increases may be needed.”

Transaction Capital

While the number of active COVID-19 cases in the country has decreased exponentially, the taxi industry continues to suffer from the effects of the second and third waves with a lower commuter volumes, it said, adding that the number is not expected to bounce back to what it was before the pandemic hit South Africa.

More minibus taxis, please!

Despite this, demand for new minibus taxis and Quality Renewed Taxis (QRTs) is exceeding COVID-19 levels and remains far higher than supply, it said adding that they are targeting better quality and experienced minibus taxi operators to curve the number of loans and advances.

“SA Taxi continues to grow loans and advances whilst preserving credit quality in the current environment. To this end, we are targeting better quality and experienced minibus taxi operators, resulting in lower loan approvals.”

According to their research, the use of minibus taxis has increased over the last eight years as commuters’ dissatisfaction with bus stop facilities increases and South Africa’s railway operations continue to decrease.

ALSO READ: Petrol price: South Africa *could* soon face ‘monstrous’ R2-per-litre hike