The taxi Industry and the battle for the last Mile

South Africa’s urban logistics market is becoming more contested, and the latest potential entrant is not a technology company but the country’s minibus taxi industry. The South African National Taxi Council (Santaco) has signalled interest in expanding into food and parcel delivery, a move that would place it in direct competition with established platforms such as Uber and its Uber Eats service, as well as local delivery operator Mr D Food. At first glance, the idea appears unusual. South Africa’s taxi industry is best known for transporting commuters across cities and townships, not for managing logistics chains or on-demand delivery networks. Yet the underlying economics of urban mobility are shifting in ways that make such diversification more plausible. Retail expansion into township economies, the growth of e-commerce, and the steady digitisation of consumer services are all reshaping demand for last-mile delivery. As passenger transport patterns evolve, operators with extensive urban reach are beginning to reassess how that infrastructure can be monetised. For Santaco, the argument is straightforward. Minibus taxis already operate dense and flexible transport networks across urban and peri-urban areas. In theory, these routes could be adapted for parcel and food delivery, extending revenue opportunities beyond passenger transport. The challenge lies in execution. Modern delivery platforms depend on tightly integrated digital systems that coordinate demand, pricing, routing and customer experience in real time. Firms such as Uber and Mr D have spent years refining these systems, alongside large-scale merchant networks and embedded payment infrastructure. By contrast, South Africa’s taxi industry remains structurally fragmented. While it plays a central role in urban mobility, coordination is often localised, and operational standardisation varies significantly across regions. Translating this structure into a unified logistics platform would require not only investment in technology, but also a degree of organisational consolidation that has historically proven difficult. The competitive environment is also becoming more entrenched. Uber has steadily expanded its South African footprint, investing in both ride-hailing and delivery services as part of a broader effort to build a multi-layered mobility ecosystem. Mr D, meanwhile, has strengthened its position through retail partnerships and deep integration into the country’s food and grocery supply chains. These incumbents benefit from scale, data-driven logistics optimisation, and established consumer trust—advantages that are difficult to replicate without sustained capital and technological capability. Still, Santaco’s interest reflects a broader global trend. In many cities, the distinction between passenger transport and goods delivery is increasingly blurred. Mobility platforms are converging into logistics networks, and traditional transport operators are under pressure to adapt their business models accordingly. South Africa’s taxi industry occupies a particularly important position within this transition. It remains the dominant form of public transport in many communities, especially in township and peri-urban areas that are often underserved by formal logistics providers. This geographic reach represents a potential advantage in last-mile delivery—if it can be operationalised effectively. Yet reach alone is not sufficient. Delivery ecosystems rely on consistency, system integration and service reliability at scale. Without these, network density does not translate into competitive capability. Whether the taxi industry can evolve from a decentralised transport system into a coordinated logistics operator remains uncertain. But the interest in doing so highlights a wider shift in South Africa’s urban economy: competition for the last mile is no longer confined to technology firms. It is becoming a contest over who controls the physical infrastructure of everyday economic life.