On 18 December 2015 the NSW Government announced its decision to reform the Point to Point Transport Sector, including the NSW Taxi Industry and the regulation of ridesharing services.
The announcement by the NSW Government was made in response to a review into the Point to Point Transport Sector by a specially appointed Taskforce headed up by Professor Gary Sturgess, AM.
The extent and the timing of these reform measures came as a shock to the NSW Taxi Industry; the reforms are profound and they will have long lasting impacts on the industry and how it operates into the future. There are high levels of concern from our members about what these reforms will mean in practical sense terms and what impact they will have on the livelihoods on the many thousands of taxi licence owners in NSW.
Key outcomes of the Point to Point Transport reform include:
- the legalisation of ridesharing (notably Uber),
- rank and hail hirings being preserved for taxis for key safety reasons,
- no new taxi licences in NSW for at least 4 years,
- deregulation of fares for pre-booked taxis and greater price flexibility for rank and hail services,
- unlimited supply of pre-booked services (rideshare and hire cars),
- removal of a significant number of quality related regulations.
The NSW Government has also announced a compensation package of $254 million to address financial loss over the last 12 months and to provide support for hardship cases. The NSW Taxi Council will play a key role in representing the NSW Taxi Industry in the proposed Compensation Panel process.
The NSW Taxi Council has responded to the announcement by the NSW Government by highlighting the significant concerns of our members and negotiating to address the structural inequities that continue exist between the NSW Taxi Industry and the pre-booked sector. The reforms have not achieved a genuine level playing field in terms of competition and the NSW Taxi Council is negotiating with the NSW Government to address these critical anomalies.
These issues include (but are not limited to):
- compulsory third party insurance,
- industrial relations,
- competition law issues,
- licence fees,
- compliance for rank & hail hirings.
The NSW Taxi Council has also highlighted concerns around the viability of country taxi services. Rank and hail hirings only constitute a small minority of bookings for country taxis and other measures are required to ensure that country services are not exposed to unfair competition from pre-booked operators who now have significant advantages in relation to fixed and variable costs over taxi operators.
The NSW Taxi Council is meeting regularly with the NSW Government to address the above issues and to also negotiate a better compensation package for its members. Although the reforms have not removed the property rights of licence owners and a taxi licence will continue to yield a return, the reforms have substantially increased the competitive environment in the Point to Point Transport sector which will result in a new equilibrium for taxi licences being created in the market. The full impacts of the reforms are therefore yet to be felt, however it is clear more compensation will be required to help the industry structurally adjust to this new environment.
We therefore strongly believe there needs to be greater capacity in the Government’s compensation package to help the many owners who have been negatively affected by these changes.
The NSW Taxi Council is considering all options available in its response to these reforms however it is hoped that through constructive discussions with the Government on the issues that have identified with the changes a suitable outcome can be achieved.
A critical issue that the NSW Taxi Industry must address in the immediate future is how it will set quality standards now that the majority of quality related regulations have been removed. History has demonstrated that removal of these regulations in the point to point transport sector have usually resulted in the diminution of standards, however it is vital for the future viability of the NSW Taxi Industry that this is not allowed to occur.
Consumer power is at an all-time high, largely due to the ubiquitous nature of social media and passengers will punish taxi networks and operators if inadequate services are provided to the public. Although taxi networks will be the key bodies that will determine how services are to be delivered, the NSW Taxi Council is leading discussions on this critical issue as it is considered that an on an industry wide approach is adopted to ensure that quality is effectively maintained into the future.
Whilst the reforms announced by the NSW Government have been highly impactful, it is vital that the NSW Taxi Industry looks forward to its future in a rapidly changing world. Key to ensuring a strong and viable industry will be ensuring that the taxi industry is allowed to compete on a level playing field and hence the urgent nature of the above negotiations between the NSW Taxi Council and the NSW Government.
It is equally vital that the industry also looks to maximise the opportunities that will ultimately arise through this process and not dwell on the negative impacts. If the compensation and structural adjustment package is able to be more effectively designed and implemented, then this will provide a platform upon which the industry can also move forward with well earnt dignity and rightful support.
Readers who wish to find out more about the Point to Point Transport Reforms announced by the NSW Government are encouraged to visit the NSW Taxi Council website and the NSW Government’s page on Point to Point reforms.
Roy Wakelin-King AM
Chief Executive, NSW Taxi Council