Taxicabs of Australia

Brief history

Australia adopted horse-drawn taxis once cities were established and, in the case of Queensland, Brisbane introduced the first horse-drawn taxis, which plied throughout the city. These also included hansom cabs, a more elaborate type with a closed-in cabin for the passengers with two small front doors and glass windows and their driver sitting high at the back. This type of vehicle was a standard type used in England. Hansom cabs were used in Brisbane until 1935, operating from a rank outside the Supreme Court in George Street.

Motor taxis were introduced into Australia not long after they were put into service in Great Britain and Europe. In 1906 Sydney inaugurated motorised taxicabs, followed soon after by the other states.

The taxis of the period including a variety of types, with tourers and sedans. The latter were mainly French built Renaults, which were designed as taxis, not unlike the hansom cabs. Brisbane had a number of them that plied from the ranks outside Parliament House, Brisbane in Alice Street, and the Supreme Court of Queensland building in George Street. As applied to the hansom cabs, the Renaults catered mainly for gentlemen of standing, including judges, barristers and other notables. The drivers wore uniforms with leggings, the same as those worn by chauffeurs of horse-drawn carriages.

Each large taxi company had telephones installed in a steel box type cover at city and suburban ranks, direct to the switch control rooms in the city.

Although motor vehicle taxis were being used at the time, a few horse-drawn taxis continued service in Brisbane until the early 1920s. Country towns had them for a while longer.

The progress through the years included many types of tourers from circa 1910 until the late 1920s, with British and American cars predominating. Makes featured such names as Buick, Dodge, Talbot, Vauxhall, Saxon, Ford, Chandler, Studebaker, Chevrolet, Hupmobile, Whippet, Oldsmobile, Marmon, Pontiac, Hudson, Oakland, Erskine, Rugby, Essex and Chrysler.

Sedans were added during the late 1920s and included similar makes of vehicles. This was the case with all cars being imported into Australia until World War II began. The American cars proved more suitable to Australian motoring conditions, especially for taxi work. General Motors Corporation built thousands in Australia, as did the other American companies including Ford and Chrysler.

New South Wales

The state of New South Wales, Australia is served by a fleet of around 6000 taxis. The industry employs over 22,700 taxi drivers.^[1] This state has the largest number of taxicabs and drivers in Australia.

Most taxis are Ford Falcons, although a smaller number of Holden Commodores, Ford Fairlanes, Holden Statesman/Caprices and Toyota Camrys, Toyota Taragos, Chrysler Voyagers, Holden Zafiras, Volkswagen Multivans, Toyota Hiaces and Mercedes Benz vans are in service. In general, taxis owners choose to run on liquid petroleum gas fuel.

Industry structure

In general, individual taxis are owned by small-scale operators who pay membership fees to regional or citywide radio communication networks. These networks provide branding as well as telephone and internet booking services to operators and drivers.

Fares are set by the Independent Pricing and Regulatory Tribunal of New South Wales (IPART). Other aspects of the industry are regulated by the Transport New South Wales and the Roads and Traffic Authority of New South Wales. The industry plays a self-regulating role through the New South Wales Taxi Council.

Reginald Kermode is the founder, chairman and chief executive of Cabcharge Australia, owners of the Cabcharge payment system and Taxis Combined Services, Australia's largest taxi network. The company is listed on the Australian Stock Exchange.

Vehicle operators are represented by the New South Wales Taxi Industry Association and, in country NSW, by the New South Wales Country Operators Association. Drivers are represented by the NSW Taxi Drivers Association. Although the NSW Transport Workers Union purports to represent the drivers. Most regional centres have a local taxi network.

Queensland

Taxi services throughout Queensland are numerous and operate in all main city centres, as far north as Thursday Island off North Queensland.

Prior to a taxi company being formed in Queensland, owners of taxis simply had signs on the vehicles indicating "For Hire" painted on the side, front and rear. Before 1924, all taxis plied for hire without a means of recording the mileage, other than the driver himself calculating the fare according to how far he drove his passengers. There was a fare scale, however, the driver could charge whatever he thought was nearest to the amount specified. This no doubt, brought about the introduction of meters.

