Taxi industry inquiry
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- Greater responsibility for performance
- A new system of approval and responsibility for service
Final recommendations6.1 All taxi permit holders, regardless of whether or not they are affiliated to an Authorised Taxi Organisation, must ensure their taxis adhere to outcomes-based regulations relating to GPS tracking, safety monitoring and emergency response capability. 6.2 Consistent with Recommendations 3.2, 3.3 and 3.5, superior designed, purpose-built taxi vehicles should be encouraged to operate in the Victorian fleet to improve safety as well as accessibility. The Taxi Services Commission should conduct further research into the influence of the age of vehicles on safety to determine whether to retain and/or amend other taxi and PBO age limits in the future. 6.3 The requirement for driver protection screens should remain in place in the short term, but should be reviewed by the Taxi Services Commission after three years to consider the impact and performance of other safety measures that may replace the current screens policy (for example, the extent of take up of purpose-built taxi vehicles with in-built safety measures such as separate driver and passenger compartments). 6.4 The exemption for Victorian taxis from the mandatory use of child restraints should be removed. Taxis and Pre-Booked Only cabs should be responsible for managing the operational and service issues associated with supplying appropriate child restraints for passengers. Where restraints are carried in a roof capsule, advertising should be permitted on the capsule (in line with recommendation 3.10). 6.5 The current Taxi Rank Safety Program should be extended for a further four years, and more ‘safe city’ ranks established in the Melbourne CBD and inner city locations. 6.6 The Victorian Government, with coordinated involvement from the Taxi Services Commission and other stakeholders such as Victoria Police, local councils, liquor licence holders, major events providers and the taxi industry, should develop statewide guidelines on establishing and operating safe taxi ranks, including addressing issues relating to: Physical design and infrastructure needs Accessibility requirements for passengers with a disability and reduced mobility Operational requirements such as supervision and CCTV Management of rank space for an expanded range of services The differing requirements for inner city, suburban and regional safe ranks Clarity of funding arrangements for the ongoing investment in, and operation and sustainability of, safe ranks. 6.7 The Victorian Government, in conjunction with Victoria Police, the Taxi Services Commission and taxi industry representatives, should develop a strategy for reducing the incidence of criminal behaviour by passengers and community members affecting taxi drivers and their vehicles. This strategy should ensure better reporting, collection and analysis of relevant data and appropriate community behaviour change measures, including the possibility of increasing penalties for assaults on taxi drivers by adding drivers to the list of ‘protected occupations’. 6.8 Regulatory impact statements should be completed as a mandatory requirement before decisions are taken in relation to the implementation of significant safety initiatives in the commercial passenger vehicle industry. In cases where government policy does not require a formal regulatory impact statement, as a minimum the development of the policy should be guided by a cost-benefit analysis which should be documented and ideally form part of the consultation process (refer Recommendation 10.14). 6.9 The Taxi Services Commission should undertake research into the performance of current safety initiatives and other potential safety-related measures and provide advice to the Government as necessary.
The inquiry’s terms of reference emphasised consumer concerns with taxi and hire car services. The Draft Report noted that the complexity of the taxi and hire car industry makes it confusing for consumers to identify who is responsible for delivering services, where to direct a complaint about poor service or how to compare the performance of different service providers. The report also noted that the absence of easily accessible, up to date, centrally available information hampers effective monitoring and enforcement activity and results in unnecessary administrative burdens for government agencies, as well as for private firms that deal with taxi and hire car matters. The inquiry identified the imbalance in information between taxi operators and consumers as a key cause of market failure in taxi services and found that consumers should be provided with more information about the industry and its performance to address this imbalance. The inquiry also found that aspects of the regulatory framework are hindering service differentiation, restricting consumer choice and diminishing the capacity of permit holders and ATOs to provide consumers with signals about higher levels of quality or different types of service offerings. The inquiry explored a number of problems in the current mechanisms for dealing with complaints, identifying that consumers do not know where or how to lodge a complaint and finding evidence of a strong public perception that existing complaints handling by the industry and the regulator is difficult to access, inadequate and ineffective.
