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29/05/2013

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Victoria’s taxi revolution will cost passengers more

  • AMELIA HARRIS, MATT JOHNSTON
  • HERALD SUN
  • MAY 29, 2013 12:01AM

A 40KM taxi trip could increase to almost $100 on Friday and Saturday nights under sweeping changes to the troubled industry.

But under the radical reforms, taxi passengers have been promised more cabs and better service in exchange for the fare jump of up to 20 per cent during peak periods.

And fares at all other times could be reduced, with the exact tariff changes to be decided in the second half of next year.

Announcing the reforms yesterday, Premier Denis Napthine said it was the biggest overhaul of the Victorian taxi industry since the demise of the horse-drawn cabs.

"We have a history, a tragic history, of cabs that were poorly maintained (and) drivers working extended shifts for little pay," Dr Napthine said.

"We had customers complaining drivers didn’t know the fundamentals of where the MCG was, where the airport was, let alone Bourke St and Collins St."

Passengers nevertheless last night gave overwhelming support to the changes, though the reaction from the taxi industry was mixed, with some even refusing to rule out a legal challenge.

Under other initiatives in the taxi blueprint, produced in response to a 16-month inquiry into the troubled industry:

AN UNLIMITED number of licences will be available to rent from the Government, with a metropolitan licence costing $22,000 a year, indexed at CPI less 0.5 per cent. Inquiry chief Prof Allan Fels recommended new licences be $20,000 a year for five years.

WOULD-BE drivers in the metro and urban areas and cabbies with less than five years’ experience will be forced to sit a knowledge exam.

CREDIT card surcharges will be slashed from 10 per cent to 5 per cent;

A LONDON-style mini cab service will be introduced;

THERE will be possible "maximum fares" to places such as Melbourne Airport;

DRIVERS will receive a mandated 55 per cent of fares, up from 48 to 50 per cent;

MANDATORY affiliation with booking networks like 13CABS and Silver Top will be axed.

Other reforms also include a new zoning system and more taxis for disabled Victorians.

Former ACCC head Graeme Samuel will spearhead the Taxi Services Commission, which kicks off on July 1.

Dr Napthine said customers could expect improvements within 12 months, while it would take up to three years for the reforms to be implemented in full.

Prof Fels said indexing the cost of new licences was a significant limitation on his reforms and would trigger escalating licensing costs.

"This will continue to put pressure on fares and the community will continue to pay heavily to investors," Prof Fels said.

The State Government will also issue "pre-booked only" cab licences for a one-off fee of $40,000 in Melbourne, which will replace the current rules for hire cars.

They will operate like London mini cabs – able to take pre-booked jobs with fixed fares, but banned from rank work and picking up passengers on the streets.

Unlike the present regime for hire cars – which must be a luxury vehicle and where a licence costs $60,000 – PBO cabs can be ordinary vehicles, making it cheaper for new entrants to the market.

A PBO licence will be $20,000 outside Melbourne.

Opposition transport spokeswoman Fiona Richardson said Prof Fels’s remarks about the reforms putting upward pressure on fares were concerning.

"Commuters will no doubt be watching carefully to see whether or not Prof Fels is right when they next jump into a cab," Ms Richardson said.

"We will be watching very closely to see whether or not these reforms live up to the expectations of commuters that have no doubt been raised significantly by the promises that the Liberal Government has made to improve taxi services."

The State Government decided to index new licences rather than compensate existing licence holders, a move flagged by Prof Fels.

Public Transport Minister Terry Mulder said licensing was the biggest issue.

"We believe the indexation of the $22,000 annual fee provides licence holders with a sense of security," Mr Mulder said.

The commission will monitor the impact of new licences through passenger complaints, local government feedback and compliance to industry standards. It has the power to suspend the issuing of licences for up to 12 months in the first three years.

Click here to read more on the Herald Sun website.

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