Market Insights Mobility Shared Mobility

Taxi - South Africa

South Africa

The Taxi market in South Africa is poised to witness significant growth in the coming years.
According to projections, the revenue in this market is expected to reach US$0.33bn in 2024.
This growth trajectory is anticipated to continue with an annual growth rate (CAGR 2024-2028) of -3.18%, leading to a projected market volume of US$0.29bn by 2028.
In terms of user base, the Taxi market is expected to witness a substantial increase, with the number of users projected to reach 9.09m users by 2028.
This signifies a growing popularity and reliance on taxi services in South Africa.
The user penetration rate, which measures the proportion of the population using taxi services, is projected to be 16.3% in 2024 and 14.3% by 2028.
This indicates that a significant portion of the population will continue to rely on taxi services for their transportation needs.
When it comes to the average revenue per user (ARPU), it is expected to amount to US$33.07.
This metric provides insights into the average amount of revenue generated from each user in the Taxi market.
It is worth mentioning that, in a global comparison, China is expected to generate the highest revenue in the Taxi market, with an estimated revenue of US$66,020m in 2024.
This highlights the immense size and potential of the Chinese market in the taxi industry.
Overall, the Taxi market in South Africa is poised for substantial growth, with increasing revenue, user base, and user penetration.
These projections indicate the rising demand for taxi services and the significant role they play in the transportation sector of the country.
The rise of ride-hailing apps like Uber and Bolt has disrupted the traditional taxi industry in South Africa, leading to increased competition and improved convenience for passengers.

Key regions: Saudi Arabia, India, Europe, United States, Malaysia

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Analyst Opinion

The Taxi market, covering exclusively services booked offline through methods like street hailing or telephone calls, remains an integral part of the broader transportation industry on a global scale. While ride-hailing platforms have revolutionized urban mobility through digital innovation, offline taxi services continue to play a crucial role, even if it is declining in many regions.

The significance of traditional taxis lies in their reliability and familiarity to passengers, especially in regions where technology adoption may lag or where personal interactions with drivers are valued. These services are deeply rooted in local transportation systems and provide accessible, point-to-point mobility solutions.

However, the traditional Taxi market faces its own set of challenges in the era of digital disruption. Competition from ride-hailing platforms has intensified, prompting traditional taxi operators to adapt to evolving consumer expectations. Some have incorporated mobile apps to compete on convenience and have begun implementing digital payment options. However, this Taxi market within the Shared Mobility market focuses exclusively on offline generated business. Online bookings of taxi services are included in the Shared Mobility Ride-hailing market.

Regulatory issues also loom large, as governments strive to maintain a level playing field between traditional taxis and ride-hailing companies. Balancing safety standards, pricing regulations, and licensing requirements remains a complex endeavor, often leading to contentious debates and changes in the regulatory landscape.

The Taxi market continues to serve as a vital component of mobility solutions. While facing competition and regulatory challenges, it remains an essential mode of travel, particularly in regions where it aligns with local preferences and infrastructure. However, it is essential to acknowledge that this offline taxi business is likely to face a further decline in many countries, albeit not disappearing entirely in the near future. To navigate this evolving landscape successfully, taxi operators must recognize the importance of offering their services online. Embracing a hybrid business model that combines offline and online bookings is considered an effective approach to sustaining their relevance in the ever-changing transportation landscape. This strategy allows traditional taxi services to preserve their reliability and personal touch while harnessing the benefits of digital innovation to remain competitive in the market.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings and revenues of traditional offline taxi services.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, third-party studies and reports, federal statistical offices, industry associations, and price data. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as demographic data, GDP, consumer spending, internet penetration, and device usage. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, the S-curve function and exponential trend smoothing methods are applied.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.