Cabcharge chair slams lack of government support for taxi industry

Cabcharge has criticised the Australian government's inability to create a level playing field after the rise of ride-booking services such as Uber.
Written by Jonathan Chadwick, Contributor

The chair of taxi payments platform Cabcharge has used his final appearance at the company's annual general meeting to criticise Australian state and territory governments for failing to support the country's taxi industry.

At the meeting in Sydney on Thursday, outgoing Cabcharge chair Russell Balding said that regulatory changes to Australia's transport industry in the face of ride-booking services like Uber have so far failed.

"I do not believe state and territory governments around Australia truly understand the taxi industry, as the regulatory changes they have introduced to accommodate 'ride share' have not resulted in a level playing field; quite to the contrary," said the chair, who will be replaced by Rick Millen.

"I am confident the young and energised management team under Andrew [Skelton, CEO]'s leadership, with the support of the board, is more than up to those challenges," he added.

Also speaking at the meeting, Skelton took the opportunity to highlight recent changes to the transport industry, and how the company plans to adapt in order to keep up with them.

"By 2021, Australians will be taking 27.6 billion motorised trips per year," the CEO said. "Currently, the taxi and ride-share market is worth about AU$6.1 billion ... Despite the size of the market, less than 1 percent of personal trips are undertaken in taxis and ride share, leaving us a huge opportunity for growth."

Last year, the Transport Workers Union of Australia said tech companies should pay compensation to workers who have been displaced by the rise of ride-booking services, and who had seen their income drop by 20 percent since the arrival of Uber in Australia.

"We know that some disruption from the current digital revolution is inevitable; some people will be left behind," Tony Sheldon, national secretary for the union, said at the time.

"For those people, it's critical that we retain a decent pension, Newstart payments that allow recipients to make ends meet while they look for work, universal free healthcare for those who can't afford it, and comprehensive superannuation policies that mean workers can accumulate savings no matter what their employment situation."

In July, the New South Wales government began offering compensation grants to select taxi licence holders whose business may have been affected by the rise of ride-booking, after the state declared the service legal in December last year.

A AU$1 ride-booking levy to compensate taxi drivers for the legislation was passed in June, which is expected to account for AU$100 million of the AU$250 million industry transition package.

At the time, NSW Transport Minister Andrew Constance described the package as one of the most generous in the world for taxi licence holders.

"Nowhere else in the world have we seen such a generous compensation package to assist industry adjustment when it comes to the taxi industry; nowhere else in the world have we made available the capacity for the transport economy to evolve like we're going to see," Constance told reporters.

Uber's general manager countered this by saying he wanted more transparency in the industry in how compensation was determined.

"If consumers are going to be asked to reach into their pockets and pay an extra levy to fund any hardship in the taxi industry I do hope that there is some transparency over that hardship," he said.

Earlier this month, Tasmania made ride-booking drivers exempt from requirements to obtain a taxi or hire vehicle licence, in effect legalising Uber in the state.

The Australian Capital Territory was the first Australian state or territory to legalise ride-booking in October 2015, with added regulatory conditions enforced for taxi drivers, such as driver history checks and vehicle safety checks.

Uber was then deemed legal in Western Australia under a major taxi industry reform in December last year, with the proviso that drivers had to obtain special "omnibus" licences in addition to their standard driving licences.

A decision passed by a Victorian County Court judge in favour of a Melbourne Uber driver effectively gave the service the green light to operate in Victoria in May.

South Australia followed suit in July, while Uber drivers in Queensland have been operating legally since September following new transport reforms for the state.

The Northern Territory government, however, is still refusing to allow Uber to operate.

The impact of ride-booking services such as Uber contributed to sliding fortunes for Cabcharge this year. In August, it posted a 45 percent fall in full year profit to AU$25.61 million; while revenue was down 10.2 percent to AU$168.8 million.

Despite this, Skelton said Cabcharge is looking to work closely with passenger, client, and driver expectations to achieve growth in the near future.

Skelton also said that as Australia moves away from a cash-based society, Cabcharge will offer new products with a focus on digital payments. This includes its two-tap booking functionality for 13CABS and Silver Service apps; a driver engagement app; separate handheld terminals for taxi drivers and hire cars; an improved FastCard; and configurable "flex e-tickets" that allow clients to customise single-use products.

"Our key focus is providing better service to our passengers, and we are increasingly achieving this through the use of better technology," Skelton said.

In 2016, the company also rolled out its payment device FAREWAYplus, which uses a touchscreen payment system to process payments more quickly; launched its premium Silver Service; and improved efficiency and connectivity by integrating its networks.

Cabcharge claimed it is the market leader in non-cash taxi fare processing, and processed over AU$1 billion in taxi fares in FY16.

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