Government reforms: further details

Premier Daniel Andrews and Minister Jacinta Allan announced the Government’s reform package for the commercial passenger vehicle industry


Disclaimer: Please note this article was prepared shortly following the Government's reform announcement in August. Please check more recent articles for up to date information on the reforms. 

Update 7 September

Government reforms to the Victorian commercial passenger vehicle industry

On Tuesday 23 August 2016, Premier Daniel Andrews and Minister for Public Transport, Jacinta Allan announced major changes to the regulation of the commercial passenger vehicle industry in Victoria.

The VTA is supplying information about the changes here, and through various other communication channels, in an attempt to keep the industry up to date.  This should not be taken as meaning the VTA supports, endorses or accepts the information these updates contain.

What was announced?

Transition payments

The $453m support package announced includes:

  • a $75 million Fairness Fund to provide targeted support for industry participants that may experience financial hardship as a result of these changes and ensure the provision of accessible point-to-point transport services into the future
  • a $378 million Industry Transition Assistance package will provide assistance payments to licence holders.

Other key features of the announcement include:

-          Introduction of a $2 levy on all commercial passenger vehicle trips

-          Introduction of a single vehicle registration system for all commercial passenger vehicles to                     replace existing licensing arrangements

-          Immediate changes to driver accreditation - see the detailed information on the next page

-          Deregulation of taxi fares

-          Changes to the definition of Network Service Providers

How and when?

The Government have said changes will be made through two lots of legislation, one in late 2016/early 2017 and the second in late 2017/early 2018.

The first stage of changes will include the lowering of the fee associated with getting a hire car licence and establishing a new definition for ‘Network Services Providers’ to encompass ride share operators. 

The second lot of changes will include the introduction of a $2 levy on all commercial passenger vehicle trips, deregulation of taxi fares, replacement of vehicle licensing with a single vehicle registration approach, decisions relating to the MPTP Program and a review of the driver agreement implied conditions.

What does the VTA think of the changes?

It has always been the view of the VTA to take a considered and sensible approach to policy announcements and regulatory reform. The reason for this is because it is the best way to work towards a positive outcome for our industry and its passengers.

Our representations to Government have always focused on achieving two key things:

-          fairness for those who have invested in good faith in our industry; and

-          changes to future regulation of the industry to deliver a level playing field which will allow taxis to genuinely compete with all providers of commercial passenger vehicle services including a reduction in the prescriptive regulation and costs associated with running a taxi.

It has been our resolute view that large scale reform of the licensing system must be accompanied by appropriate and fair compensation for those who invested in our industry in good faith.

The VTA has serious concerns for the impact on licence holders due to the proposed transition scheme.  Again, the VTA has always argued strongly for an outcome that delivers fairness to those who have invested in good faith. We cannot support an outcome which degrades their contribution to the people of Victoria.

We also hold serious concerns about the significant challenges associated with the collection of the proposed trip levy.  We believe in principle that funding the transition package is the responsibility of Government, not users of commercial passenger vehicles services. Further, its collection will be extremely difficult and impose huge costs on all levels of the industry over many years.

As we did following the announcement of the Victorian Taxi Industry Inquiry reforms, the VTA is seeking legal advice on the legality of the changes announced.

In regard to the second aim, we believe the broad structure of future regulation will afford the taxi industry the opportunity to genuinely compete for customers.  The changes announced in Victoria certainly represent the most significant reforms of any State or Territory in Australia, and perhaps even internationally, and reflect an understanding and willingness to confront the major shifts that have occurred within the commercial passenger vehicle industry

How can I keep up to date?

The VTA will continue to provide information via its many communication channels to keep members and the industry informed about changes.  Again, this is being done in an attempt to keep the industry up to date.  This should not be taken as meaning the VTA supports, endorses or accepts the information these updates contain.

There is still a great deal of detail about the reforms that we do not know.  The information that has been made available by the Government since the announcement, including fact sheets for industry participants can be found on the Department of Economic Development, Jobs, Transport and Resources website

Knowledge test update

As of 23 August 2016, the Knowledge test is no longer a requirement for taxi driver accreditation in Victoria. 

All drivers of commercial passenger vehicles will still be required to hold TSC driver accreditation.

Currently accredited drivers

Drivers who already have accreditation will not be affected.  Renewal processes, ID cards and accreditation certificates are unchanged and do not need to be replaced.

The TSC will not be issuing new accreditation certificates or cards as part of this change, if you are a current taxi driver your log in card will work in all taxis state-wide.  Driver Accreditation Conditions issued to all drivers are being updated to remove the requirements to hold an MTMH, MK, UK or HK endorsements.  You will receive an email or letter from the TSC with this change.