The first taxi company in Queensland was Ascot Taxi Service and was formed in 1919 in Brisbane by two motor mechanics, Edmund William Henry Beckman and Edward Roland Videan.

During the 1920s the Yellow Cab Company imported their taxis from the United States, which were built especially for taxi work by the Yellow Cab Co. in Chicago. This was in 1924; the vehicle was the A2 Brougham (mustard pots) – a sedan with the driver separated from the passengers by a window with the baggage compartment in front beside him. The meter was alongside the window by the drivers side. The taxis were also the first fitted with meters in Australia. The vehicle was known as a Yellow Cab, having been built by the company with that name plate on the front of the radiator. The engines were also built especially for the type and were similar to the Willys Knight. The driver's compartment did not have side windows. The Broughams were taken out of service in 1936.

The Yellow Cab Company has now become the largest cab fleet in Brisbane and introduced the first computerised data dispatch from the control room to taxis. The system was designed to increase efficiency and provide a better and safer service for the public and increase drivers security. The computers have been installed into the fleet of over 580 taxis.

Allan (Walter) Ingram of Mount Morgan in Rockhampton has been driving taxis continuously for over 40 years. Ingram is now over 80 years of age and owns the Taxi Service at Mount Morgan. He could possibly be the oldest active taxi driver in Australia still driving cabs every day. He actually first drove taxis prior to World War II in 1939, and has owned a number of various makes of cars over the years.

The Taxi Council of Queensland is the trade association and its objective is to expand the total market for taxi services.^[2]

SsangYong Stavics are also currently being trialed in Queensland as 'maxi cabs'.^[3]

Victoria

There are 2 main service providers in the greater Melbourne area of Victoria - 13cabs^[4] and Silvertop Taxis.

The taxi industry in Victoria is current the subject of a major Government Inquiry, the Taxi Industry Inquiry.

The Inquiry being conducted in the State of Victoria, Australia by the Taxi Services Commission into the taxi industry and taxi services in that State. The Inquiry is headed by Professor Allan Fels, the former head of the Australian Competition and Consumer Commission. Professor Fels is being assisted by Dr David Cousins AM.

Announcement of the taxi industry inquiry

The inquiry was announced on 28 March 2011 by the Premier of Victoria, Ted Baillieu.^[5] Mr Baillieu said the Fels Inquiry’s key tasks would include improving disastrously low levels of public confidence, providing better security and support services for drivers and safety for customers, and ensuring drivers were properly trained and knowledgeable.

A media release issued by the Premier announcing the inquiry reported him as saying

“The state of the taxi industry has deteriorated under the former Labor Government, failing both passengers and the industry,”

“It is a troubled industry that needs significant reform to drive improvements in service.^[5]”

Industry problems

The key problems with the current Victorian taxi industry listed by Mr Baillieu in his announcement were –

• low customer satisfaction, with a sharp decline over the past five to six years
• safety and security for passengers and drivers
• insufficient support for drivers
• too many poorly-skilled drivers with inadequate knowledge
• a high turnover of drivers resulting in a shortage of experienced drivers;
• complex ownership and management structures
• lack of competition
• too much of the industry revenue not being directed to the service providers – the drivers and operators.^[5]

Inquiry scope

Mr Baillieu said in his announcement that Professor Fels would investigate every aspect of the current industry.

“It is obvious that the current industry structure and regulation has failed,” Mr Baillieu said.

“It has entrenched a lack of accountability for on-the-ground taxi services by the major industry participants.

“These issues are long-standing and deep-rooted and the Coalition Government has a responsibility to improve the level of service to customers who utilise the taxi industry.^[5]”

The Premier indicated that reforming the Victorian taxi industry would occur in two stages.

In the first stage, the Fels Inquiry will undertake a comprehensive inquiry into the service, safety and competition issues in the Victorian taxi industry.

In the second stage, following Professor Fels’ investigation, a Taxi Services Commission will take over the role of industry regulator, giving it the powers and tools necessary to reform the taxi industry. The Taxi Services Commission will be established as a statutory authority.

