Drivers and consumers are the big winners from the government’s response to the Victorian Taxi Inquiry, but old license holders won’t be happy.
The Victorian government has approved most of the 139 recommendations Professor Allan Fels made 18 months ago, designed to “move toward effective self-regulation and to improve the quality of taxi and hire car services for consumers”.
The most contentious proposal that was met with months of lobbying from licence owners has remained in part. Licences will now be reduced to $22,000 yearly at the consumer price index minus 0.5 per cent for metropolitan taxi services.
Those who hold Greater Melbourne Taxi Licence Release licences will not have to pay the yearly licence fee for 12 years.
A new Taxi Services Commission will monitor who receives a new licence and how many they will allocate.
The new measures are designed to open up the taxi field to more investors, thereby putting more taxis on the road while creating more competition and therefore better service to customers.
Licence holders who bought their licences recently for close to $500,000 will see their investment de-valued if the commission chooses to flood the market with lots of licences.
The government upped the recommended licence fee by just $2,000 to “provide some additional assistance to current licence holders”.
Taxi Industry Stakeholders Victoria (TISV) spokesperson and owner of Taxilink Harry Katsiabanis says their lobbying fell on deaf ears.
“We were screaming for reform, but we wanted the right reform that would make a sustainable industry,” he told Neos Kosmos.
He is now concerned with the new commission’s role in licence approvals.
“My biggest concern is that the government will release an unlimited amount of licenses and will review it later once they think the market has stagnated,” he says.
“Once you dilute that market size by more taxis, at the end of the day it just means less revenue per car.”
Time will tell if the commission will be of real use to the industry. Starting on July 1 this year, the commission will be headed by Australian Competition and Consumer Commission chair Graeme Samuel and will act in many ways to reduce red tape and regulate an industry that’s been left untouched for years.
Not-for-profit taxi insurance company Taxicare thinks increasing competition isn’t going to make services better.
“The fact that more taxis will be on the road doesn’t necessarily mean that drivers will be better qualified or the public be served any better,” CEO George Karayianidis says.
The reforms have aimed to better educate drivers and promote better standards.
Drivers now will be better renumerated, with either a 55 per cent take each fare or a specific hourly payment plan based on a new minimum wage sum.
A new independent and comprehensive exam for new taxi drivers will aim to give an industry standard knowledge base while promoting good behaviour.
Credit card fees have also halved, with the government reducing the 10 per cent fee to five in a bid to make fares cheaper.
The disabled will benefit greatly from new driver training and subsidies for wheelchair accessible taxis (WAT). More incentives will be given to licence holders who convert their cars to WATs, while a central booking service just for WATs will help people with a disability get better, quicker service.
Shared rides, discounted fares and set-route services will also make their mark in the coming months, while discussions with Melbourne Airport will look to provide better services to customers and drivers looking for specific fares.
Country taxis are big winners too, with cheaper fares and flexible services making it through the recommendations.
Public Transport Minister Terry Mulder says “the demand for services in regional areas far outweighs the supply of taxis and hire cars”.
Country taxis will be better integrated to coincide with public and community transport, and taxi-bus services and share rides will be vital for cheaper fares.
Country taxis will be exempt from the yellow taxi rule and will be able to carry advertising on their vehicles.
The Victorian Government Response to the Taxi Industry Inquiry is available to download at www.taxi.vic.gov.au