Taxi industry inquiry

Final recommendations

11.2 The Taxi Services Commission should consult with the taxi industry and develop and publish guidelines governing the operation of share ride schemes. Permit holders wishing to operate a share ride service should be required to notify the Commission with the details of their service in line with the published guidance.

11.3 Commercial passenger vehicle services should be more fully integrated with other transport services in policy and planning, as envisaged by the Transport Integration Act 2010. In particular, consideration should be given to funding or utilising taxis as a complement or alternative to community and public transport where there are (but not limited to):

Service/s that are commercially viable for a taxi but not viable for a bus

Service/s that are commercially viable for a taxi and a bus, but where the taxi is more economical and/or efficient than a bus

Service/s that are not commercially viable for either a taxi or a bus, but where there is limited or no public transport available in an area, the relevant authority has determined a need for the service and a taxi is more economical and/or efficient than a bus.

11.4 The Department of Transport, with input from the Taxi Services Commission, should establish and lead a Working Party of representatives from each of the major government contract providers (for example, the Department of Veterans’ Affairs, Department of Human Services and Department of Planning and Community Development in relation to community transport and Transport Connections programs) to standardise tender processes and raise awareness of commercial passenger vehicle services as a service option.

11.5 The Department of Transport should revise procurement policies to ensure that permit holders are able to compete for contract work where a public transport service is required.

11.6 The Victorian Government should adopt measures to increase the access taxis have to bus lanes along freeways and major roads. The use of lanes should be subject to a regulatory impact assessment process and monitored by the Department of Transport, Public Transport Victoria and VicRoads to assess the impact of changes on the performance of buses.

Technology and taxis

As noted in the Draft Report, new web-enabled and mobile communications technologies have great potential to expand taxi and hire car markets and improve services. In the first round of submissions, the inquiry received many suggestions about how mobile phones, smartphone apps, the internet and ‘cloud’ computing can boost the speed and reliability of booking services, provide direct customer-to-driver communication and enable networks to better match supply with demand. These technological developments were also seen as increasing service offerings and options for customers, potentially growing the overall market for taxi services.

Since the release of the Draft Report, Silvertop  one of Victoria’s two largest NSPs has told the inquiry (at the hearings held in August 2012) that during peak demand times, it cannot satisfy booked demand from its available fleet and has adopted the practice of providing engaged signals to consumers. Silvertop also expressed the view that emerging smartphone booking technologies and applications are still immature and would take up to five years to be accepted in the market. A similar view was expressed by the VTA in its submission on the Draft Report.

It is clear to the inquiry that newer companies such as Ingogo and GoCatch are established, growing and increasingly competing for market share in Australia. Similar competition is occurring in other jurisdictions. This has led to conjecture about how established industry participants (most notably the large networks) might build on their advantage as traditional dispatchers and preserve market share in the face of the challenge coming from these new market entrants.

The inquiry has recommended that future regulation should be outcomes-focused, rather than prescriptive. This also applies to the regulation of technologies. Without making specific recommendations about the introduction and take-up of new technologies by the industry, the inquiry notes that the TSC will need to develop a depth of capability and understanding of how this outcomes-focused approach applies to technology regulation if they are to avoid blocking new technologies and innovation in the taxi and hire car industry. The TSC will also need to encourage diversity of suppliers to specific technology-related markets.

There is emerging global recognition that the rapid introduction and adoption of new technologies is influencing longstanding approaches to taxi and hire car regulation  from the development of new standards and testing procedures for in-vehicle equipment through to the safety and other implications of smartphone taxi booking applications. As noted in the Draft Report, mobile communications are likely to increasingly blur the distinction between hailing and pre-booking taxis and between taxis and hire cars. By using GPS technology to identify, select, track and directly communicate with drivers in their vicinity, customers can obtain an almost instant service, comparable to hailing a cab. In addition, passenger choice is likely to be enhanced by the ability to compare multiple drivers/operators at a glance.

These developments have significant implications for the Victorian taxi and hire car industry. The inquiry reiterates its view that any new service offerings underpinned by these new technologies should not be precluded by regulation to the detriment of customers. Any new regulation covering these technologies should be sufficiently flexible to encourage innovation and competition, while retaining high safety standards.