Cab call

Getting under the bonnet of the taxi industry inquiry

In March last year, the Victorian Government initiated a year-long independent inquiry into the Victorian taxi and car hire industry, to consider implementing major revisions and improvements into the often maligned industry.

As the deadline date draws near and the inquiry comes closer to presenting a report to government for changes, the industry, many Greek-Australian stakeholders are looking forward to knowing the outcome. Neos Kosmos speaks to two directors of taxi operating companies on how the changes will affect the stakeholders, including consumers and those working on the industry’s frontlines, the drivers. According to official figures from the industry inquiry, consumer satisfaction levels have been consistently low, standing at around 54 per cent in March 2011. Some of the most common complaints include the drivers’ lack of knowledge of routes, availability of taxis on the streets, personal safety, and lack of willingness to take on passengers travelling short distances.

The government has already suggested changes to be made, including proposals to deregulate taxi licences, capping assignment rentals and releasing taxi licences. Those who will be directly affected by changes to the industry will be its three key players: the drivers, commonly new overseas students and migrants; the operators, businesses who rent their fleet to the drivers; and the licence holders, those who own the rights that allow a taxi to operate on the streets. Previously many drivers, including many Greek migrants, were also the owners of their own licence.

However, after a partial deregulation in 1989, today anyone, not just current and former drivers as it was previously, can own licences. Harry Katsiabanis, the CEO of Melbourne’s largest fleet operator Taxi Link, has been working with other taxi operators to put forward submissions for suggestions to the industry inquiry. While he acknowledges that the industry needs improvements, he disagrees with the way the government is going about it, claiming it puts the livelihoods of licence holders and taxi drivers at risk.

“Many taxi licence holders are Greek migrants who were once taxi drivers themselves and are not renting out their licences as a financial investment. It has become their superannuation, their pension,” he says. Mr Katsiabanis, who himself started out as a taxi driver in 1988, claims that current attitudes in the inquiry portray licence holders in a negative light.

“The inquiry is fixated on the value of taxi licences; it is my opinion that the industry issues are not as vast as has been communicated.” Meanwhile, the inquiry chairman Professor Allan Fels have publicly stated that treating taxi licences as a valuable financial investment rather than a licence to provide a service, creating the potential for licence holders to make money while taxi drivers continue to be poorly paid.

According to the Victorian Taxi Association, drivers are currently being paid as little as $8 per hour, far below the minimum wage level. John Vlassopoulos, director of operator Ambassador Taxis explained that taxi drivers are essentially self-employed and take 50 per cent of their earnings from their 10-hour shifts. However, Mr Vlassopoulos said drivers can have up to 75 per cent idle time during their shifts.

“Current potential earnings of taxi drivers stand at 80 cent per kilometre plus gratuities. A taxi can earn $40-80 per hour if you’re on the freeway or making long journeys to the airport and the like. However, in reality many drivers are earning between $10-16 per hour due to inability to take on customers.

“In Singapore, where Harry [Katsiabanis] and I went to for research, the maximum utilization rate for taxis is 80 per cent, so they are rarely idle and taxi drivers are earning as much as three times the amount drivers are earning here,” he says. He explains that the disparity between idle hours and consumer complaints of a lack of cabs on the roads during busy times, creates an impression that there are not enough cabs on the roads, when, in fact, drivers are in the wrong place at the wrong time. “We also get complaints of some drivers refusing to travel short distances where they won’t get the $70-80 fares they can get if they’re travelling to or from the airport, for example,” he says. Mr Katsiabanis suggests part of the solution is to train drivers better.

“At the moment, drivers do 97 hours of training in a classroom, but training should be hands on. It should be 10 – 15 hours of training in a classroom and the rest on the road, so that drivers, especially those from overseas, can become familiar with the roads,” he says. In his submission to the inquiry, Mr Katsiabanis says that the government’s plan to deregulate the industry will allow more taxis to enter the market. While the government hopes to do this to increase competition and therefore lower prices to attract consumers, taxi operators like Mr Katsiabanis and Mr Vlassopoulos are worried it could result in an influx of new fleet, driving up prices as operators struggle to cover running fees.

The inquiry report to government is due to be released mid-year, with Professor Allan Fels calling more submissions be made from taxi licence holders so their voices can be heard. “The Inquiry has been running for eight months and we are disappointed with the low participation levels so far from taxi licence holders.” “I strongly encourage everyone who has a stake in the taxi industry to provide their feedback to the inquiry now, before any decisions are made.”