How to Start a Taxi Business in South Africa

Many traditional taxis still rely on cash, have no tracking, and leave both drivers and passengers frustrated. At the same time, big ride-hailing apps like Uber and Bolt don’t always work for smaller towns, and their high commission fees eat into local drivers’ profits.

That’s where the opportunity lies.

If you’re someone who owns a car (or plans to buy one) and wants to turn it into a steady income, now is the perfect time to start your own taxi business in South Africa. Even if you’re completely new to the industry, it’s possible to launch smart legally, profitably, and with the help of new tools that weren’t available a few years ago.

This guide is written for first-time entrepreneurs, small business owners, and anyone who wants to enter the local transport market the right way. No fancy words, no guesswork. Just real steps to help you:

• Understand how the taxi industry works in South Africa today
• Register your business legally and avoid costly mistakes
• Get licenses, permits, and insurance without confusion
• Choose the right vehicle even if you’re starting with just one
• Decide whether to use an app (and how it helps your business grow)
• Build your brand, market your service, and scale at your own pace

By the end of this guide, you’ll have a clear roadmap to launch your own local taxi business even if it’s just you and your car. And the best part? You’ll own it 100%.

Let’s get started.

Let’s break it down clearly.

Types of taxi models in South Africa

Each model can work but what works best depends on where you are, how many cars you own, and who your target riders are.

What still works in 2025?

The minibus industry is still the biggest in terms of daily riders, but it’s competitive and often requires operating in specific routes. That means you’ll need a route license and to follow local rules closely.

Metered taxis are slowly losing ground to app-based services because customers now prefer tracking, booking ahead, and cashless payments. This opens a big door for new players who are smart, legal, and digital.

The fastest-growing model in 2025? Ride-hailing style taxis but owned and branded by local businesses, not big global apps.

Common mistakes new taxi owners make

If you’re just starting out, watch out for these problems:

1. No business registration: You can’t legally operate without it.

2. Missing licenses: You must have a Public Driving Permit (PrDP) and an operating license.

3. Using personal cars with no passenger insurance: This can cause legal issues if there’s an accident.

4. No tracking or booking system: Customers today want to book easily, pay digitally, and trust their ride is coming.

5. Trying to run without a proper plan or pricing: You’ll end up undercharging or losing money.

This step is easier than most people think, and you don’t need a lawyer. You just need to follow the process carefully.

1. Register with CIPC (Companies and Intellectual Property Commission)

CIPC is the official government body where you register businesses in South Africa.

You can do it online visiting their official website.

Here’s how it works:

Step 1: Create a customer profile on the CIPC website

Step 2: Reserve your business name (optional, but good if branding matters)

Step 3: Choose your business structure

Step 4: Pay the registration fee

Step 5: Get your registration documents by email

This whole process can take 7 to 14 business days, depending on CIPC load.

2. Choose the right business type

You’ll likely choose between:

3. Register for tax & open a business bank account

Once your company is registered, you’ll need to:

• Get a Tax Number from SARS (South African Revenue Service)
• Open a business bank account (most banks accept your CIPC docs + ID)
• Register for VAT only if you earn more than R1 million/year

Keep personal and business money separate this helps with tax filing and avoids legal issues.

Once this step is done, you’re officially a business owner and ready to apply for your taxi permits, insurance, and more.

What you’ll need:

Public driving permit (PrDP):

This is required if you're transporting paying passengers. You can apply through your local traffic department. You’ll need a valid driver’s license, medical test, and police clearance.

Operating license:

This allows your vehicle to legally carry passengers for public transport. Applications are handled by the Local or Provincial Regulatory Entity depending on your city or province.

Municipal approval:

Some cities have extra local rules (especially for metered taxis or minibus routes). Always check with your local municipality.

Requirements vary by location, so it’s smart to visit or call your local transport office early. Ask exactly what forms and fees are needed this avoids back-and-forth delays later.

Whether you’re starting with just one car or building a small fleet, here’s what you should consider.

Start small or plan a fleet?

If you’re just testing the market, it’s okay to start with one reliable car. Many successful taxi businesses in South Africa began this way. Once you see regular income, you can scale up by adding more vehicles and drivers.

If you already own a car in good condition, you may be able to use it. Just check that it meets transport regulations and has the right insurance.

Think of it like a roadmap. It tells you where you’re going, how much it’ll cost, and what steps to take.

A simple taxi business plan template

Here’s what to include in your basic plan:

1. Business overview:

What kind of taxi service are you offering? App-based? School runs? Airport rides?

