Australia; Gridlock from Melbourne cabs, says a PricewaterhouseCoopers report

Professor Allan Fels said this was an analysis of the taxi industry Christmas wish list. Picture: David Caird. Source: Herald Sun

CONGESTION in the CBD will increase and cabs become dilapidated if the State Government adopts taxi tsar Allan Fels’s reforms, top-level analysis has warned.

A PricewaterhouseCoopers report revealed the 23 per cent increase in taxi licences proposed by Prof Fels would likely flood the market with cabs in the first few years.

Victorian Taxi Association acting CEO David Samuel said too many cabs and not enough customers would see taxis waiting on city streets and drivers fighting over fares.

“For road users more generally, it means congested streets because taxis don’t have anywhere to park while they’re waiting for a passenger,” Mr Samuel said.

He said “the only way for the operator to remain viable is to cut costs. Those costs are often those that relate to the condition of the vehicle - so tyres, windscreens, paint, upholstery”.

The VTA engaged consultancy firm PWC to compare the proposed reforms against the VTA’s suggested changes and a business-as-usual scenario.

Among the VTA’s proposals is a more gradual increase in the supply of licences driven by demand.

PWC said the VTA model could achieve a similar increase in the number of taxis “without introducing an immediate, and potentially destabilising, shock to the industry”.

The report, seen by the Herald Sun, said if the Fels reforms were adopted, holders of the 3233 Victorian taxi licences could lose $486 million and there was a strong risk operator profits would become negative and threaten industry.

Prof Fels said: “This report is not a ‘reform’ to improve taxis for passengers. This is an analysis of the taxi industry Christmas wish list. Under this model, passengers are the losers and investors remain the winners.”

SLASH the cost of an individual taxi licence from as much as $500,000 to about $300,000 and reduce rent on licences from $30,000 to $20,000.

WHO WANTS WHAT

LIFT restrictions on the number of cab licences available.

ALLOW new players to rent a licence from the government for $20,000 a year with a fi ve-year fixed term.

INCREASE the cost of hailing a cab at weekends by 20 per cent.

BREAK the stranglehold of Silver Top and 13CABS by introducing more competition.

SWITCH driver training from taxi networks to an independent body.

A 60-40 driver operator fare split.

A MORE gradual increase in the supply of licences driven by demand.

REDUCE rent on licences from $30,000 to $27,000.

FOUR per cent fare increase a year from 2013-17 and two per cent a year thereafter.

MANDATED 50-50 driver operator fare split.

THREE distinct zones where cabs can operate.

A GREATER role for taxi booking companies in enforcing service standards.

source: http://www.heraldsun.com.au/news/