Professor Ian Harper’s competition policy review, released Monday, is only the latest call for taxi industry deregulation; the industry has been the subject of inquiries and reviews for years. In Sydney at least, nothing much changes. It’s time to shake things up — and double the number of taxis on our roads.
The problem with the taxi industry is simple. When you don’t need a taxi, they’re everywhere. When you do need one, you can’t get one for love nor money. Most of us have had the enraging experience — at 3pm changeover, if it’s wet, almost any time on a Friday or Saturday night — of not just a shortage of taxis, or a long queue, but being harassed by drivers with their vacant light off, hovering just out of arm’s reach, window wound half-down, shouting “where you going?” And if your destination — or just the look of you — is not to the driver’s liking, tough. Some drivers are so blatant they’ll get out of the cab and try to haggle a multiple fare with desperate passengers, picking and choosing to suit themselves.
It’s completely illegal. Unless you’re drunk or aggressive, or the driver is on his or her way home with a destination sign clearly visible in the front window, cabbies are legally obliged to pick you up and take you wherever you want to go. App-based “disrupters” like Google-backed Uber and Packer-backed goCatch are not the answer; ride-sharing is only going to grab a small slice of the industry, and the promoters appear to be loss-leading to get there. Who wants to sacrifice safety by lowering standards of driver licensing or vehicle registration? Driverless cars, now that would be disruptive.
The answer is pretty clear: put more cabs on the road. Like, double the number. The key sentence in the Harper review, which devotes just a few pages to the vexed taxi issue, is this:
“Significantly reduced barriers to entry could see more taxis operate at peak times, without needing to operate at off-peak times just to earn a return on the licence.”
The drivers will whinge. I know — I was one, driving nights through my uni years, decades ago (proof in the picture above). It’s a tough job, slave to the meter, and the drivers by and large aren’t well paid for the 12-hour shifts (or dangerous double shifts), backache, loneliness, pissheads and accidents that come with it.
Sometimes there was a buzz. A few memorable passengers, like the bloke out Bankstown way who told me he and a mate played nude golf over a few tinnies at the end of their cul-de-sac, picking lemons out of a bucket, whacking them into the night. I was proud to take anyone — only once did I drive off; a guy so drunk he couldn’t open the door. Before mobiles, the best company was often the one-sided radio chatter. Some operators hammed it up — “slam your fist into the roger button there, 1384” — as the old hands bid for jobs using street locations best described as aspirational. A warrant for my arrest — failing to wear a collar (pinged at the airport), then forgetting to turn up to local court to cop the fine. Only robbed once, in inner-city Glebe (my own suburb): a $5 fare, four guys waving a tenner. I was too quick to hand over the five bucks change and watched it occur to the bloke he might just hang onto that, without handing over the tenner … what was I going to do as they slid quietly out of the cab?
Back then, and from the guys I talk to I’m pretty sure it’s the same now, it was the owners making the money — certainly not the casuals driving out of a base, struggling to make their pay (the cab owner got $60, $80, $100 or whatever per shift) and cover gas before they could earn for themselves. On a Tuesday, I’d make $80. On a really good Friday or Saturday I’d make $200. It all averaged out at $10 an hour, if you could get the right shifts. Tax didn’t come into the equation — we were supposed to buy stamps, apparently.
But the taxi plates could be a goldmine, especially in Sydney in the lead-up to the Olympics, and the graph shows the steady upward trend has continued. Unrestricted taxi plates now sell for $372,000, up from $200,000 20 years ago. After such an investment, the owners — more than 80% of whom have just the one plate — have to run the car all the time.
Two years ago in New South Wales, as The Sydney Morning Herald reported, the Independent Pricing and Regulatory Tribunal made the same call for more licences to be issued, arguing that greater availability and cheaper fares would lead to more patronage, even if it diminished somewhat the value of the plates, which had returned 12-14% per annum over a decade.
There has been some response. NSW Taxi Council chief Ron Wakelin-King told Crikey that 800 new plates had been issued in NSW over the past five years, taking the total in Sydney to about 6000 and the state total to 7200. A significant proportion of those new licences are peak availability plates, which can only be driven 17 hours a day. There is now also more annual leasing of plates, as occurs in Victoria, where the recent taxi industry inquiry recommended discontinuing capping of licences. Owners are unhappy, and Wakelin-King predicts the reforms will be revisited sooner rather than later.
