Insights

In brief – Issuing of new licences to be subject to a consumer interest test

The final report of the Taxi Industry Inquiry, Final report: Customers First - Service, Safety, Choice has made 139 recommendations to the government, including the establishment of the Taxi Services Commission, which will have powers to reform the industry and the taxi licensing system.

Government announces support for inquiry’s recommendations

On 28 May the Premier of Victoria Denis Napthine and Minister for Public Transport Terry Mulder announced government support for the majority of the recommendations of the Taxi Industry Inquiry.

The Taxi Industry Inquiry was established in March 2011 with a view to achieving substantial reform of the taxi and hire car industry. The independent inquiry was headed by Professor Allan Fels and Dr David Cousins AM and in its final report made 139 recommendations to the government.

New Taxi Services Commission to consider impact of new licences

The key recommendations include the establishment of the Taxi Services Commission, to be headed by former ACCC Chairman Graeme Samuel, to operate as a statutory authority with powers to reform the industry.

The government has indicated that the issue of new licences will be subject to a "consumer interest test" under which the Taxi Services Commission will consider the impact of licence issues on consumers. The taxi licensing system will be reformed to introduce annual prices for licences which will be indexed for inflation. Prices will be set at levels that will relieve pressures on overheads and fares whilst also mitigating the reduction of licence values for existing licence holders.

It is intended to remove restrictions on the number of new taxi licences issued, with the Taxi Services Commission monitoring the impact of the issue of new licences.

Hire car red tape to be cut and taxi drivers required to pass exam

The system will also remove restrictions and red tape on pre booked hire car services to enable a more diverse range of services to be provided.

Taxi drivers will be required to pass an independent examination called the "Greater Melbourne Knowledge" before accreditation.

Reforms to make taxi industry more disability friendly

It is hoped that reform of the industry will also provide better services for people with disability, through both driver training and encouraging more accessible vehicles. An amended fare structure will aim to improve affordability and help address issues such as cab shortages, long waiting times, short trip refusal and airport overcrowding.

It is fair to say that the reforms have not been universally received with enthusiasm and there has already been some industrial action from the industry in response to the proposed reforms.

Reforms aim to give taxi drivers better pay and conditions

Nevertheless it is hoped that over time, customers will see the benefits of the reforms being instituted and that taxi drivers will also see better pay and conditions as they are to be provided with a guaranteed 55% of takings, which is an increase on the current pay for drivers.

It is acknowledged by the government that the legislation to implement the proposed changes will take some time to develop and will involve a Regulatory Impact Statement providing for public consultation and a cost benefit analysis.

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