The business model for the Cape Town Integrated Rapid Transit System is based on successful models used by Bus Rapid Transit systems worldwide. Central to this model is a public-private partnership (PPP) in which most operational components are delivered through the private sector but with the municipality responsible for oversight and quality control.

In this model private operators provide the day-to-day delivery of public transport services through a concession contract. Especially important is the full participation of the existing bus and minibus operators. Operators are compensated on the basis of pre-determined vehicle-kilometres and a range of performance-based indicators. Instead of operating only when it is profitable to do so (mainly in peak hours) and completing journeys as quickly as possible to move as many people as possible, the incentive is to offer a quality service according to a strict schedule with electronic monitoring of where each vehicle is along the route.

By law in South Africa, as in most countries, no public transport services may operate without government authority in the form of a permit, a licence or a contract. A process of formalizing and integrating public transport is currently underway, initiated in the mid 1990s. However, the strategy is clear – in future public transport services will be publicly managed and will be permitted where there is demand for them and in a manner that is lawful and regulated.

When the public authority, in this case, the City of Cape Town, establishes an integrated rapid transit system, it seeks private-sector partners to operate the system. The ideal is for the existing bus and minibus operators to fully participate in the transformation process. The City of Cape Town is currently undertaking consultations with the industry to form a partnership for quality public transport. Not only is the new system likely to be profitable for the operators, but those employed in the industry will benefit from formal salaries, health and pension benefits, and an improved work environment.

Consultations with the transport operating industry are not only taking place in Cape Town but also in cities with similar projects, including Johannesburg, Port Elizabeth, and Tshwane.

The City of Cape Town will also be giving communities in the initial Phase 1 areas an opportunity to give their input into how the new system should be designed and operated.