One of the core findings by the inquiry was that the existing regulatory regime governing taxis and hire cars in Victoria is overly complex and prescriptive. Rather than creating accountability for the delivery of service standards, the current regime contributes to confusion amongst industry participants, enables responsibilities for service to be avoided and results in poor outcomes for taxi users. The Draft Report noted that industry and the Government agree that the regime is far from ‘best practice’ and that the high costs associated with complying with the regulations are unrelated to the delivery of measurable benefits. The inquiry proposed replacing the regulatory regime with a new streamlined process to clarify accountability for the delivery of services and a move away from prescriptive regulation to outcomes-based regulation that gives the industry greater choice in how to meet these regulated outcomes. The proposed new permit holder scheme aimed to elevate responsibilities for service delivery to the organisation or individual that operates the taxi and/or PBO. This new system was designed to encourage greater competition between the suppliers of services and give them greater flexibility to offer customers quality services and products. Permit holders would be permitted to hold both taxi and PBO licences and, once approved as a permit holder, would be able to purchase any number of licences they wish. They would not be able to assign their responsibilities for these services to another party. The new system aimed to give permit holders the opportunity to expand and diversify their businesses by combining different service offerings and developing new products that appeal to existing customers or cater to new markets.
The inquiry made six recommendations designed to empower consumers, give them ready access to information about the industry and improve the accessibility, effectiveness and accountability of the complaints process. The Taxi Services Commission should establish a Public Register of industry participants and make the register available on its website. The register should comprise the names of all approved drivers, permit holders and Authorised Taxi Organisations in the commercial passenger vehicle industry, and give information about their business contact details, the services they operate (such as taxis, Pre-Booked Only cabs and/or Wheelchair Accessible Taxis) and the numbers of vehicles attached to their permit. The public register should be updated in real time as new entrants are granted permits and/or issued licences. Requirements for in-vehicle information (such as windshield stickers, placards and other signage) should be compatible with smartphone technology, such as the inclusion of a barcode that can be scanned by mobile phone and other portable devices. The Taxi Services Commission should take steps to ensure that, through this technology, passengers have direct access to the Public Register from the vehicle and, over time, access to information about service performance and driver quality. The Taxi Services Commission should take a strong role in providing information services, advice and assistance to consumers to enable them to make informed choices. Provision of consumer information and education about the expansion of services (such as shared ride and flexible services and an expanded pre-booked market through the introduction of Pre-Booked Only cabs) should be a strong focus of the Taxi Services Commission in the early years of reform implementation. The Taxi Services Commission should conduct consumer research, including ‘mystery shopper’ inspections of services and waiting time surveys, on a regular basis and publish the results on its website. Complaints about service delivery should be primarily the responsibility of service providers (Authorised Taxi Organisations and permit holders) who will need to have appropriate procedures in place that are readily accessible to all members of the community. The Taxi Services Commission should monitor and report on the industry’s complaints management performance and work cooperatively with Authorised Taxi Organisations to achieve desired performance outcomes. The Taxi Services Commission should have clear and transparent policies and procedures relating to complaints about its own performance. A new system of approval and responsibility The inquiry proposed a suite of recommendations to replace the current accreditation scheme with a new streamlined and more accountable regulatory process. These recommendations should be read in conjunction with the inquiry’s proposals for improving the performance of NSPs, removing the requirement for mandatory affiliation with an NSP and reducing the regulatory burden on networks. The current taxi industry accreditation scheme, which requires the accreditation of licence holders, operators and network service providers, should be replaced with a new and more streamlined regulatory process that: Removes accreditation for licence holders Replaces accreditation of operators with a permit system Replaces accreditation of network service providers with an approval process for Authorised Taxi Organisations. Existing taxi licence holders who have assigned their licence to an accredited operator under the current scheme should be allowed to continue to do so and not be required to obtain a permit. Licence holders and any relevant parties under the licence will be required to maintain up to date basic details (such as a name and business contact details) with the Taxi Services Commission for the Public Register. Persons who have obtained accreditation as a taxi operator or who have been granted a hire car licence under the existing scheme should be deemed to meet the new requirements and issued with permit/s automatically. Under the new approach, a permit should be issued to applicants who wish to operate a commercial passenger vehicle service (taxi and/or Pre-Booked Only service) and who satisfy the requirements of a character check, proof of identity and national police check. Permit holders, once approved, should be able to purchase any number of taxi and/or Pre-Booked Only cab licences they wish. Permit holders should not be able to assign the rights of any new licences they purchase that are issued directly from the Taxi Services Commission. Therefore, they will be responsible for meeting the service standards applicable to their vehicles and the drivers they engage. Service responsibilities that are currently imposed on licensees, operators and network service providers (under legislation, regulation and licence conditions) and under the taxi accreditation scheme (via accreditation regulations, conditions and Business and