The introduction of new laws to curb unregulated taxi clubs in Victoria will be ineffective, according to Taxicare Australia’s MD George Karas.
In response to a report by the Taxi Services Commission (TSC) on the impact of taxi industry legislation by the Napthine government, Mr Karas has said that taxi operators join clubs which offer a “veneer of proper insurance”, but the cover is often worthless.
In the event of accidents, Mr Karas says the clubs – which proliferate in Victoria – and which offer cheap insurance cover, often avoid paying claims by charging exorbitant excesses to dissuade the insured cabbie from pursuing the claim.
Subsequently, up to 70 per cent of Victoria’s taxis are thought to be operating without effective third-party property damage insurance.
Last month the TSC released a regulatory impact statement on the effects of new laws designed to improve customer service and competition in Victoria’s taxi industry.
In his response to the statement last week, Mr Karas said the new laws will have little impact on unregulated taxiclubs who offer seemingly attractive, but ineffective insurance cover.
New legislation introduced by the TSC will require all operators to have third-party cover but Mr Karas says the move in itself will not improve the situation.
“As it stands, the impact of the new law – in terms of ensuring all taxis are properly insured in Victoria – will achieve very little,” Mr Karas told Neos Kosmos.
“What will continue to happen is that in practical terms, the insurance cover offered is in name only, because of huge excesses in the small print of contract – often in the tens of thousands of dollars.
“Such policies give unregulated, unlicensed taxi clubs in Victoria the veneer of supplying third-party damage insurance, where in reality few such claims are ever pursued or paid.”
Mr Karas said the TSC should come to an arrangement with general insurers to cap excesses.
“Then the problem will be solved for both driver and operator and there would be no middleman, if that was put into effect.”