The TSC's public register has already been updated to reflect this. All endorsements on existing driver accreditations are now redundant, except for the W endorsement for WAT drivers. 

Current drivers wishing to 'upgrade' their accreditation

If you are a taxi driver accredited to drive in the Regional and Country taxi zones, you are now authorised to drive in the Metropolitan and Urban taxi zones.

If you are a current Urban, Regional or Country taxi driver and now want to drive in the Urban or Metro zones, you do not need to contact the TSC to make any changes/updates to your status. You are automatically permitted to drive in the Urban or Metro zones as long as you have a current driver accreditation, current MPTP login card and current taxi driver identity card.

Even if your MPTP log in card specifies a particular zone (e.g. Regional) - it will work in any other zone in a taxi fitted out with a Cabcharge machine, as the system has been updated.

WAT drivers

There has been no change to driver accreditation for WAT drivers - anyone wishing to be endorsed to drive WATs will still be required to complete the WAT Knowledge module and undertake the practical assessment.

More information about WAT accreditation is available on the TSC website.

Training

Responsibility for training drivers returns to the industry.  Networks will continue to offer training for new drivers and are now in the processes of reviewing their processes in response to these changes.

New applicants

Anyone seeking accreditation from today will need to complete the new accreditation form available on the TSC website with the medical information completed. Once submitted, the TSC will then process the police check and issues accreditation.

Questions and answers for taxi industry participants

The following information has been compiled by the VTA from publicly available information and information we have been provided directly by the TSC, Government and the Department.

This has been collated to keep the industry up to date but should not be taken as meaning the VTA supports, endorses or accepts the information.

This information was correct at the time of submission for publication on 30 August 2016.

What are the changes to licensing?

It has been announced that once all the changes have been made, all commercial passenger vehicle licensing requirements will be replaced by a single vehicle registration process.  Until that time, all commercial passenger vehicles will still be required to operate under a valid taxi or hire car licence.

Following the first stage of legislative changes due to be in effect by early 2017, hire car licences will be available for a small administrative fee. The amount of this fee is still unknown.

Taxi and hire car licence holders that have purchased perpetual and fixed-term licences will receive assistance payments, and annual taxi licence holders will receive a rebate if they renew their licences over the transition period.

 Taxis

 First Licence

 Second Licence

 Perpetual Metropolitan Taxi Licence

 $100,000

 $50,000

 Perpetual Urban Taxi Licence  

 $100,000

 $50,000

 Perpetual Regional Taxi Licence

 $50,000

 $25,000

 Perpetual Country Taxi Licence

 $15,000

 $7,500

 Greater Metropolitan Taxi Licence Release*

 $33,750

 16,875

 Other fixed term taxi licences (Annual, Peak  Service)

Annual Fee Rebate

*For conventional licences that were purchased up-front for ten years. 

 Hire cars

 First Licence

 Second Licence

 Perpetual Metropolitan Hire Car Licence

 $25,000

 $12,500

 Perpetual Country Hire Car Licence

 $12,500

 $6,250

 Special Purpose Vehicle Licence

 $1,250

 $625


The rebates for annual taxi licences will apply for selected licence fee payments due on or after 1 July 2016.  The TSC will be working to rebate amounts already paid and to adjust invoicing for payments due in future.  Administrative fees will still apply.

The information about rebates is difficult to understand.  The VTA is seeking clarification from the TSC and will update with further detail once available.

The table of assistance payments does not consider WAT licences of any kind or any information about the status of a range of other licence types currently in the market. The VTA has raised this with Government and is awaiting further advice.

The Government intends for assistance payments to be paid out over an eight year period unless you are successful in applying for hardship. There is still no information about how the compensation will be paid, i.e. installment frequency. 

Perpetual licence holders will still be required to pay their annual licence renewal fee (approx. $500) in order to maintain their licence until licences no longer exist. Otherwise, the TSC will cancel your licence and you will lose your entitlement to compensation.

Can I keep my licence? 

No.  This is a compulsory acquisition of all privately owned taxi and hire car licences by Government.  In effect, once the final package of legislation is passed licences will no longer exist in law. 

Which licences are counted as the first 2?  What if I have licences in a company name? 

If people own licences in different zones, assistance payments will be based on the most valuable licences.  For example, if you own 1 licence in the metropolitan zone and another in the regional zone, you would receive $100k for the metro licence as your first licence and $25k for your regional licence as your second licence.

