The draft report runs to almost 1000 pages, but the short version is that the current industry structure benefits nobody except the owners of an artificially limited supply of “taxi plates” – which now trade for over half a million dollars – and various middlemen such as CabCharge. Drivers – many of them international students struggling to support themselves – are paid very low wages. Customers – us – pay far more than the going rate in cities acro+ss the world, are often faced with cabbies who don’t know the city very well, and because of anomalies in the fixed fare structure drivers sometimes won’t take people for short trips.
While the final recommendations are still under wraps, obviously, the draft report recommended a gradual freeing up of the industry. The distorting effect of the taxi plate was to be gradually eliminated, by making an unlimited number available for a fixed fee of $20,000 per year. Fare regulation was to remain, but as a maximum fare rather than a fixed fee. Drivers would be required to pass an exam before driving. CabCharge’s tranaction fee on credit card transactions was to be halved. The driver’s cut of the takings from driving is to be increased. It’s not open slather, but it pushes the industry in the right direction. Better taxis, with more highly trained drivers getting better pay and conditions, at lower prices.
It’s worth noting, at this point, the potential benefits of taxis being available at something closer to their real price. Those without access to a car – the elderly, the young – are much freer to travel. Those who shouldn’t be driving have less of a financial incentive to do so. Environmentally, more taxis are probably a net win, too, particularly if dedicated cabs use hybrid technology, which doesn’t make financial sense for most private motorists but is a big financial wins for cabs. More importantly, however, more people are likely to give up cars if taxi costs are lower.
While there there are undoubtedly points to quibble with in the final recommendations, the broad thrust of the reforms should be supported – and if existing plate owners are to be compensated, it should be done by compensating them once and for all rather than perpetuating a ridiculously inefficient industry structure. But given the tightness of the current parliament, if the Labor Opposition (or, to some extent, the Greens) oppose the reforms it might scare this not particularly brave government off.
Daniel Andrews, or shadow Transport Minister Fiona Richardson, haven’t yet put their views on the recommendations on the record. In my view, if the Baillieu government comes up with a sensible reforms package broadly along the lines of the draft recommendations, Labor and the Greens should support it, and treat the self-interested pleading of the taxi middlemen as the self-interested pleading that it is. Victoria will be better off for it.