The Premier indicated that the current taxi industry regulator, the Victorian Taxi Directorate (VTD), will operate as normal until the Commission is established. During the second stage staff and resources from the VTD will move to the new body as it assumes the ongoing role of regulator.^[5]

Terms of reference

The terms of reference issued for the Inquiry are as follows –

"The inquiry will have broad scope to review the sector and its performance against the following principles:

• customer and service focus;
• safety for passengers and drivers;
• support for and training of drivers;
• integration with other forms of public transport;
• an outcomes-based and accountable regulatory framework;
• market design that is effective, efficient and promotes competitiveness; and
• sustainability, in economic, environmental and social terms.

The overall aim of the inquiry is to instigate major and enduring improvements to service, safety and competition to Victoria’s taxi and hire car industry. The inquiry should be wide ranging and consider all point to point transport services including taxis, hire cars and other demand responsive services with a particular focus on service outcomes.

The inquiry should conduct broad ranging consultation to determine the views at all levels, including consultation with the general public and expert industry and other key stakeholders.

The inquiry will report regularly to the Minister for Public Transport and make a final report and recommendations focusing in particular on the following:

• the appropriateness of the structure of the taxi industry including the accountability of the range of industry participants with a particular focus on commercial incentives to participants including licence holders to improve services to passengers;
• service delivery and employee conditions, in particular the working conditions, training, standards and remuneration of drivers, and how these contribute to service standards and outcomes;
• competition in the sector, in particular focusing on vertical integration, anti-competitive practices and incentives for innovation;
• the effects of regulation, particularly relating to entry to the taxi market through capped licence numbers and to price controls and taxi fare setting arrangements, and how these impact on customer service and innovation;
• the performance of the Multi-Purpose Taxi Program and wheelchair accessible taxis in providing service to people with disabilities and a broad range of mobility disadvantaged people;
• the current and potential role of taxis, hire cars and other demand responsive transport services in an integrated transport system, with a focus on the role of these services in social inclusion;
• options for reform including benchmarking safety and service standards, appropriate market-based, legislative and administrative solutions, and communication technology advancements that may be harnessed, to facilitate improvements in the safety, service and environmental performance;
• the appropriate regulatory and service model for long term regulation and operation of the industry, focussed on service outcomes;
• examine, evaluate and report on other models and new approaches in the taxi and hire car sectors both in Australia and overseas;
• transitional arrangements from the current regulatory and service arrangements to the recommended model; and
• any other related matters.^[6] "

State of the industry

Newspaper reports on 12 May 2011 reported major problems with the performance of taxi services in Melbourne, the capital of Victoria.

Under a headline "Customer satisfaction with Melbourne's taxi services hits all-time low" the Herald Sun newspaper reported that

"MELBOURNE'S taxi service has hit an all-time low, with customer satisfaction plunging to its worst-ever result.

Public Transport Minister Terry Mulder said at 53.4 per cent, from January to March, it was the poorest result since the surveys began in 2005.

It was a dramatic decline of 6.5 percentage points from the previous three months.

Key problems were difficulty in getting taxis off the street and at ranks, lack of information about taxis and poor passenger experience.

“The survey results show the worst possible outcome. They’re at their absolute lowest,” Mr Mulder said.

The results were announced this morning when taxi inquiry head Allan Fels issued his first report.

Prof Fels said the customer service standards in taxis had suffered an apparent severe decline in recent years.

“The number of complaints has gone up from 1500 to 5000 per year in the last seven or eight years,” Prof Fels said.

The report released today poses 100 questions the Fels inquiry intends to investigate over the next year.^[7] "

The Age newspaper included a similar report on 13 May 2011.^[8]

Setting the scene

The Inquiry issued an issues paper on 12 May 2011 called "Setting the Scene".^[9] The paper sets out the background to the Inquiry and raises a number of issues about the performance and state of Victoria's taxi industry. The Inquiry has called for public submissions in response to the paper by 24 June 2011.

