Lessons learnt from informal transport business model improvements in feeder – distributor and line – haul route typology settings in Cape Town and Pretoria South Africa

Abstract

The purpose of this paper is to illustrate how the informal transport business model can be sustainably improved by applying a systemic and collaborative approach involving institutional, private and development sector stakeholders and focussing at the operational level of industry. The paper draws on lessons learnt from two South African informal transport business model improvement pilot projects undertaken in a typical feeder – distributor and a typical line – haul environment. The paper illustrates the importance of a systemic approach focussing on route – typology, vehicle occupancy, operations improvement, and a reduction in the cost of capital. In the feeder- distributor operation the main improvements entailed collectivisation of control over the fleet, drivers and daily fare revenue, as well as shifting from a fill -and -go operation to a scheduled services model. The results achieved with this improvement included; ● rationalisation of the fleet from 78 vehicles to 40 vehicles ● reduction in driver working hours from 12 hours per day to 7.5 hours per day ● a 45% reduction in fuel consumption ● a significant increase in passenger satisfaction (Saddier et al 2019) In the line – haul operation the main improvements entailed collectivisation of the fleet, drivers and daily fare revenue, agreement to shift from cash to a cashless fare system, rationalisation of the mixed occupancy 29 vehicle fleet to a fleet of 20 x 22 -seat vehicles, the establishment of a transport operating company, preparation of a bankable business plan and successful application for short term fleet recapitalisation financing from the Development Bank of Southern Africa. The main conclusions drawn from the two pilot projects are that business model improvements are possible and sustainable, provided that collectivisation of the means of production is undertaken and the cost of capital is reduced.