Ride sharing company Uber has finally been legalised in Victoria, however taxpayers and users of taxis, hire-cars and Uber passengers will fund a $375 million compensation package for existing owners of taxi licences.
Similar transitional assistance packages in NSW and Queensland are providing a one-off payment of $20,000 per licence. Other reforms announced in Queensland include the waiving for 12 months of the licence renewal fee and abolition of the maximum age limit for taxi vehicles.
But in Victoria, for the next eight years (starting in 2018), users of Uber, taxis and hire cars will pay a fixed $2 per trip fee to pay for the Government’s buy-back of taxi licences and fund other reforms of the industry (a total of $450 million).
Victorian Premier Daniel Andrews says it is appropriate for owners of taxi licences to receive compensation and ultimately a level playing field will ensure there are adequate safeguards for all industry stakeholders.
However the taxi industry is far from happy with the amounts being offered - $100,000 for one licence and $50,000 for the second licence - but if you own more than two licences there is no further compensation beyond $150,000.
Mind you this news has staggered taxi operators in NSW where taxi licences are priced the same as Victoria (as high as $450,000 a few years ago). NSW cab owners will receive just $20,000 per licence.
TMR’s taxi contact in NSW did report that over the years, owners of licences have enjoyed good returns on their investment – around 7.0-8.0 per-cent.
In opening-up the industry, the Victorian Government says from 2018 taxi fares will be deregulated and operators will be able to set their own fares.
Currently Uber operators are not required to fit cameras into their cars but under the new system only cars fitted with cameras will be authorised to pick-up from taxi ranks.
As well, all drivers will be required to submit to checks of criminal records and driving history.
All-up, the consensus view is that ultimately some improvements (for both operators and passengers) will flow from the reforms.
For example, London Taxi Australia is planning a fleet of 200 of London’s famous black cabs for Melbourne (following a successful 2014 trial) which could ease the traditional shortage of vehicles on Friday and Saturday nights.
The freeze on issuing of new licences will allow the industry to stabilise during the reform process.
And traditional taxi companies in NSW are following the lead of Uber in allowing customers to pay on-line prior to their journey rather than using a credit card or cash in the cab.
However a challenge may be looming for Uber’s simplified corporate approach with reports in North America of Uber drivers planning to establish a trade union so they can receive benefits like sick leave and holiday entitlements.