The protest at Toyota signalled the commencement of the group’s ongoing rolling protest action to highlight the taxi industry’s total exclusion from the industry’s value chain and bring targeted entities to the negotiating table.
MP Filtane, a spokesperson for Mass Taxi Industry Protest Action Committee, confirmed to Business Report that further entities on the list would be targeted for protest action this month.
The targets include vehicle manufacturers, banks, insurance and fuel companies and government entities.
Filtane confirmed SA Taxi, part of listed Transaction Capital, was one of the targets.
The list also contains four government entities, the national transport and trade and industry departments, the Industrial Development Corporation and Public Investment Corporation.
Filtane said SA Taxi had a market share of about 50percent of the taxi vehicle financing market and was by far the largest financier of vehicles for the taxi industry in the country.
He claimed SA Taxi had the biggest refurbishment centre in the country and its financing model was based on the expectation that taxi operators would not pay off their vehicles but default on their repayments, resulting in the vehicle being repossessed, refurbished and resold.
Filtane said there were also instances where SA Taxi charged taxi operators prime plus 18percent on vehicle financing deals.
Mark Herskovits, executive director of Transaction Capital, said there were an estimated 200000 minibus taxis in South Africa and at end-March this year SA Taxi finances was financing 27142 vehicles, which equated to a 13.5percent market share and gross loans and advances of R7.8billion.
Herskovits added that SA Taxi was a developmental credit provider, which in terms of the National Credit Act prescribed a maximum interest rate of 34percent.
He stressed SA Taxi’s pricing was risk based, resulting in interest rates ranging from 18percent to 28.5percent.
“SA Taxi’s weighted average interest rate at origination as at March 31, 2017, is 24.9percent,” he said.
Herskovits said that the claim that SA Taxi’s model was based on repossessing, refurbishing and reselling the vehicle as “unfounded and commercially uninformed. No business would be sustainable if it lends money merely to repossess the article,” he said.
Herskovits said SA Taxi currently expected a default rate of about 11.5percent, which meant 88.5percent of SA Taxi’s book was anticipated to go to full term.
He said SA Taxi’s investment in refurbishment infrastructure helped it mitigate credit losses.
By investing in refurbishing vehicles, SA Taxi was able to recover higher amounts on defaulted accounts to the benefit of both SA Taxi and the client.
The refurbishment centre also served as repair workshops for clients that were insured with the company, he said.
Herskovits added that participants within the minibus taxi industry were characterised as underserved small and medium enterprise taxi owners, with SA Taxi filling a critical funding gap and providing credit to entrepreneurs who were typically considered high risk and would otherwise be excluded from the formal economy given their credit profiles.
“It is estimated 90percent of SA Taxi’s client base is considered unlikely to be able to gain access to traditional finance.