Licences held in company names will be eligible to receive assistance payments but total payments will be restricted to 2 licences per accredited licence holder.  Given we know many people hold licences in the name of partnerships, trusts, co-ops and other business structures this will not be easy for the Government to achieve.  We have raised these questions with Government. 

Can I sell my licence now?

Yes, you can transfer your licence but the TSC website states that to be eligible for the payments, the licence holder must have held the licence on 15 August 2016, and continue to hold the licence. 

This date was chosen because it was the date information about the reforms was leaked publicly. This gave rise to the potential of strategic trades to enhance entitlements to assistance payments. The VTA is aware there were a small number of licence transfers made between 15 August and the announcement on 23 August.  Discretion will be exercised in these cases to determine whether or not these trades were strategic in nature and thus who is entitled to the assistance payment.

Can I keep assigning my licence?

Until both lots of legislative changes are made, the Government intends for all taxis to continue to operate under a taxi licence. Until the second stage of changes in late 2017/early 2018, the Government does not intend to make any changes to the prices for Government taxi licences and as such existing arrangements by taxi operators will continue.

What will happen to fares?

The Government announced their intention to deregulate fares as part of the second stage of changes in late 2017/early 2018. In the meantime, nothing will change. There is significant work to be done to deal with the interaction of fare regulation with various others parts of regulation including driver agreements, farebox split, metering and protections for customers.

What happens to vehicle specifications?

In July, the TSC made changes to the taxi vehicle specifications, effectively removing the existing taxi-cab vehicle specifications and introducing a new specification which relates only to WATs.  You can read more about the rules on the VTA website.

Do I have to collect the trip levy?

The Government have said a $2 trip levy will be introduced as part of the second stage of changes. There is no information yet on how this levy will be collected, by who or how it will be paid to Government.

The information released by Government says that “from 2018 all Network Service Providers and taxi operators will be charged a levy equivalent to $2 on all commercial passenger vehicle trips. It will then be up to the Network Service Providers and taxi operators to decide whether to pass on some or all of the levy to passengers.”

What happens to the driver agreement implied conditions, 45/55?

For now, there will be no change to the driver agreement implied conditions, including insurance requirements, rules about bonds and farebox splits.  


Update 28 August

Premier Daniel Andrews and Minister Jacinta Allan announced the Government’s reform package for the commercial passenger vehicle industry, including major changes to licensing and a transition package for licence holders today at midday.  You can read the Premier’s media release here.

Some information on the content of the package, including fact sheets for industry participants are available on the Department of Economic Development, Jobs, Transport and Resources website

The most significant changes include:

  • A $453million transition package including $308 in licence transition, $50m in hardship and $70m in "red tape reduction". Transition payments will be capped at two licences per individual. Licences held in company names will be eligible. Transition payments will be made over an 8 year period. Payments are outlined in the table below. More information about the transition payments is available in the Government’s fact sheet for licence holders here.

   *(For conventional licences that were purchased up-front for ten years)

  • Effective today (23 August 2016), the Knowledge test is no longer a requirement for taxi driver accreditation in Victoria. Read more in our Knowledge test update here.
  • Changes will be made through legislation twice over the next two years.
  • The first lot of changes will include removal of the fees associated with leasing hire care licences and establishing a new definition for Network Service Providers to encompass ride share operators.
  • The second lot of changes requires significantly more work and will include the introduction of a $2 levy on all commercial passenger vehicle trips, deregulation of taxi fares and a review of the driver agreement implied conditions.

The VTA broadly supports the Government’s approach to fundamentally reforming the regulations governing the commercial passenger vehicle industry in Victoria.

The changes announced reflect an understanding and willingness to confront the major shifts that have occurred within the commercial passenger vehicle industry.

However, the VTA continues to have serious concerns for the impact on licence holders of the proposed transition scheme.  The VTA has always argued strongly for an outcome that delivers fairness to those who have invested in good faith. We could not support an outcome which degrades their contribution to the people of Victoria.

We want to discuss the Fairness Fund further with Government to ensure that it does indeed deliver fairness.

We also need to discuss further with Government the significant challenges associated with the collection of the proposed trip levy.

The VTA appreciates Minister Allan’s ongoing availability to discuss and work through issues with the industry and we are committed to continuing to work with the Government on the details of the package announced today.

We will continue to provide updates as more information becomes available.

News coverage of the announcement today includes:

Uber to be legalised in Vic with $2 levy, 9 News
Uber to be legalised in Victoria; taxi, ride-booking services to be hit with $2 per trip levy, ABC
Uber gets green light to operate in Victoria, The Age
Andrews Government sent to unveil plans to legalise Uber, Herald Sun



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