Legislative basis

The Victorian Government introduced legislation in early June 2011 to provide support to the Taxi Industry Inquiry including by establishing a statutory authority, the Taxi Services Commission, to give clear organisational separation to the inquiry and to provide the inquiry with sufficient powers to obtain information and report to Government.

Minister's comments

Introducing the Transport Legislation Amendment (Taxi Services Reform and Other Matters) Bill 2011, the Minister for Public Transport, the Hon Terry Mulder MP commented that the measure –

"... sets a course for major reform of Victoria's taxi services. The Bill establishes a new Taxi Services Commission as the first phase of a complex and challenging reform process. The commission will provide the legislative basis and the powers for the comprehensive inquiry into the taxi industry that is being conducted by Professor Allan Fels, AO.

The inquiry and its broad terms of reference were announced by the Premier in March and its work is already under way. Once the inquiry has been completed, the commission will take over as the independent regulator of commercial passenger vehicles including taxi and hire cars.

Major reform of the Victorian taxi industry and its regulatory framework is desperately needed to arrest the serious ongoing decline in the standard of taxi services. In the late 1990s under the Kennett government, Victoria's taxi services compared favourably with other jurisdictions. Now, however, a once-proud taxi industry is on a downward spiral after a decade of government inaction and regulatory failure.

Victorians are fed up with the never-ending problems in the taxi industry and the appalling reduction in levels of service over recent years. This has been highlighted by the latest report of the Department of Transport's customer satisfaction monitor, which saw overall satisfaction with taxi services fall to the lowest level since the surveys began six years ago.

While many taxi operators and drivers do a good job, the problems driving customer dissatisfaction are clear: the long queues for a taxi in the Melbourne CBD and other entertainment districts on a Friday or Saturday night, drivers who do not know where to go, taxis that do not turn up, drivers who will not accept a short fare, violent incidents and unsafe behaviour.

Victorians are embarrassed when a dirty taxi or a poorly trained driver gives international visitors an unfavourable first impression of Melbourne. They are angry when they hear that taxi licences cost up to half a million dollars while taxi drivers are earning less than the minimum wage.

The Victorian public supports the need for an inquiry and will be raising many issues that have been hindering the industry's performance.

Taxis have a unique and crucial role in the transport system. They are a vital link in the public transport network, providing a flexible, point-to-point mode of transport that fills the gaps in fixed-route train, tram and bus services. In particular, taxis are the only mode of transport available to a range of groups which cannot drive a motor vehicle and cannot access other public transport services due to factors such as age, disability or where they live.

Victorians simply want to be able to get a taxi when they need one. They want the driver to know the way to their destination. They ask that the cab be clean and safe^[10]".

Effect of the legislation

The resultant Act established the Taxi Services Commission as a body corporate under the Transport Integration Act 2010 along with the other central transport bodies. The Act has four parts. Parts 2 and 3 set out the two major stages for the Commission. In its first stage, the Commission is conducting a comprehensive inquiry, i.e. the current Taxi Industry Inquiry. Accordingly, the Act essentially provides the Commission with secure powers and authority to enable it to fulfil its task.

The Minister made a number of comments about the wide scope of the Inquiry –

"The Inquiry will cover the commercial passenger vehicle industry in its entirety. While taxis will be the focus of the Inquiry, this broad scope means that the commission is able to inquire into hire cars, restricted hire cars, special-purpose vehicles and public commercial passenger vehicles (including certain buses).

The Commission will be able inquire into the holders of commercial passenger vehicle licences, the operators of commercial passenger vehicles, providers of taxi network services, and ancillary matters such as the supply of relevant goods and services in the industry. This industry-wide approach will ensure that the commission can comprehensively address systemic failures in the conduct, performance and regulation of the industry. In its second stage, the commission will assume the role of the industry regulator and take responsibility for implementing the reforms decided by the government as a result of the Inquiry.

