CEO ARTICLE

Feb 01 2016

Much has been said and written about the Victorian taxi industry over the past months and over the Christmas break. We continue to see opinion pieces that purport to represent the views of the Victorian taxi industry and the industry more generally. Unfortunately these commentators and competitors like to premise their arguments on outdated assumptions. While these assumptions may help support their particular argument, they do not represent the true position of the taxi industry in this State. The record must be set straight so a meaningful discussion can be held about a way forward.

The Victorian Taxi Association (VTA) recognises the need for systemic industry change, change that has the potential to transform the commercial passenger vehicle industry. We see such changes as necessary to ensure that the industry can meet the changing needs and expectations of our passengers and the broader community. While we recognise that change is necessary, we believe that the current regulatory settings impede and restrict the ability of the businesses that make up our industry to achieve this. 

The VTA’s view is underpinned by the notion that regulation should address clearly identified market failures. It should not, in a competitive market, attempt to address service standards and other aspects of the service via prescriptive regulation. Regulation should be outcome focused and allow sufficient room for businesses to innovate. There can be little doubt that recent events have meant that the taxi industry is now operating in a genuinely competitive market. If companies and individuals fail to provide a level of service expected of them their brand will suffer and the reputational consequences will see passengers seek alternatives.

Customers should have the opportunity to benefit from innovation and technological change, so too should service providers.  It is no longer sustainable for providers to operate under prescriptive government regulation which is unable to keep pace with these changes, whilst competitors derive significant commercial advantage by operating outside the law. Importantly, this should not be taken to mean regulatory objectives such as providing a safe and secure service are disregarded – rather, more room should be allowed for businesses to find ways to achieve these objectives themselves. Replacing prescriptive regulation with outcome focused regulation would help achieve this.

Any such change needs to span the entire commercial passenger vehicle market in recognition of the fact that technology has blurred the lines between different services types. Arguments by companies like Uber that they should be able to operate as they please while other service providers remain heavily regulated are nothing more than an attempt to inhibit competition.

The VTA, and the taxi industry more broadly, want to see a set of regulations designed to achieve a modern market which is genuinely competitive and addresses concerns for passenger and driver safety using modern technology. A more flexible regulatory approach would reduce the operating costs of traditional service types and create a fair and equal platform on which all providers of commercial passenger vehicle services can effectively compete for the customer.

In order to achieve this, laws and regulations as they apply to things such as licensing, driver accreditation and management and fare regulation need to be overhauled. Current regulations do provide protections for consumers, but consumers are demanding more competition and the rules must be changed to reflect this. We know the Andrews Government are carefully considering these issues and we remain committed to working with them. They are taking a less reactionary and more considered approach than some of their counterparts. Those that want immediate change without proper consideration only pursue this out of self-interest. While change needs to occur as soon as practicable, it needs to be well thought through. The last thing customers need is a set of changes that need to be reviewed again in 12 months.

The taxi industry is ready to go toe-to-toe with our competitors, we now need the redundant regulation removed to allow us to do so – let’s get it right this time. 

David Samuel
Chief Executive Officer

Next article