Cabcharge welcomes legalisation of Uber

On Thursday, the New South Wales state government announced the legalisation of ridesharing service Uber, a move welcomed by taxi payment system Cabcharge.

Cabcharge CEO Andrew Skelton said he was pleased to see action being taken by the government, saying he believes the regulation of ridesharing services is beneficial to the industry as it begins the process of levelling the playing field.

"It will make it safer for passengers because the government can now ensure that ridesharing services adhere to at least some of the same basic safety requirements as the taxi industry," he said. "We are optimistic that our newer competitors will actually comply with the latest rules and trust that if not they will at least be enforced. The government's initial response offers some respite for the taxi industry."

"Ridesharing competitors have been operating illegally for some time and we don't see the government's response as further increasing competition, instead, there is finally some prospect of ridesharing companies being held to account."

Despite welcoming the new legalisation, Skelton said the government's response to the Point to Point Transport inquiry did not include plans to ensure that services like Uber would be held to the same standards for insurance as taxis.

"Taxis pay huge premiums for Compulsory Third Party (CTP) personal injury insurance. In NSW this is approximately AU$6,278 per year - roughly ten times that paid by the typical motorist due to increased kilometres travelled by a taxi and the challenging task that taxi drivers face," Skelton said.

"It is disappointing to see that commercial ridesharing players are still able to shirk legitimate insurance responsibilities.

"This is one of the examples of structural inequity that we expected the government to address. The government's initial response misses the opportunity to level the playing field in a substantial manner, but at least it is a start."

Skelton said the state-provided compensation for plate owners is a positive outcome, but highlighted the inequality with taxis requiring licences costing approximately AU$20,000 per year, with ridesharing services free to operate without such plates.

The state government's new reform package includes a temporary levy on all point to point transport providers, equivalent to AU$1 per trip for a maximum of five years. Adding this levy to a fare is up to the driver, however.

Additionally, fares will not be regulated with companies able to determine the cost of each trip.

Stuart Overell chief operations officer for 13CABS believes the issue with surge pricing is that it can be unpredictable.

"I've heard of numerous cases where passengers felt caught out by very high fares as a result; it also has implications for accessibility, as those who cannot afford a higher fare are priced out of accessing the service," Overell said.

"Taxi fares are regulated by state governments which gives our passengers assurance that will always be charged a consistent fare. Additionally, taxi meters make it easy for passengers to keep track of the cost while in transit."

Last month, 13CABS launched its own in-app security features which gives passengers the ability to confirm the total for their trip and enter a passcode before a payment of a pre-booked or hailed trip is processed.

"App-based technology is transforming the consumer payments industry, and we're pleased to be at the forefront of this with the launch of 13CABS' in-app security system," Overell said

"We are investing in mobile payment innovation as a top priority. We know that life is busy for our passengers and that mobile phones are changing the way customers interact with businesses.

"We're focused on creating mobile solutions that offer real value and a superior service to our passengers."

Overell said the app also allows passengers to message their driver whilst keeping their personal information hidden. The 13CABS app accepts Cabcharge Fastcards and most major credit cards.

In October, the Australian Competition and Consumer Commission (ACCC) said it planned to disallow a taxi industry joint venture which would see the launch of a new smartphone taxi booking app, ihail, in direct competition to Uber.

Whilst the watchdog said it accepts the ihail app would provide a more convenient way for consumers to book taxi services, ACCC chairman Rod Sims said the commission takes the view that this comes at too big a cost to competition.

"The ACCC considers that the ihail app would have a significant impact on competition in the taxi industry, which could impact prices and quality of service," Sims said.

"[We] estimate that the initial ihail shareholders represent more than half of all taxis in Australia, and a larger share in the metropolitan areas where the app would operate. This would guarantee that from its launch, the ihail app would have a larger fleet of taxis, in a broader range of locations, than any existing taxi booking apps."

Less than a month later, the ACCC extended the timeframe for making a final decision on ihail's application for authorisation after receiving a submission from ihail proposing changes to how its smartphone taxi booking app will operate.

The companies involved in the ihail joint venture include Cabcharge, Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, and Suburban Taxis.

The watchdog said it will deliver its decision early next year.

According to the Australian Taxi Industry Association (ATIA) [PDF], in 2014, 227 million taxi trips were made Australia-wide, with 97 million of those in NSW alone. The ATIA also found the average taxi licence price in the state was AU$367,000, second in cost only to Queensland at AU$519,000. The average taxi fair in Australia in 2014 was AU$23.97.

Last week, the Transport Workers Union said Australian workers should be provided with a safety net if they find themselves displaced from the workforce as a result of technology and the "Uberisation" of jobs.

The union also said that in the 18 months that Uber has been operational in Australia, taxi driver income has dropped by 20 percent