South Africa’s Minibus Taxi Industry: Structure, Constraints, and Policy Reform

F. Christopher Eaglin ()
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F. Christopher Eaglin: Duke University
Authors registered in the RePEc Author Service: Lukasz Grzybowski

No 407, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: South Africa’s minibus taxi industry is the country’s dominant form of public transport and a critical enabler of employment, entrepreneurship, and economic activity. Drawing on more than a decade of proprietary lender data, high-frequency vehicle GPS records, repeated surveys, and over 100 interviews and focus groups, this report examines how the industry is organised and how its institutional structure shapes performance. Taxi associations govern route access, fares, and local coordination. Owners operate highly leveraged businesses with limited pricing discretion and drivers work under incentive contracts that transfer substantial demand risk to them. These arrangements help explain how financial pressure can translate into aggressive driving, deferred maintenance, arrears, and service instability. The report argues that policy should work with, rather than displace, the industry. It proposes a digitally verified operating subsidy and targeted driver-health interventions, while emphasising the need for piloting, evaluation, accountability, and further research before large-scale implementation.

Keywords: Minibus taxis; public transportation; informal economy; transport finance; small business; South Africa (search for similar items in EconPapers)
JEL-codes: G21 J46 L92 O18 R41 R48 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2026-10
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Published in ERSA Working Paper Series, October 2026, pages 26

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Persistent link: https://EconPapers.repec.org/RePEc:rza:ersawp:407

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