Integration of cooperative business model in the South African taxi industry: A case study of Johannesburg municipality

Abstract

The objective of this business venture is to establish a cooperative minibus transportation organization structured around shared ownership. Members of this cooperative will be drawn from the DORLJOTA and FARADAY Taxi Associations, both active in the Johannesburg metro area. This cooperative will operate independently from traditional taxi associations, with its own operational protocols, policies, and governance structures. This venture aims to provide taxi owners with opportunities to explore new markets and business segments. By participating in the cooperative, members will not only diversify their revenue streams but also access skills development programs for themselves and their drivers. Additionally, they will gain valuable business insights and achieve economies of scale through efficient fleet management. The primary goal of the proposed cooperative is not to disrupt the current operations of minibus taxis serving predominantly low-income communities. Instead, it seeks to introduce a specialized taxi service catering to the urban middle class. This service will offer competitive pricing comparable to e-hailing services, adhere to stringent policies, and provide the urban middle class with a reliable public transport option. By doing so, this initiative offers two-fold benefits: cooperative members expand their income sources while the urban middle class gains access to a more affordable alternative to costly e-hailing services and private vehicle ownership. The growing challenges faced by urban vehicle owners, including high ownership costs, rising fuel prices, and traffic congestion, highlight the need for such initiatives. This cooperative venture will selectively recruit taxi owners with well-maintained vehicles, positioning them as both shareholders and clients. The vehicles provided by owners and associations constitute the primary assets enabling the business to serve middle-class commuters. Recognizing the greater spending power of the urban middle class, the business will price its services, accordingly, setting itself apart from traditional taxi services.