Service Standards) should be streamlined and duplication removed. In addition to the entry requirements for Authorised Taxi Organisations outlined in chapter 6, minimum operating rules set out in regulation for Authorised Taxi Organisations should include that they: Actively monitor the performance of affiliated permit holders and drivers to ensure they adhere to appropriate safety and service standards Implement customer complaint handling procedures in accordance with approved standards Implement disciplinary procedures in relation to permit holders and/or drivers who fail to adhere to designated standards Provide specified service delivery data to the Taxi Services Commission (for example, in relation to booking performance, fares, driver infringements and complaints) on all booked, rank and hail work provided by their affiliated fleet. Authorised Taxi Organisations should be made subject to the consumer guarantee provisions of the Australian Consumer Law. The Taxi Services Commission should liaise closely with the Director of Consumer Affairs in relation to the enforcement of the Australian Consumer Law more generally in the taxi and hire car industries. In addition to the requirements proposed in chapter 6, the regulatory requirements for permit holders who opt to operate independently (not affiliated to an Authorised Taxi Organisation) should include that they: Implement customer complaint handling procedures that are in line with approved standards Display their business name and telephone number prominently on the exterior and interior of their vehicles The Taxi Services Commission should focus a large part of its compliance activities in relation to service and safety performance on independent permit holders (given the absence of Authorised Taxi Organisation oversight of independent permit holders) Discussions about rationalising the regulation currently affecting network service providers, involving the Victorian Taxi Association, existing network service providers and other relevant parties, should continue as a matter of priority, with a view to reducing unnecessary or duplicative regulation and streamlining the law to be applied to Authorised Taxi Organisations as quickly as possible.
While there was general support for the inquiry’s recommendations in this area, a number of submissions raised concerns about privacy in relation to the proposed Public Register. The VTA noted that its support would be contingent upon privacy and commercial matters being considered and incorporated into the design process. TISV also urged privacy issues to be taken into account in setting up the register. A small number of operators were strongly opposed to the register on privacy grounds. Some submissions saw the Public Register as having the potential to contribute to improved standards across the industry. For example, CabFare viewed the creation of the register as “a matter of priority”, believing that it will “enhance passenger safety, service provision and dramatically minimise fraud in both the taxi and PBO markets”.148 The VTA did not support the proposal for the TSC to take a strong role in providing information, advice and assistance to consumers, cautioning against “extending the role of the regulator to include customer advocacy”.149 However, Victoria’s Public Transport Ombudsman endorsed the recommendation, noting that consumers feel more empowered and are more able to make well informed choices when both the industry and the regulator provide high quality, accessible information. The Ombudsman also observed that providing such information “should lead to a reduction in complaints about products and services”.150 The Victorian Equal Opportunity and Human Rights Commission did not support ATOs and permit holders having primary responsibility for dealing with complaints and strongly urged the inquiry to recommend that an independent body, such as the TSC or the Public Transport Ombudsman, deal with complaints about taxi services.
The VTA agreed with the inquiry that the current accreditation scheme has been ineffective in delivering positive consumer outcomes. While supporting a more streamlined and outcomes-focused accreditation process, the VTA had reservations about aspects of the system being proposed by the inquiry. In particular, the VTA did not support the removal of accreditation for licence or permit holders. The VTA also stated that, for any new process to be effective, the roles and responsibilities of the regulator and the industry must be clearly delineated. While observing that an independent regulator is essential to uphold the law, the VTA believed that the enforcement of service standards should rest with the NSP/ATO and that there needs to be a much stronger “chain of responsibility created from the instance where a taxi is booked … to the dispatch and carriage of the passenger”.151 The VTA’s view was that NSPs/ATOs should have the clear means to enforce effective sanctions against drivers who ‘break the rules’ in relation to higher service standards. Many of the operators opposed to the inquiry’s licensing reforms have linked their opposition to concerns that the reforms will lead to lower standards and poorer quality services (see chapter 3). The VTA, along with those licence holders and operators opposed to the removal of mandatory affiliation, also opposed related aspects of the new permit system, arguing that it will lead to independent permit holders not being properly scrutinised and the erosion of the effectiveness of the system (see chapter 6). A small number of submissions argued that the current accreditation scheme is working well and is understood by industry participants, and that changing it will create unnecessary confusion. Some submissions opposed making ATOs subject to the consumer guarantee provisions of the Australian Consumer Law (ACL). Generally, these submissions argued that there are ‘too many variables’ involved in the delivery of pre-booked taxi services to hold ATOs responsible under these provisions, such as “traffic conditions, breakdowns [and] disputes as to whether the taxi has actually arrived and already left”.152 Based on its experience in dealing with complaints about the transport system in Victoria, the Public Transport Ombudsman suggested improvements and clarifications to several recommendations, observing that the “the taxi industry has a significant amount of work to complete with respect to developing and implementing effective internal complaint handling processes and reporting mechanisms”.153 While supporting a more streamlined system, the Victorian Equal Opportunity and Human Rights Commission urged the inclusion of public reporting on compliance with any new standards.
