Improving the Standard Owner Target Paratransit Business Model in South Africa
Written by Naidine Daniels
The paratransit (minibus taxi) sector provides up to 65% of commuters in the main South African cities with reliable and affordable public transport. The sector forms the backbone of the informal economy in urban settings and provides job opportunities to many who have difficulty accessing the formal job market. Most governments in the developing world do not know how to engage the paratransit sector effectively and tend to adopt policy approaches that seeks to replace the paratransit supply model with higher occupancy commuter buses, or Bus Rapid Transit (BRT) systems. This approach is often met with open or below the radar resistance from paratransit operators resulting in costly plans battling to get out of the starting blocks.
In pursuit of a more harmonious approach to the improvement of its urban mobility system, the City of Cape Town in 2017 commissioned a pilot project aimed at improving the paratransit supply model to fulfil a complementary feeder–distributor role in respect of the planned further roll out of the city’s BRT system.
Improving the Standard Owner – Target Business Model
Minibus taxis normally operate on a ‘’fill-and -go’’ system. This means they will generally depart from fixed terminals once fully loaded and will stop anywhere along their route to drop off and pick up passengers. The business improvement project entailed the introduction of a scheduled service, supported by a shift from the typical daily owner-target or driver-commission earnings model, to the pooling and reallocation of daily revenue in accordance with an agreed to earnings model for both owners and drivers. The business improvement model further entailed the introduction of proper conditions of service for drivers and support staff and the overall professionalisation of the public transport service offered by the paratransit association.
The project resulted in the following improvements:
- Reduction of the associations’ fleet size from 78 minibus taxis to 40;
- Expansion of the number of routes serviced in its area of operation from 3 to 5 (bringing the service closer to the passenger);
- Reduction in driver working hours from 12 to 7,5 per day;
- Reduction in fuel consumption by an average of 45% per month, and
- an overall passenger satisfaction rating of 95%.
Applying the Transformative / Transactional Framework in an Informal Business Environment
The Burke-Litwin model establishes the link between performance and the internal and external factors affecting performance. In this article we reflect on the key organisational and key environmental factors that were impacted due to the introduction of the new business model, and how these factors lead to successful change.
The basic premise of the Burke – Litwin model is that:
- The external environment compels an organisation to change its mission, culture, leadership and operating strategies;
- All affecting factors put together affect the motivation level of the individuals in an organisation and this in turn impacts the overall performance.
What did we learn?
The success of this business improvement process had more to do with the role of a credible and visionary leadership group than with operational and technology changes.
ODA managed the taxi business improvement project from October 2017 – June 2019. At the time of writing this article the improved business model had been in operation for just over 12-months.
This article is based on the author’s experience working as a consultant on the paratransit business improvement project in Cape Town, South Africa from October 2017 – June 2019.