The white taxis you’ve been seeing around Cairo’s streets lately aren’t part of a new fleet of luxurious private cars.
Sparkling new and styled with a line of checkered black and white boxes, they feature working meters, air-conditioning and sometimes even have flashy adverts – and they’re fast replacing the iconic black-and white Fiats and Peugeots that once ferried customers around the city, many of which are decades old.
When the taxi replacement program was first introduced, drivers were wary of the added financial burden of buying a new car and complained that they were bearing the brunt of the government’s program.
For their part, officials hailed the move as a way to get rid of the pollution-emitting vehicles and give Cairo’s streets a bit of a makeover.
The new taxis are part of a government-sponsored program helping to implement part of last year’s traffic law, which prohibits owners of vehicles manufactured more than 20 years ago from renewing their car licenses.
Practically, this meant that drivers of older taxis would either be forced to drive illegally, or to purchase a new car. This presented a daunting dilemma and a potential loss of livelihood.
In response, the government partnered with local banks and automotive companies to provide drivers with a viable route for replacing their old cars with more up-to-date models.
As more time passes, it seems that the wariness is wearing off as more drivers get on board the program, and according to what one driver told Daily News Egypt, it’s proving to be more profitable than expected.
Logistics and financing
Officially launched in April 2009, the program gives drivers the option of five different models from Lada, Peugeot, Speranza, and the Hyundai Verna and Chevrolet Lanos.
Each model had to be made in Egypt, and was selected by the car company for fuel efficiency, spaciousness and durability, and provided to the program at competitive prices.
The monthly payments on the different models range from LE 390 for the Lada to LE 1,200 for the Peugeot, with the others coming in at between LE 550 and LE 750 monthly.
The cars are financed through an LE 5,000 compensation check for the old vehicle and by five-year government-subsidized loans at Ahli United Bank, Banque Misr and Bank of Alexandria. The cars are exempted from customs and sales tax, and drivers also have the option of placing advertisements on their vehicles, which allows them to earn LE 600 monthly towards their car payment.
About 35,000 car owners will eligible for the program over the next two years, with the possibility of it being extended to include 70,000 more vehicles later on.
So far, the Chevrolet Lanos is enjoying the largest market share in the program.
“The Lanos is the right product for this program in terms of vehicle size, fuel consumption, efficiency and cost of ownership, service and parts; it is very competitive compared to other models in the program, explained Muneer Alhasan, director of sales and marketing at General Motors Egypt.
Rajeev Chaba, chairman and managing director at General Motors Egypt, added that warranty on the Lanos, three years or 100,000 km, is one of the best in the market, and that spare parts and service for the model are cheap and readily available.
“We understand that availability of service and parts is a big concern for taxi drivers, because if there is a problem they need to repair it quickly to minimize loss of income, he said.
The success of the Lanos in the program has promoted General Motors to implement plans to expand production capacity threefold to meet the demand from this new customer base.
Promotional campaign
To promote the program and correct negative misconceptions, the government and its partners launched an aggressive advertising campaign on radio, television and in print media to reach drivers and educate them about the benefits of the program.
Additionally, special sales teams were trained at the banks and car dealerships to address the specific concerns of this segment of customers, most of whom had never worked with a bank or entered a car dealership.
A program-specific showroom was also set up on the Cairo-Alexandria Desert Road where the drivers could go to learn more about the program and compare models.
All of these tactics have helped the program move forward steadily, and for the drivers themselves, initial apprehension has abated as the program has proved both beneficial and easy to navigate
Alaa Gamal, a taxi driver who recently traded in his 35-year-old taxi for a brand new Peugeot, sees the program as the answer to his long-standing goal of buying a new taxi.
“I had been wanting to buy a new car for several years and had been pooling money with friends to try and raise the necessary amount, but it was difficult. When this opportunity came along I felt that it was a gift from God, he said.
Despite the usual chaos surrounding government bureaucracy, Gamal described the process of trading in his old taxi and obtaining the new one as simple and easy.
“I saw the announcement made by the Minister of Transportation on [television], and I went to Ahli Bank the next day to inquire about the program. Within a month I had traded in my old taxi and gotten the LE 5,000 compensation, and was driving a new car, he said.
While his brother chose the Lada model for its low monthly payment, Gamal opted for the Peugeot for its longevity.
“My old taxi was a Peugeot and was still running after 35 years, so I know that it is a good brand that will last a lifetime. The payments may be higher than the other brands, but its worth it to me to have a reliable car, he said.
Despite the financial burden of car payments, Gamal is optimistic that the features of the new car will attract more customers.
“The new car is clean and comfortable, so I think people would prefer to choose it over other taxis in the street. I have even gotten some regular customers that call me because they like the new taxi. Having the meter also helps because it minimizes conflict over fares and makes the process more official and fair, he said.
His only worry is that the public doesn’t realize that his taxi is a normal one and not from an expensive private company.
“Some people aren’t familiar with the new taxis and think they are more expensive, but hopefully they will realize that they are just replacing the old taxis, and that they can get a better value in a comfortable car with a meter, he said.