Wakelin-King says there are already “more plates than what the market can sustain”. The Australian Taxi Industry Association submission to the Harper review says state and territory caps on the supply of taxi licences are a balancing act, with “supply caps well in excess of normal demand, although less than the number required to service peak demand without some acceptable diminution in service level”.
Acceptable diminution of service? That’s in the eye of the beholder, and from a customer’s point of view, we’ve gone past that.
The ATIA submission reads like a cartel kingpin’s manual, recommending that state and territory governments treat taxi licences as public assets that they have “a fiduciary duty to promote”, and follow the US model and provide for compensation where a regulatory intervention lowers the value of taxi licences.
It is time for politicians to bite the bullet and take the taxi industry on. Lift the caps, or better yet remove them altogether.
Problem is there are too many taxis for quiet times and not enough over busy times. If drivers are able to find employment doing other things and only get in the cab for peak times then more licenses would work. I don’t think however it’s quite so easy in the real world.
I’ve no idea whether you’re right or wrong Paddy, but I did enjoy reading about your experiences as a taxi driver. There’s a predictable irony in being dudded by a fare in your own suburb when the legend would have it that would most likely happen in (say) Punchbowl or Mt. Druitt.
Paddy Manning is one of the journalists on Crikey who usually talks sense.
Shame about this one.
Like everybody else he has an opinion about the taxi industry but, unlike everybody else, he is eminently qualified to have one because decades ago he once drove a taxi . By this logic I might be an expert in the childcare industry because, like, I was a baby once.
He goes on to say, after presenting us with his qualifications, that it is “a tough job” poorly paid and risky.
Strangely his solution to the problems in the industry is the blinding insight that we need double the number of taxis.
Apparently this will make it a less tough job, less risky and will make it better paying.
In other words Manning offers the same paleo-Capitalistic mythology that every Right-Winger has ever used to justify the screaming need for more taxis.
Like everybody else he never considers the idea, for example, that taxi drivers might be paid a wage (say the $28.00 an hour that bus drivers get – not the $10.00 an hour taxi drivers get), get superannuation, sick leave, holiday pay, long service leave etc.
Why does manning not consider this? For the same reason nobody else ever does: if you do the numbers on this then taxi fares would probably have to at least double. At present taxi drivers subsidise everyone who gets into a cab to the tune of a decent wage and working conditions.
The balancing act that all States perform on taxi numbers is almost impossible: the daily and weekly peaks and troughs for taxi demand are quite staggering compared to any other industry; there is always an over supply of taxis for most of the day and a short shortage at peak times. Arguing for no waiting during peak times is like demanding that all 60,000 people get to enter the MCG on Grand Final day IMMEDIATELY – without any waiting at all.
Can’t be done folks: if you have a taxi industry who’s presence caters for the peak times perfectly then you will have a taxi industry in which each taxi does just one job a day – because each taxi will not get another job for the rest of the day due to the competition.
Manning states that ride-sharing apps will only ever be a “small slice of the industry.” Wrong too.
The GAGS cars (that’s Google/Amazon/Goldman Sachs cars, otherwise know as Uber) are not going away. Capitalised to the tune of 18 Billion dollars Uber is out to destroy taxi industries worldwide, not to compete with them. I hope everyone enjoys Uber’s (unregulated) fare schedule once they have destroyed the (fare regulated) taxi industry and have a monopoly.
And I hope all you hopeful (unregulated) Uber drivers, eagerly exploiting this opportunity to undercut the (regulated) taxi industry enjoy their brief, casual employment, because when Google get their driverless cars certified there will be no further need for you.
For those who want to know what happens when the regulated taxi industry fails, view this:
http://www.theindychannel.com/news/19-mile-uber-ride-concert-cost-parker-mom-106-ride-home-cost-443
Well said Graham R
Robert Jameson
Former taxi driver Melbourne and McKay QLD
Current holder of taxi license in Adelaide