The inquiry notes that its recommendations to improve consumer information and complaints services are supported by most industry participants, albeit with some reservations. The inquiry acknowledges that privacy concerns will need to be addressed in setting up the Public Register but rejects the assertion made in some submissions that these concerns mean that the register should not be established. The information proposed for the register is not personal in nature and the purpose of the register is to bring this information together in one accessible place so that consumers can easily and quickly identify service providers. The inquiry notes that the register is just one measure the TSC can take to improve the information available to consumers and the industry. As discussed in the Draft Report, the TSC could also publish regular updates to industry about market conditions, provide examples of innovation in taxi and hire car services, and publish performance measures to assist consumers to make more informed choices. The inquiry strongly disagrees with those submissions arguing against the regulator adopting a more consumer-focused role. The inquiry considers it appropriate and desirable that the regulator benchmark its performance not only against taxi industry expectations and perceptions, but also against community standards and customer expectations. In line with its approach to move away from prescriptive regulations and place greater responsibility on service providers, the inquiry continues to view ATOs and permit holders as being primarily responsible for handling complaints, with oversight provided by the TSC. The TSC should also have the power to deal with unresolved complaints and to fine ATOs and individual operators who fail to deal satisfactorily with the complaints they receive.
The inquiry’s intention continues to be that, over time, the new permit system will increase the number of owner-permit holders in the industry, clearly fix responsibility for service delivery at the permit holder (operator) level and clarify that existing licences (conventional and WATs) that can be assigned are held for investment purposes only, not for directly operating a taxi or PBO. Other than recommending some minimum requirements, the inquiry has not set out new detailed service standards, believing this is appropriately the role of the regulator. However, the inquiry accepts that improvements can be made to strengthen its recommendations in a number of areas and has made modifications to this end. In relation to concerns about monitoring independent operators (particularly in the absence of mandatory network affiliation), the inquiry notes comments from industry participants that existing networks do not feel empowered under the current regulatory framework to monitor the quality of drivers and vehicles. Nonetheless, the inquiry acknowledges that the quality of service delivered by independent operators may become an issue in the proposed new framework where affiliated vehicles will be subjected to a higher degree of focus from their ATOs. The proposed reforms offer a number of measures designed to ensure proper scrutiny of independent operators (including better customer information in taxi vehicles and the Public Register of industry participants). The inquiry expects that independent operators will also be a major focus of the TSC’s compliance activities and that the greater responsibility placed on ATOs under the new scheme will free up some of the regulator’s resources to ensure the effectiveness of this focus. The inquiry also considers that the market will play a role in monitoring the performance of independent operators, as operators will need to attract their own customer base in order to maintain a supply of pre-booked work and will have to provide a service that meets their customers’ expectations. In relation to concerns about applying the Australian Consumer Law to ATOs, the inquiry accepts that further work will be needed to ensure the effectiveness of such an approach. The inquiry is recommending that the TSC consult with Consumer Affairs Victoria on the application of the consumer guarantee provisions of the ACL. The inquiry reiterates that its overriding intention in this regard and in relation to the new permit system more broadly is that ATOs should be more accountable to consumers for the service they provide. As with other service industries subject to consumer guarantee provisions, this does not mean that ATOs would be expected to meet unreasonable or unfair performance standards.
Public register of industry participants 7.1 The Taxi Services Commission should establish a Public Register of industry participants and make the register available on its website. The register should comprise the names of all approved drivers, permit holders and Authorised Taxi Organisations in the commercial passenger vehicle industry and give information about their business contact details, the services they operate (such as taxis, PBOs and/or WATs) and the numbers of vehicles attached to their permit. The Public Register should be updated in real time as new entrants are granted permits and/or issued licences. 7.2 Requirements for in-vehicle information (such as windshield stickers, placards and other signage) should be compatible with smartphone technology, such as the inclusion of a barcode that can be scanned by mobile phones and other portable devices. The Taxi Services Commission should take steps to ensure that, through this technology, passengers have direct access to the Public Register from the vehicle and, over time, access to information about service performance and driver quality.
