Taxi industry inquiry
Inquiry’s response to submissions
Download 1.67 Mb.
|
- Navigate this page:
- Removing impediments to taxis operating fixed route, set fare services
- New markets and opportunities
Inquiry’s response to submissionsThe inquiry maintains its strong view that unjustifiable impediments to the taxi and hire car industry moving into new markets should be removed.
The inquiry’s recommendations to remove barriers to these services aim to give the industry every opportunity to explore new services at a range of prices. The inquiry rejects the assertion made by a small number of operators that a general fare increase is preferable to measures aimed at opening up new service opportunities. The inquiry’s view is that a fare increase would be counter-productive in this regard as it will drive even more customers away, further reducing occupancy rates. Removing the impediments to service innovation accompanied by some fare restructuring will give the industry much greater scope to boost occupancy and revenue. The inquiry does not agree with comments in some submissions that a strict and prescriptive metered fare structure is preferable to opening up the prospect of greater competition between ATOs and permit holders. Allowing new services to emerge will not only benefit customers; it will also benefit those ATOs and permit holders who are willing to explore new services and products. The inquiry continues to view competition as a key element in boosting taxi occupancy rates and has seen no persuasive arguments to the contrary presented in submissions. The inquiry also notes that public discussion about service innovation has led to positive recent developments after many years of industry stagnation. Following the release of the Draft Report, the inquiry actively encouraged industry participants to explore share ride schemes. In July, the VTA announced plans to trial a share ride scheme under which designated share taxis will leave the CBD Queen Street mega rank every half hour, with each passenger paying $30 irrespective of how far they travel. The benefits of the scheme include significantly reduced fares to Melbourne’s outer suburbs, while also freeing up cabs for inner city customers. This move by the industry is long overdue, but very welcome, and demonstrates the potential for providing new and innovative services. The inquiry supports moves to broaden the range of services taxis offer and considers that trials of this kind should be facilitated by the regulatory framework. Some regulatory barriers to the emergence of shared ride services can be remedied through amendments to bus regulations, clarifying that such taxi services are not covered by such regulation. The inquiry is also recommending that only maximum fares be regulated: this will allow operators and ATOs to offer more flexible services. The inquiry is also making a further recommendation in relation to share rides that would require the TSC, in consultation with the industry, to develop and publish guidelines governing the operation of share ride schemes. Permit holders wishing to operate a share ride service would be required to notify the TSC with the details of their service in line with the published guidelines.188
The inquiry has recommended specific circumstances where taxis should be funded or used as a complement or alternative to community and public transport services. Essentially, these cover situations where bus services are not commercially viable or where taxi services are more economical and/or efficient than bus services. The inquiry continues to consider that it makes little sense to fund bus services where a taxi can operate the route or service more economically and at a lower cost to government. In relation to concerns raised about the Bus Safety Act 2009, the inquiry repeats that the intent of its recommendation was that taxis should not be subject to ‘double regulation’ if they wish to operate a set fare or set route service. The inquiry has been provided with examples where the Act has been used to prevent taxis from operating these services, despite there being demonstrable benefits in allowing such an outcome.189 The confusion surrounding the Act and its interpretation indicates that the legislation is defective and is not being interpreted correctly or consistently. Accordingly, the inquiry recommends that the Act be amended to make it beyond doubt that a licensed taxi with 10 or more seats is not required to seek registration as a bus in order to operate ‘set fare’ or ‘set route’ services. The inquiry reiterates the observations made in the Draft Report that there appear to be unserviced and under-serviced markets that the taxi industry could do much more to explore. These include the pre-booked market, the outer metropolitan market, the young passenger market, the tourism market (particularly in regional areas) and the expanding market being generated by an ageing population. Better integration of taxi and hire car services with community and public transport also has the potential to generate new service opportunities for the industry. The inquiry repeats that it makes little sense to maintain a situation where public and community transport services are under stress, but taxis and hire cars are greatly under-used. The inquiry’s commissioned customer research found that more than half (52 per cent) of taxi users do not use taxis more often because of the cost and that a substantial number of people would use taxis more often if they were cheaper. This research supported evidence to the inquiry that the demand for taxi services by particular groups of customers is strongly affected by price notably young people, people with a disability and people on low incomes.190 The inquiry’s commissioned research into demand elasticity research showed that a reduction in waiting time may have an impact on demand, suggesting that the adoption of measures to reduce waiting times (such as making improvements in booking systems, providing new services such as shuttles or share rides and increasing taxi access to bus lanes) is likely to lead to an increase in occupancy rates.191 The inquiry maintains its strong view that there is considerable scope for the taxi and hire car industry to expand into new markets and lift occupancy rates, supported by a regulatory regime that encourages innovation and competition.
|