Taxi reform shouldn’t be squibbed – by all parties.

The Baillieu government is apparently going to release the final report of the Victorian Taxi Inquiry.

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.

This entry was posted in Economics, politics and tagged , , , , , . Bookmark the permalink.

4 Responses to Taxi reform shouldn’t be squibbed – by all parties.

  1. Bipartisan support on this would be an absolute dream.

    As I think you have mentioned Andrews seems policy driven and pragmatic so hopefully he gets behind positive reform.

    The biggest question is really whether Baillieu has the balls…

  2. wilful says:

    Daniel Andrews hasn’t shown a reflexive partisan just say no instinct so far. An ineffective politician, clearly.

    I hopped in a taxi on a Saturday night a few months ago, and the driver (older white owner-driver) proved very knowledgeable and opinionated about the subject. Spurred me on to making a submission.

    The policy direction hardly needs comment. It is exactly the moderate unexciting and obvious stuff that you should expect to happen, incremental improvement FTW!

  3. This will be an interesting test of nerve for both parties.

    I’m sure there’s hacks doing sums in party head offices of what donations will be lost if they back the reforms, or even more temptingly what can be made by supporting the status quo if the other party supports reform.

    Prepare for a lot of images on the news of 60+ year old Immigrant owner-drivers explaining how the reforms will wipe out their life’s work (even though these are a minority of licencees). The media loves that stuff.

  4. BilB says:

    Having just spent a few days in Melbourne for My daughter’s graduation I have a few comments to make about this from the user’s point of view. For starters I don’t catch cabs because they are too expensive, and where I would like to use them the cabs will not do the short run that would suit my purposes. Cabs want long runs no doubt because their overheads are too high. I do like the cab colours, the best that I have seen anywhere, and the Prius cabs look the best of all.

    I used the trams extensively, and herein is the reason for this comment. The ne MiKi system has some major failings. I imagine that the functional software for the system is excellent, however the user interface software totally sucks. The industrial designers have also fallen short of success with their physical design which leaves the user unsure where to place the card. The software guys obviously know nothing about cognitive ergonomics as the operating cycle is a total mystery to the user and the device fails to give adequate confirmation that the card has been read. the units are fitted at about waste height and the text on the screen is about 14 point. Far too small to be read by anyone over 40. Then the content of the successful read message is a total screw up as it says “READ ON SUCCESSFUL”, far too similar to “READ UN SUCCESSFUL”. Blind Freddie should be able to use these things with confidence. I gave up worrying. I poked my card at it and didn’t look back. Goodness knows if any fares were ever paid.

    On the other hand the Tram Finder App is brilliant, once I realised that I had to re boot my phone to make it work.

    I do really like Melbourne. It is a fun city.

Comments are closed.