7.3 The Taxi Services Commission should take a lead role in providing information to passengers about new services and other strategies that enhance consumer awareness and choice. This should include, for example, an education campaign on how to book PBO cabs, identify approved PBO cabs and report illegal operators, as well as the rights and obligations of consumers and drivers at taxi ranks. The Commission should undertake community awareness and education campaigns in all practical media platforms to all demographics of the Victorian community. This will ensure passengers have a full understanding of their rights and responsibilities under the law and how to access information about taxi and hire car services. 7.4 The Taxi Services Commission should conduct consumer research, including ‘mystery shopper’ inspections of services and waiting time surveys, on a regular basis and publish the results on its website. 7.5 Complaints about service delivery should be primarily the responsibility of service providers (that is, Authorised Taxi Organisations and permit holders) who will need to have appropriate procedures in place for dealing with complaints that are readily accessible to all members of the community. The Taxi Services Commission should monitor and report on the industry’s complaints management performance and work cooperatively with Authorised Taxi Organisations to achieve desired performance outcomes, and publish results on its website. 7.6 The Taxi Services Commission should have clear and transparent policies and procedures relating to complaints about its own performance.
8.1 The current taxi industry accreditation scheme, which requires the accreditation of licence holders, operators and Network Service Providers, should be replaced with a new and more streamlined regulatory process that: Removes accreditation for licence holders Replaces accreditation of operators with a permit system Replaces accreditation of Network Service Providers with a more limited approval process for Authorised Taxi Organisations. 8.2 Existing taxi licence holders who have assigned their licence to an accredited operator under the current scheme should be permitted to continue to do so and should not be required to obtain a permit when continuing or renewing assignments. Licence holders and any relevant parties under the licence will be required to maintain up-to-date basic details (such as a name and business contact details) with the Taxi Services Commission, for the Public Register (Recommendation 7.1). 8.3 Persons who have obtained accreditation as a taxi operator or who have been granted a hire car licence under the existing scheme should be deemed to meet the new requirements and be issued with permit/s automatically. 8.4 Under the new approach, a permit should be issued to applicants who wish to operate a taxi and/or hire car service and who satisfy the requirements of a character check (including a proof of identity and national police check). Permit holders, once approved, should be able to purchase any number of taxi and/or hire car licences and registrations as they wish. 8.5 Permit holders should not be able to assign the rights of any new licences they purchase that are issued directly from the Taxi Services Commission. Therefore, they will be responsible for meeting the service standards applicable to their vehicles and the drivers they engage. 8.6 Service responsibilities that are currently imposed on licensees, operators and Network Service Providers (under legislation, regulation and licence conditions) and under the taxi industry accreditation scheme (via accreditation regulations, conditions and Business and Service Standards) should be streamlined and duplication removed. A Working Group comprising representatives of the Department of Transport, the Taxi Services Commission and industry representatives should be established as soon as possible to ensure this work is given high priority. 8.7 In addition to the entry requirements for Authorised Taxi Organisations outlined in Recommendation 4.2, minimum operating rules set out in regulation for Authorised Taxi Organisations should include that they: Actively monitor the performance of affiliated permit holders and drivers to ensure they adhere to appropriate safety and service standards Implement customer complaint handling procedures that are in line with the Australian standard AS ISO 10002-2006 Implement disciplinary procedures in relation to permit holders and/or drivers who fail to adhere to designated standards Provide specified service delivery data to the Taxi Services Commission (for example, in relation to booking performance, fares, driver infringements and complaints) on all booked, rank and hail work provided by their affiliated fleet. Legislation should make clear the penalties, including fines, that apply for failure to comply with the minimum operating rules. 8.8 Authorised Taxi Organisations should be made subject to the consumer guarantee provisions of the Australian Consumer Law (ACL). The Taxi Services Commission should liaise closely with the Director of Consumer Affairs on the application of the consumer guarantee provisions to Authorised Taxi Organisations and the enforcement of the ACL more generally in the taxi and hire car industries. The Commission, in conjunction with Consumer Affairs Victoria, should also provide clear advice to the taxi industry on compliance with the provisions of the ACL. 8.9 In addition to the requirements proposed in Recommendation 4.1, the regulatory requirements for permit holders who opt to operate independently (that is, not affiliated to an Authorised Taxi Organisation) should include that they: Implement customer complaint handling procedures Display their business name and telephone number prominently on the exterior and interior of their vehicles. 8.10 The Taxi Services Commission should, on a risk basis, focus a large part of its compliance activities in relation to service and safety performance on independent permit holders (given the absence of oversight by Authorised Taxi Organisations).
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