December 17, 2015 – 6:36PM
Passengers face a $1 levy for each trip to help pay for a $250 million compensation package for the taxi industry after the Baird government decided to legalise ride-sharing services such as UberX.
The government has justified the levy over the next five years by insisting that the sweeping changes will significantly lower taxi and ride-sharing fares across the state.
While the levy will be slapped on taxis and ride-sharing operators from early next year, the government conceded that the industry is likely to pass on the cost to passengers.
“We expect fares to come down.” Transport Minister Andrew Constance. Photo: Peter Rae
In a widely expected decision, NSW cabinet signed off on legalising ride sharing from midnight on Thursday and putting in place a compensation package, which includes payments of $20,000 to owners of taxi licence plates in perpetuity. The one-off payment will be capped at a maximum of $40,000 for owners of multiple plates.
Transport Minister Andrew Constance said the immediate repeal of more than 50 taxi and hire-car regulations would put downward pressure on fares and give consumers more choice, citing interest from the NRMA in starting its own ride-sharing service.
“Consumers have moved with technology. It is now time for government and industry to move in the same way,” he said. “We expect fares to come down.”
“Important step forward”: David Rohrsheim of Uber Australia. Photo: Peter Braig
Mr Constance said the $250 million compensation package recognised the “war widows and mum-and-dad investors” who had in many cases invested their life savings in taxi licence plates.
“It’s important that we don’t forget those who have poured their savings into taxi licences over the past decades and ensure they get equitable assistance as this industry adjusts to changes in our economy,” he said.
The package includes a fund of up to $142 million for taxi licensees who face hardship as a result of the changes, and a buyback scheme for perpetual hire-car licences.
The transfer value of a taxi licence in the state has crashed by almost a quarter in the past month to $228,500, amid growing speculation that the government was on the cusp of legalising UberX.
The government expects to recoup about $50 million a year from the $1 levy on each trip, which will go towards paying for the industry adjustment package. The levy will come into force once legislation is passed in February or March next year.
Mr Constance conceded that taxi drivers and other ride-sharing operators were likely to pass on the cost to passengers.
Labor and the Greens both welcomed the legalisation of ride-sharing services in the state.
However, a spokesman for Labor leader Luke Foley said the opposition was concerned about the total amount consumers would end up paying for the levy over five years.
NSW Taxi Council chief executive Roy Wakelin-King said the compensation package equated to only 10 to 15 per cent of the total value of licence plates in NSW, and the council needed to explore the detail to ensure “it deals with the potential loss that some owners will feel”.
“Every industry that has had some kind of micro-economic reform, such as the dairy industry and the fishing industry, has had a structural adjustment package,” he said.
“We need to make sure that we have a strong and viable future.”
NSW has almost 7100 taxi licence plates, about 5700 of which are in Sydney. About 70 per cent of taxi operators do not own a taxi licence but pay lease fees to the owner, or hold an annual taxi licence.
The Baird government’s decision follows on the heels of the ACT government passing legislation in October to permit ride sharing services such as UberX.
It means ride-sharing drivers will have to pay a one-off driver authority fee of $45 and an annual registration payment of between $120 and $200, depending on the size of their vehicle.
One of the concerns of ride-sharing drivers has been that licence fees will discourage them from operating because many drive for fewer than 10 hours a week.
While UberX drivers will no longer need to fear fines, incumbent taxi operators will still have sole access to ranks and the ability to pick up passengers who hail them.
Uber’s Australian general manager, David Rohrsheim, said the introduction of ride-sharing regulations was an “important step forward” and recognised consumers’ right to chose how they travelled around the state.
Uber began operating in Sydney in November 2012, but it wasn’t until 18 months later that it introduced its UberX ride-sharing option.
Sydney taxi driver Mohit Dharnia said he had been planning to buy a licence plate for a long time but the advent of Uber had put him off.
“Every week the earnings for drivers are going down so maybe in another two or three months … I will try Uber,” said Mr Dharnia, who has been a taxi driver for the past seven years.
Source : Sydney Morning Herald