This Bill reflects the government's determination to ensure that Victoria once again has world-class taxi services.^[10] "

Magnitude of reform task

Professor Fels has indicated that the reform task in the Victorian taxi industry is substantial. He has warned that the taxi industry required a "very deep review that looks at fundamental questions about how the whole system works.^[11]

"Its not just about patching the system up with a little bit of regulation here and modification there," he said. "We need to look at an industry that is not performing well systematically.^[11] "

Professor Fels said the Inquiry's "Setting the Scene" paper had received more than 140 submissions, with 40 from people with disabilities. He has reported finding disturbingly high rates of poor taxi services across Victoria. He has indicated the Inquiry would consider the cost of a taxi licence – currently about $500,000 – and whether this allowed enough access to the industry.^[11]

The industry's regulatory body, the Victorian Taxi Directorate, is also in his sights. "The whole system of regulation is on the agenda and it is also true the Government has legislated already to set up a Taxi Services Commission to come into play after our report," he said. "The VTD at the moment is a separate regulatory body we are reviewing because regulation is part of the set of problems.^[11]"

Industry reaction

The Victorian Taxi Association (VTA), which represents taxi networks and operators, has indicated "...support for an inquiry but not an inquisition".^[12] The Chief Executive of the VTA has commented that

"...if the inquiry is to be of any value it has to look into the VTD/DOT (the Victorian Taxi Directorate and the Department of Transport), get on with it, keep it simple and output focussed (rather than process focussed), look after the industry participants, and respect those who have built the industry – and bingo, the public will be better off.^[13]"

However, the head of the Taxi Industry Inquiry, Professor Allan Fels observed that

"This is an industry like any other that is there to serve a customer. We're not there to service them (the industry).^[8]"

Tasmania

As at 19 February 2009, there are 448 perpetual, 8 owner-operator and 45 Wheelchair accessible taxi licences on issue in Tasmania.^[14]

The industry employs over 1000 taxi drivers: some owner-drivers and most drivers on a bailiff agreement commission basis.

There are 3 main providers in Hobart – 131008 Hobart, Taxi Combined and Yellow Cabs. The remainder of the industry consists of smaller fleet operators with several licences each and the rest are owner-operators.

The location of taxi ranks in the southern district are around the main CBD area, with many others in suburbs close to hobart. At Castray Esplanade the taxi rank has been extended to the bus stop, making it a total of 11 spaces and an illuminated "taxi" sign was installed at a cost of $1200 per sign. This was approved by TasPorts and paid for by the Dept of Premier and Cabinet.

The Tasmanian Taxi Association began publishing a quarterly industry newsletter "TTA Taxi Talk" in December 2008.

An article published in the Mercury newspaper named Tasmanian taxi drivers as the best in Australia.

In October 2008 Yellow Cabs began operating their first Toyota Prius, becoming Tasmania's first taxi company to run hybrid vehicles.^[15]

131008 Hobart alone service over 50 percent of Hobart's immediate population.

Current industry issues – Cabcharge

One of the controversial features of the taxi industry in Australia is the influence of Cabcharge.

The Cabcharge account payment system was established in 1976 to provide a way to pay for taxi fares throughout Australia and participating countries. Cabcharge listed on the Australian Securities Exchange ASX: CAB in December 1999 and is an ASX 200 company. It has since diversified and its key activities now include technology, taxi payments and major acquisitions in the Australian bus industry through ComfortDelGro.

The company's activities are sometimes controversial and it has faced criticism at times from inquiries and regulatory bodies. Cabcharge has been the subject of recent Federal Court proceedings over alleged anti-competitive practices including predatory pricing activities and was subjected to a record high $15 million settlement for these behaviours.^[16] The company is also facing criticism of profiteering for the 10% surcharge it imposes on taxi fares paid by card and the matter is currently being investigated by the Reserve Bank of Australia.^[17]

Outline

Cabcharge's principal activities include:

