Africa-Press – South-Africa. Combined Motor Holdings (CMH) has recently announced a sharp decline in taxi sales in South Africa over the past year.
This is primarily attributed to the pullback of SA Taxi Finance following allegations of fraud within the ranks of operators and mounting bad debts.
The company stated in its 2025 Integrated Annual Report that this has prompted the principal motor finance houses to reduce funding, resulting in sales declines of up to 80%.
SA Taxi provides finance and insurance to small and medium enterprises (SMEs) operating minibus taxis in South Africa. It was founded in 1996 and now has more than 860 employees.
The company operates in a highly underserved segment of the market, with unique finance and insurance needs.
“We focus exclusively on empowering SMEs in the taxi industry. Of the estimated 250,000 taxis on the roads in South Africa, SA Taxi finances more than 28,000,” the company’s website states.
For years, SA Taxi was owned by Transaction Capital, which also owned WeBuyCars before it was spun off and listed separately in 2024.
SA Taxi was a significant drag on Transaction Capital’s finances, recording substantial losses year after year.
In its 2023 financial year, Transaction Capital swung from a profit to a loss, which was primarily the result of SA Taxi’s mounting troubles.
In that year, SA Taxi reported a 1,100% decline from a net profit of R365 million to a net loss of R3.8 billion. Transaction Capital said that the effects of Covid-19 had severely impacted SA Taxi’s business model.
The company initially expected SA Taxi to rebound, but it had to restructure client debt accounts continuously, mainly by extending their repayment periods.
In addition, client repayment behaviour had also deteriorated in the company’s non-performing loans book, requiring the company to increase its loan recovery efforts.
SA Taxi sold
While Transaction Capital initially considered selling its taxi refurbishment company due to lower refurbishment volumes, it changed its mind.
Chief Investment Officer Mark Herskovits said at the time that the revised plan only to sell second-hand taxis made it unfeasible to sell its refurbishment business.
He said SA Taxi would focus on righting past wrongs and that investors shouldn’t expect the company to be turned around immediately.
Despite all the plans and the turnaround strategy, SA Taxi’s balance sheet continued to significantly deteriorate.
In September 2024, Transaction Capital finally pulled the trigger. It announced the sale of its stake in SA Taxi to the management subsidiary Mobalyz and the family trust of former RMB CIO Martin Oberholster.
The company also announced that the conclusion of its turnaround strategy will be marked by “Transaction Capital ceasing to exist in its current form.”
Nutun, the first-listed global specialist business process outsourcing business on the JSE, replaced Transaction Capital.
“While much has been achieved in the first year of this two-year process, the disappointing 2024 results are reflective of the fact that the transition is not yet complete,” the company said.
Transaction Capital was a majority shareholder in Mobalyz. SA Taxi’s sale, which saw Mobalyz acquire a substantial portion of equity from Transaction Capital, structured Mobalyz as a private company.
Mobalyz operates through three divisions – SA Taxi, Mobalyz-as-a-Service (Maas), and Gomo, which provides vehicle financing and insurance to consumers.
“SA Taxi is obviously very special to us and it’s all hands-on deck to stabilise the business because we appreciate its strategic importance to the country’s public transport sector and economy,” Mobalyz CEO Sean Doherty said.
“Mobalyz is not a rebranding of SA Taxi. Mobalyz at its core is three businesses, SA Taxi and two innovative solutions in Gomo and MaaS, with incredibly high growth potential.”
After the sale of SA Taxi, Mobalyz underwent a restructuring, which involved reshaping the company’s balance sheet to secure long-term liquidity.
Doherty told IOL Business Report that he is confident about the future of the business following Mobalyz’s restructuring.
However, he noted that progress in securing innovative funding solutions to maintain SA Taxi’s sustainability remains a priority.
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