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Innovation Review
Discussion Paper
© Australian Capital Territory, Canberra May 2015
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced
by any process without written permission from Chief Minister, Treasury and Economic Development Directorate,
ACT Government, GPO Box 158, Civic Square ACT 2601.
Produced for .
For further information
Phone: 13 22 81
Email: taxiinnovationreview@act.gov.au
Publication No 150366
Discussion Paper 3
How to lodge a submission
The Taxi Industry Innovation Review is an inclusive process. We would like to hear from you.
You can provide a written response to this Discussion Paper by 29 June 2015, either by post, email or
facsimile.
Postal Address:
Project Officer
ACT Taxi Industry Innovation Review
ACT Government
GPO Box 158
CANBERRA ACT 2601
Email address: taxiinnovationreview@act.gov.au
Facsimile: (02) 6207 0025
Unless a submission is clearly marked “In confidence”, it will be treated as a public document and made
available to on the website of the Chief Minister, Treasury and Economic Development Directorate.
The webpage for the Review is located at
www.cmd.act.gov.au/policystrategic/regreform/2015-taxi-industry-innovation-review/.
Discussion Paper 5
List of terms
Dynamic pricing Pricing that changes and is formed around the current demand
for and supply of a particular type of on-demand transportation,
(also known as surge pricing)
such as ridesharing.
Hire car A vehicle (other than a bus, taxi or demand responsive service
vehicle) that:
(a) is used, or is intended to be used, for the transport of
passengers under a contract; and
(b) does not stand or ply for hire for the transport of passengers
along a road or road- related area.2
1. M acquarie Dictionary Online, 2015, Macquarie Dictionary Publishers, an imprint of Pan Macmillan Australia Pty Ltd, www.macquariedictionary.
com.au
2. Road Transport (Public Passenger Services) Act 2001, s. 42, http://www.legislation.act.gov.au/a/2001-62/default.asp
3. ‘Sharing economy’, Dictionary, Investopedia.com, www.investopedia.com
4. Road Transport (Public Passenger Services) Act 2001, s. 45.
New technologies
In recent years, new and innovative technologies and business models have emerged in a number
of capital cities in Australia (and the world) through smartphone apps. These involve booking and
payments systems, and ridesharing services – using private vehicles for passenger transport and
reward.
These platforms can provide an extension of the on-demand transport market. As for other examples
of the ‘sharing economy’, these platforms make it easier for consumers to negotiate and engage
directly with service providers. Consumers are also provided with a higher level of information and
opportunity for price comparison in advance. As a result, these newer interfaces involve different risks
from traditional arrangements such as rank and hail work, where a taxi driver picks a passenger up from
the street.
Discussion Paper 7
Existing members of the taxi industry are also engaging with new practices. Many taxi networks, for
example, have their own app-based booking systems.
Ridesharing and app-based booking systems have been readily taken up by consumers where they
have been introduced, with companies that provide booking platforms gaining market share in
Australia and overseas. These market trends will have significant implications for all of the stakeholders
in the taxi and hire car market – from consumers, to drivers, operators and taxi networks. In particular,
taxi networks and licence plate holders with significant investments will face increasing competitive
pressures.
5. The Australian Government Competition Policy Review Final Report, March 2014, p. 135, http://competitionpolicyreview.gov.au/final-report/
6. T he Australian Government Competition Policy Review Final Report was released on 31 March 2015.
See: http://competitionpolicyreview.gov.au/final-report/
Discussion Paper 9
The Review’s full Terms of Reference are at Appendix A.
The Review also recognises the earlier work of the 2010 ACT Taxi Industry Review, in which a series
of recommendations were made to improve a number of aspects of the taxi industry. Further
discussion of the 2010 Review and previous Government initiatives in the taxi and hire car industry is in
Appendix B.
1.3 Methodology
The ACT Government is taking a systematic and evidence-based approach to assessing potential
changes to the regulation of the ACT’s on-demand transportation industry.
As part of its approach to the Review, the Government will gather data and generate analysis from
internal and stakeholder sources. It will also use The Centre for International Economics (CIE) to provide
advice on the state of the industry and the impacts of potential changes and strategic advice on
aspects of the Review and reform proposals.
Process
The Review will include several stages. The indicative timelines are shown in Table 1.