2. Target market:

Who are your customers? Workers? Students? Tourists? What area will you serve?

3. Vehicle & setup costs:

How much will your car, registration, and permits cost? Add insurance, fuel, and maintenance.

4. Pricing model:

Will you charge per kilometer, flat rate, or time-based? What do others in your area charge?

5. Daily income goal:

Estimate how many rides you need to make per day to break even and make a profit.

6. Marketing plan:

How will people find you? Google? Facebook? Flyers? Word of mouth?

7. Growth plan:

Start with 1 car but what’s next? Will you add drivers? More cars? A branded app?

Keep it simple, but write it down. A short, clear business plan helps you stay on track and know when it's time to grow.

Traditional model

• Manual bookings or street pickups
• Cash-only payments
• No trip tracking
• Low tech, high chance of no-shows
• Hard to scale or build a brand

This model still works in some areas, but it’s slowly losing ground. Customers now expect more especially younger riders and professionals.

App-based model

• Passengers book through an app (like Uber , Bolt or your own)
• Trips are tracked in real time
• Riders can pay by card, mobile wallet, or cash
• You get a professional image from Day 1
• Easier to grow, manage drivers, and gain repeat customers

Even with few cars, an app gives you a big advantage. It makes your business look serious and helps customers trust you.

What an Uber-like app can do for you

Live tracking: Riders see where you are no waiting guesswork

Cashless payments: Secure, faster, no need for change

Better visibility: Get bookings from Google, WhatsApp, social media

Branded experience: You control the app, pricing, and service no commission to big platforms

When starting a taxi business, you have two choices drive the vehicle yourself or hire someone to do it for you. If you’re just beginning and want to keep costs low, starting solo is a smart. move. You stay in control, learn the business firsthand, and keep all the earnings.

If you’re planning to hire drivers, make sure they have a valid driver's license, a clean record, and a Public Driving Permit (PrDP). It’s also a good idea to check references and past experience. A driver who knows the local area, speaks clearly, and treats passengers well can really boost your business.

Training is important, especially if you're using a dispatch app. Drivers should know how to use the app properly, follow routes, and handle customers politely. Even a small amount of training on customer service and safety can make a big difference.

If you grow your fleet later, create a basic set of driver rules and offer incentives for those who perform well. Happy drivers mean better service and more returning customers.

How to set your taxi fare

Start by checking what other taxis in your area charge both traditional and app-based. Then, look at your own costs: fuel, maintenance, insurance, and any driver salary (if you’re not driving yourself).

You can choose between:

• Per kilometer pricing
• Flat rates for short trips or airport transfers
• Time-based pricing for waiting or long-distance trips

When to adjust your prices

• Busy hours like early mornings or evenings
• Special events or holidays
• Rainy days when demand is higher

You can also offer discounts or loyalty deals to get repeat customers for example, ride free” or special rates for school runs.

The key is to keep your pricing simple, fair, and easy for customers to understand. Add your prices clearly on your app, flyers, or business cards to build trust.

Online marketing tips

• Get listed on Google Business Profile so you show up when people search “taxi near me”
• Share your service on local WhatsApp groups and Facebook community pages
• Run small, targeted Facebook or Instagram ads with your contact number or booking link
• Ask happy customers to leave reviews online this builds trust fast

Offline marketing tips

• Partner with hotels, schools, local shops, or clinics in your area
• Print simple flyers or business cards and hand them out
• Use a vehicle sticker or magnet sign with your name and phone number
• Offer first-time riders a discount or free ride promo

Why word-of-mouth still wins

Happy riders are your best marketers. A simple “thank you” and on-time pickup goes a long way. People will remember good service and tell others especially in small towns or tight communities.

Tools that make your taxi business easier to run

Starting a taxi business in South Africa doesn’t have to cost a fortune. If you're beginning with few used vehicle and handling most things yourself, the overall setup can be quite affordable. On average, many new operators spend anywhere from R90,000 to R180,000 to get started. This covers the cost of a reliable secondhand car, business registration, permits, insurance, and a basic marketing budget.

If you’re choosing to go digital with your own booking app and dispatch system, platforms like ZervX offer entry-level plans that are affordable, especially compared to the high commissions taken by big ride-hailing platforms. Additional costs like fuel, regular maintenance, and driver salaries (if you hire) will come in monthly, so it’s important to plan for those early on.

The good news is, most of these costs are one-time or can be scaled slowly. You don’t need everything at once. With the right plan, you can start small and grow as your income builds.