• Provision of charge account facilities for businesses and individuals to enable non cash payment of taxi fares.
• Development of a Point of Sale system that allows taxi users to pay their fare using third party charge, credit and debit cards and Cabcharge products. The system requires passengers to pay a 10% surcharge on their fare although the surcharge is currently being reviewed by the Reserve Bank of Australia following public comments and complaints that the surcharge is excessive.^[17]
• Software development.
• Provision of taxi booking and dispatch services through Taxi Networks in NSW (Combined Communications Network^[18]) and Victoria (13CABS^[19]). Additional capture of taxi owners, operators and drivers is practised through provision of services including repairs and installation of in-vehicle equipment, insurance, vehicle leasing and training.
• Development of taxi-related hardware and software like taxi security camera systems, meters, and transaction processing equipment.
• Provision of taxi booking and dispatch through CityFleet UK with operations in London, Edinburgh, Liverpool, Birmingham and Aberdeen in a joint venture with Singapore-based ComfortDelGro Corporation Limited.
• Operation of buses and coaches in NSW and Victoria through Cabcharge’s associate ComfortDelGro Cabcharge Pty Ltd (CDC) (of which Cabcharge owns 49%). In NSW this includes Westbus, Hillsbus, Hunter Valley Buses and Charter Plus and in Victoria, Eastrans, Westrans, Davis (Ballarat) and Benders (Geelong).

Concerns about Cabcharge activities

Cabcharge's commercial activities have been controversial at times and the company has faced regular accusations of excessive charging or profiteering and predatory and anti-competitive practices. The company was recently subject to adverse court proceedings and a major settlement arising from these behaviours.

10% surcharge on taxi fares paid by card

Cabcharge provides EFTPOS terminals, free of charge, to approximately 97% of taxis in Australia. The Company incurs the costs associated with transactions including card and other product production, in-taxi processing, administration, fraud protection and investigation, provision of statements and driver education. However, this situation also allows the company to exert substantial and anti-competitive control over most of the Australian taxi industry^[16] and to engage in profiteering activity.

Criticism of 10% surcharge

Cabcharge has been criticised for the 10% surcharge it collects on taxi fares paid by credit and debit cards and for the general anti-competitive control it exerts on other industry participants through its control of electronic payments and other areas of the taxi system such as vehicle and related repairs and installation of in-vehicle equipment, insurance, vehicle leasing and training. Criticism has emanated from various sources including the chair of the Taxi Industry Inquiry, Professor Allan Fels, the former head of the Australian Competition and Consumer Commission, and leading card companies. The 10% charge is currently being reviewed by the Reserve Bank of Australia.^[17]

Criticism by Professor Allan Fels

Professor Fels recently approached the Reserve Bank of Australia to help lower the 10% surcharge. He has been reported as saying that

"Cabcharge has a monopoly. You have no choice if you pay electronically, you have to pay 10 per cent extra. That's really high. There is no competition. You either pay 10 per cent or you pay cash."^[20]

"The 10 per cent surcharge looks extremely high," he said. "For Victoria, the charges total (is) $25m (a year), so extrapolating that for Australia it must be around $100m. When a consumer pays the taxi fare, there are many hands in the till . . . if they pay by card, Cabcharge gets 10 per cent. We think that needs to be looked at."^[21]

Criticism by major credit operators

Representatives from major credit card operators Visa and MasterCard have also criticised the 10% fee –

"Visa spokesman Adam Wand yesterday said Cabcharge was making taxi passengers pay more than 10 times the average "merchant fee" charged by banks, and five times more than the average fee charged by retailers, based on Reserve Bank data. Surcharges in the order of 10 per cent are simply excessive and way above the cost of accepting a Visa card," he said. "It's certainly more than 10 times the average Reserve Bank published cost."

"MasterCard head of strategy David Masters said there was "no way" that credit-card processing could cost Cabcharge 10 per cent of a fare. 'I don't know how they can justify it,' he said yesterday. 'There is no question it pads out their bottom line, rather than reflecting the cost of the transaction.'"^[21]

Other criticism

In an article in Victoria's Herald Sun newspaper, John Legge noted that customers in that state paid at least $350 million in taxi fares with banking cards, for which 95% of Victoria's taxis use the Cabcharge system. Legge noted that Australian Competition and Consumer Commission penalised Cabcharge $15 million for abusing its industry dominance.^[22]

Reserve Bank action to limit card surcharges in response to the criticism

Reserve Bank (RBA) data is reported as showing that banks charge merchants an average fee of 0.81 per cent to process Visa or MasterCard payments, while the average fee passed on from the merchant to customers is 1.9% for Visa and 1.8% for MasterCard.^[21]