Milestone Date
Review Announced 28 January 2015
Industry stakeholder consultation February 2015
Release of Discussion Paper May 2015
Formal community consultation 6 weeks
Government consideration of reform August/September 2015
Source: Regulatory Reform Team (RRT)
This Discussion Paper outlines the state of the market and regulatory practices, community and
business needs, and the implications of new technologies. The Paper is structured as follows.
• Section 2 – an outline of the broader vision for on-demand transport and key issues.
• Section 3 – the current state of the ACT’s on-demand public transport market.
• Section 4 – the current regulatory environment, its objectives and the costs involved with
regulation.
• Section 5 – a discussion of the new technologies being introduced to the on-demand transport
market.
• Section 6 – consideration of the impacts that the new technologies will have on various
stakeholders in the market.
• Section 7 – a discussion outlining areas for potential reform.
7. ACT Government, Transport for Canberra – Transport for a Sustainable City, 2012–2031, Environment and Sustainable Development (ESDD),
Canberra, 2012, p. 18, http://www.transport.act.gov.au/__data/assets/pdf_file/0003/397245/Pages_from_EDS_ACT_Transport_Policy_FA_
final_web.pdf
Discussion Paper 11
2.1 Improved outcomes for consumers
The value of on-demand transportation is in providing services that people want. Factors that
passengers rate as important from taxi and hire car services include:8
• reliability – knowing a vehicle will turn up or be available
• waiting time/convenience – time waiting for a vehicle to arrive
• price
• vehicle comfort
• driver behaviour (safety of driving, courtesy, knowledge of destination)
• ease of booking and payment.
The aim for on-demand transport is to improve outcomes for users of these services in the ACT.
Innovation in delivery is a key mechanism to improve outcomes for consumers.
2.2 N
ew technologies and business models are changing
industries
New methods
The marketplace for on-demand transport is changing. First, technology used in taxis and hire cars
is evolving so that the process of booking and paying for travel is becoming increasingly efficient.
Second, new transportation business models closely linked to digital technology innovations are also
rapidly emerging outside of traditional transportation businesses. A prominent example is ridesharing,9
which, through smartphone apps, matches prospective passengers with drivers in private vehicles,
and a trip is provided for a fee. Third, similar passenger–driver matching apps, created by third-party
vendors, have also emerged for use by existing members of the taxi and hire car industry.
These new business models, like ridesharing, have attractive service and pricing features, and have
established substantial passenger bases in Australia and in markets globally; for example, in Sydney10,
Singapore and San Francisco. These innovations have rapidly changed customers’ expectations of
on-demand public transport.
From these business models, passengers may benefit from new transportation experiences, and choose
from a variety of transport options. They may also benefit from the safety features that are inherent in
some business models, and from additional safety rules that have been set by the providers of these
models.
8. S ee Taverner Research, Survey of Taxi Use, Surry Hills, December 2014, http://www.ipart.nsw.gov.au/Home/Industries/Transport/Reviews/
Taxi/Review_of_taxi_fares_to_apply_from_July_2015_in_areas_of_NSW_outside_Sydney/14_Apr_2015_-_Final_Consultant_Report/
Final_Report_-_Taverner_Research_-_Report_on_Survey_of_Taxi_Use_-_December_2014
9. The new ridesharing models are discussed in greater detail in Section 5.
10. Independent Pricing and Regulatory Tribunal (IPART), Sydney Taxi Fares to Apply and New Licences to be Released from July 2015 Transport —
Draft Report, December 2014, p. 14, http://www.ipart.nsw.gov.au/Home/Industries/Transport/Reviews/Taxi/Review
Discussion Paper 13
2.3 Regulation needs to keep up
New business models often enter markets before government has given policy and legislative
consideration to them. These innovations and business models present on-demand transport markets
with opportunities, risks and the need for broader industry and policy consideration.
In the ACT, regulation is applied to public-passenger transport providers to support public safety
(including passenger and driver), access for people with disabilities, consumer protection outcomes,
and taxi supply and commercial practices.
The nature of the service involves the operation of a vehicle and, as such, poses a range of safety risks
to those involved. These risks need to be managed. One obvious example of this is a need to ensure the
driver is competent to drive the vehicle.
The 2014 report An Evaluation of the Current State of the Act Taxi Industry, prepared for CTIA, recommends
that the ACT Government work with the taxi industry to regulate the use of taxi-related apps, taking
into consideration several issues.12 This is in keeping with a principal aim of the Review.
