Victoria faces opposition to AU$2 Uber levy

The Victorian government has said it will attach a AU$2 levy to taxi and ridesharing fares in the state as part of deeming services such as Uber officially legal.

The Victorian government is facing opposition to a proposed AU$2 levy on taxi and ridesharing fares, which it said is aimed at helping fund the deregulation of the taxi industry.

A Bill will be introduced to the Victorian Parliament on Wednesday and debated on Thursday to legalise ridesharing services such as Uber, which would offer a AU$494 million assistance package that includes a taxi licence buy-back scheme of AU$100,000 for the first licence and AU$50,000 for up to three more.

The AU$2 levy would help fund the support package and replace the AU$23,000 annual licence fee per taxi.

The state opposition is expected to fight the levy and push the government to explore alternatives to the AU$494 million assistance package, including examining the New South Wales model.

"We have concerns that the AU$2 levy will hit some of the most vulnerable in society," opposition spokesperson David Hodgett told media on Wednesday, pointing to deregulation models in Queensland where there is no levy, and in NSW, which has a AU$1 levy.

"Short ride[s] down to a doctor's appointment or to the supermarkets ... these are AU$6, AU$8 taxi fares that are going to be slugged with a AU$4 tax on a round trip, so that gives us some concern," Hodgett added.

Conversely, Victorian Public Transport Minister Jacinta Allan said that "unpicking" the legislation would prevent the industry from getting significant support. Should passengers not comply, they risk being unable to operate in the state, she added.

The Australian Taxpayers' Alliance previously condemned such proposals as slugging Victorians with "yet another great new tax to bail out the failing taxi industry".

"Victorians are already struggling with sluggish economic growth and increasing unemployment," said executive director of the alliance Tim Andrews. "The last thing they need is hundreds of millions of dollars of new taxes to fund corporate welfare."

Under the Bill, all commercial passenger vehicle providers will have to provide quarterly information on trip numbers, which would be enforced through the State Revenue Office.

Although the state government is yet to pass legislation, 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.

In NSW, the state government previously applied a AU$1 levy on all taxi and ridesharing trips, with the aim to contribute AU$100 million to pay for a compensation scheme.

The scheme offered AU$20,000 in compensation grants to select taxi licence holders in the state who had lost business due to Uber and other ridesharing services. The total AU$250 million industry transition package allows the drivers to apply for upfront payments for up to two licences.

Eligible drivers' licences must include a condition that it may be transferred, and drivers must have held their licence prior to July 1, 2016.

NSW Transport Minister Andrew Constance described the package at the time 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 said in June last year.

Uber general manager Australia and New Zealand David Rohrsheim 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.

Queensland approved a Bill to compensate taxi drivers in December. Uber drivers in the state have been operating legally since September under new transport reforms that were announced by the state government a year prior.

In Tasmania, Uber was officially launched in November last year, nearly a month after receiving the legal green light.

ACT was the first Australian state or territory to legalise ridesharing back in October 2015. Western Australia legalised the service in May last year, and South Australia followed suit in July.

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

With AAP