Magazine of the Socialist Party in Australia

End the taxi licence rort

The Victorian government’s decision to scrap the present taxi licence cartel and replace it with a single commercial licence for taxis, hire cars and ride sharing services is a step in the right direction. The current taxi licence holders however are screaming blue murder and have undertaken a series of protests which culminated in a blockade of the Bolte Bridge on February 27.

Most licence holders purchased their licences years ago, when taxis had a monopoly. The value of the licence increased due to the government restricting the amount they supplied. In fact, a licence that cost $130,000 in 1989 increased to around $500,000 in 2012.

It was consumers that had to bear the cost through increased fares. On top of this the licence holders take 50% of a driver’s takings, leaving these workers with hardly anything to live on. 15,000 drivers depend on the licences held by around 3,500 people, with most working for a small cabal who own multiple licences. Many licence holders profit by trading or renting out licences to operators.

The government decision to cancel all perpetual licences is seen by the holders as unfair, yet the government is giving them a handout of $100,000 for a first licence and $50,000 for any subsequent licence. This compensation package is outrageous, as this cartel has made enormous profits from their licences. Compensation should only be offered to small owner-operators in genuine cases of proven need. The compensation package will cost $453 million, with consumers set to foot the bill with a $2 levy on every ride.

Why should the average punter have to compensate these profiteers every time they get a taxi or an Uber? It would make much more sense to put all taxi, hire cars and ride share services into public hands as part of an integrated public transport system. That way the latest technology could be utilised and wages for the drivers protected. Compensation for those who extracted maximum profits from the cartel system should instead be directed towards improving the sector.

By Mike Naismith