Types of risks
Safety
When a person takes a journey in a taxi or hire car, they expect to travel safely. They do not
expect to experience unsafe driving or to be involved in an accident. They do not expect to be
mistreated. Different people have different levels of vulnerability to harm.
Similarly, drivers should be able to feel safe when working. Drivers face the risk of picking up a
passenger who is disagreeable or potentially violent.
Consumer protection
Similar to many marketplaces, consumers of on-demand transport services face the risk of being
taken advantage of. This could involve being overcharged or being taken along an unnecessarily
lengthy route. If a market does not provide an appropriate minimum level of service acceptable
to consumers the market may fail and/or governments may be called on to regulate.
12. D Nicholls, An Evaluation of the Current State of the ACT Taxi Industry, Canberra Taxi Industry Association, 27 June 2014, p. 6.
Information
Information is a means by which a range of risks can be addressed. Information supports decision-
making and can influence behaviours.
In on-demand transport, the information available varies between rank and hail services (picking a
stranger up from the street) and booked services. Rank and hail services do not provide consumers
with an opportunity to check readily the reputation of a company or individual, and do not provide an
opportunity to compare prices easily beforehand. When a consumer books a trip in advance, however,
they are better able to seek comparative pricing and other information to support their decision to
acquire services.
It is possible to recognise the information risks in the way the ACT Government regulates the hire car
market differently from the taxi industry. Hire cars cannot offer rank and hail work.
New app-based business models have the potential to improve the information that is available
to consumers (and other stakeholders) and, therefore, help to manage risk. For example, the rating
component of app-based models provides a strong reputation-based incentive for good customer
service and good behaviour from passengers. In doing so, the new models have the opportunity to
promote competition and consumer choice.
Payments
App-based models allow drivers and passengers to settle payment electronically (without having cash
or credit cards on hand) and provide records to account for services. This reduces an area of potential
risk relating to the threat of theft or fraud to drivers and passengers.
Do the information differences between rank and hail, and booked work present different risks? To what
extent do new technologies and business models reduce the risks involved with booking services?
Discussion Paper 15
2.5 Key policy issues
There are a number of key policy issues that the ACT Government will need to consider and address as
part of ensuring that its regulatory approach can accommodate innovation. The following overarching
questions are presented as a guide for the Government’s interests and thinking.
Services are obtained in a variety of ways, from booking through a call centre or smartphone app, to hailing
a taxi off the street. Traditionally, services are provided by taxis and hire cars; although new models such as
ridesharing are emerging.
What are the risks posed by new technologies and business models?
The risks involved with the new technologies and business models need to be understood, as well their
potential to help to manage existing risks that are currently addressed through regulation.
The ACT Government regulates the existing taxi and hire car industry in a number of ways, from licensing
restrictions to maximum fares. These regulations have a number of objectives, including public safety, access,
consumer protection and sustainable supply.
The introduction of new booking models could provide taxi drivers with alternative methods and greater
options for securing business. Taxi networks and existing licence holders would face additional competition
arising from the new business models.
• permit new entry, and facilitate competition and choice in the market
• be tailored to the risks involved in different areas of the market and different consumer needs and
requirements
• ensure a level playing field for services to be provided in different ways.
Type Description
Standard Taxis
taxis * Point-to-point, spontaneous and
& booked
booked
services
transport
provided
services
by 307 vehicles
On-demand
Wheelchair
Wheelchair Accessible
accessible Taxis
taxis (WAT)
(WAT) * Point-to-point, spontaneous
Transportation for and booked
disabled passengers transport
provided by 17services
vehiclesprovided for people with disabilities
Hire Cars
cars * Pre-booked
Pre-booked, transport services
luxury service generally
provided by 117provided
vehicles by higher end or specialised vehicles
Public Bus
bus Network
network * Transportation
ACTION bus network services link
to: employment residential
areas, areas
local town to major
centres centres,
and along attractionscorridors
transportation and events
School
School Service
service Network
network * ACTION
ACTION buses
busesoperate
operatealong
along240
individual school
individual bus
school routes,
bus routes,for
formorning
morningand
andafter-school
after-school service
service
Scheduled
Scheduled
Flexible Community
Rural Transport
buses services * Localised,
ACTION bus point-to-point bus service
service provided for passengers
to: Tharwa, with physical
Majura Road, Hall anddifficulty
Uriarraaccessing regular ACTION bus service
Light Rail
Airport bus *A proposed
Private multi-stop
scheduled rail route,
service linking
between thethe Canberra
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Airport, with
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Offices via Northbourne
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CapitalAirport
Metro Bus
- Light rail * Scheduled
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multi-stop rail the Canberra
route, linkingAirport, Russell,city
the Canberra West Row with
centre and the National via
Gunghalin, Convention Centre
Northbourne Avenue
Rural Buses Services * Service provided by ACTION buses to: Thawra, Majura Road, Hall and Uriarra
Tour & charter buses * Service provided by ACTION and privately operated buses
Flexible
Tourcommunity transport
& Charter Buses * Localised, point-to-point
Service provided by ACTIONbus service
and for passengers with
53 privately-operated physical difficulty accessing regular bus service
buses
Unscheduled
Private
Rentalvehicles
Cars * Offered
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more vehicle transport
than seven vendors at Canberra Airport and the city
Rental
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ACTIONvendors
buses and lock-up facilities
Discussion Paper 17
3.1 The on-demand transport industry
On demand public transport in the ACT is provided by taxis (standard and wheelchair accessible taxis)
and hire cars that deliver point-to-point services for passengers.