The RBA considers that some companies charges are excessive and, as a result, it is drafting new rules to compel offenders to limit their charges to the costs actually incurred by merchants.^[17]

"In the gun will be the 10% charge imposed by Cabcharge and similar companies for using credit cards to pay taxi fares... RBA data shows the cost to the merchants is typically 0.81 per cent."^[17]

Fine for misuse of market power and predatory pricing

In September 2010, the Federal Court imposed the highest ever penalty for misuse of market power when Cabcharge settled court proceedings with the Australian Competition and Consumer Commission (ACCC). The case resulted in Cabcharge being fined $15 million ($14 million in civil penalties and $1 million in costs) for breaching the Commonwealth Trade Practices Act.^[23]

Background

Cabcharge provides payment systems for taxi operators and drivers to manage non-cash taxi fares. The company holds a dominant market position in these services across Australia as it supplies almost 97 per cent of Australian taxis with its electronic payment system. The ACCC began proceedings in June 2009 in the Federal Court of Australia against Cabcharge. The ACCC action alleged that Cabcharge had breached the Trade Practices Act (TPA) by misusing its market power and entering into an agreement to substantially lessen competition. The action centered on Cabcharge's conduct in refusing to deal with competing suppliers to allow Cabcharge payments to be processed through EFTPOS terminals provided by rival companies and supplying taxi meters and fare updates at below actual cost or at no cost.^[23]

To breach the TPA, a corporation must have misused its substantial market power to:

• eliminate or substantially damage a competitor
• prevent the entry of a person into that market or any other market; or
• deter or prevent a person from engaging in competitive conduct in that market or any other market.

The relevant section of the TPA^[24] was amended numerous times since September 2007 to strengthen the ACCC's ability to successfully bring proceedings for alleged contraventions. For example, in September 2007, the TPA was changed^[25] to prohibit corporations with substantial market share from engaging in predatory pricing. Predatory pricing occurs when a company sets its prices below cost for a sustained period for one of the anti-competitive purposes referred to above. In November 2008, the TPA was changed again to make clear the circumstances when corporations had 'taken advantage' of their market power. This change sought to deal with the evidentiary difficulties the regulator encountered in establishing this element in earlier cases. Since January 2007, the courts have also been given power to impose a civil penalty for each act or omission contravening the TPA. Civil penalties can now be imposed were up to the greater of $10 million, three times the value of the benefit obtained from the misconduct, or 10 per cent of the annual Australian turnover of the company involved.

Settlement between Cabcharge and the ACCC

On 24 September 2010, Justice Ray Finkelstein of the Federal Court of Australia approved the settlement of the action between Cabcharge and the ACCC. The court declared that Cabcharge had breached the TPA by taking advantage of its substantial degree of power in the Australian markets for the supply of services to enable non-cash payments for taxi fares and charges by taxi passengers and non-cash instruments that could be used only for the payment of taxi fares and charges.

Cabcharge admissions to breaches of the law

To settle the proceedings, Cabcharge admitted to three contraventions of the Trade Practices Act. The company agreed to the issue by the court of declarations, compliance orders, civil penalties of $14 million and costs of $1 million.^[23]

Sydney Morning Herald allegations

Cabcharge's CEO Reg Kermode has been the subject of a sustained campaign of criticism by Sydney Morning Herald journalist Linton Besser. Besser calls Kermode, "The Taxi Tsar".^[26] Besser claims that Cabcharge and Reg Kermode "...along with the industry's other big players, continues to benefit from millions of dollars worth of free taxi plates issued to it by successive governments..." as a result of political and bureaucratic connections and favouritism stretching over a generation.^[27]

References

External links

Wikimedia Commons has media related to Taxis in Australia.

• NSW Taxi Council
• NSW Ministry of Transport
• Category:NSW TDA Forum (Discussion Group)
• The Department of Infrastructure, Energy and Resources (DIER)
• Tasmanian Transport Page, produced by The DIER