A key point of difference between taxis and hire cars relates to the ability to pick people up off the
street through ‘rank and hail’ work. Taxis are allowed to service this market, which involves a higher level
of risk to the public, while hire cars are not and must be pre-booked by the passenger.
The number of taxi licences is also capped by regulation, however, the number of active taxis can vary
as operators may surrender their Government-issued licences. The ACT Government can release more
licences, through a ballot system (which is discussed in Appendix C). Hire cars licences are not subject to a
regulated cap.
Taxis
Standard taxis
Standard taxis provide services to passengers within the ACT and in the City of Queanbeyan under a
cross-border agreement with NSW. They do so under accredited taxi networks or as independent taxi
operators. There is a cap of 332 standard taxi licences that can be issued in the ACT. Currently, there are
288 such vehicles licensed and operating. (See Table 3.)
All ACT-based standard taxis are permitted to pick up and drop off passengers in NSW.13 Similarly,
19 Queanbeyan-based standard taxis are able to transport passengers to and from the ACT.
WAT 12 5 2 19 26
Hire cars
Hire cars also offer point-to-point service, although services are typically pre-booked further in advance
than taxis. Hire car services are provided by independent operators and various booking services.
As at March 2015, there were 38 hire cars operating in the ACT, and 79 restricted hire cars, which can
only be hired for weddings and school formals.16
16. RTA.
Discussion Paper 19
3.2 Structure of the taxi industry
Chart A: Industry structure for a standard taxi
Issue of
Government
Owner Plates Service such as passenger
Network fees
booking & vehicle
maintenance
Regulatory
Regulation & requirements
Enforcement
Taxi Networks
Taxi networks
These organisations provide a range of support services to their affiliated taxi service operators, see Chart
A. Their services include dispatching hirings to member taxis received through their booking services,
installation and maintenance of equipment installed in taxis (not all networks provide this service), and
complaints handling. Some networks also provide financial services, broker insurance for vehicles and
operators and management services for perpetual plate owners.
There are three networks operating in the ACT – Canberra Elite and Silver Service (both of Aerial
Capital Group Limited), and Cabxpress. Aerial Capital Group is the dominant provider with operating
agreements with 279 (or over 90 per cent) of the standard and WAT fleet on the road in the ACT.
Cabxpress has affiliations with 24 taxis (see Table 3).
Networks commonly establish corporate by-laws requiring taxi operators, drivers and vehicles to meet
certain commercial and regulatory standards if they are to become, and remain, affiliated with the
network fleet. Many of these requirements match ACT regulatory requirements for which networks are
required to ensure compliance by members (discussed in Section 6).
Networks obtain revenue from operators through the payment of network fees and other charges or
levies. They also obtain income from related technology and business systems, including payments.
Aerial Capital Group and Cabxpress are private businesses. In general, the income of networks is
expected to be affected by taxi numbers, the level of on-demand passenger activity in the ACT and the
amount of demand served by each network.
Taxi drivers
To obtain a public vehicle driver authority to drive a taxi (see Appendix C), drivers must complete,
amongst other requirements, a taxi driver training course. A driver can be an operator/owner of a
perpetual or government-leased taxi, or a driver that drives for an operator on a full or parttime basis.
A drivers’ income is sensitive to overall passenger demand and driver supply.
17. A
ustralian Taxi Industry Association (ATIA), ‘State and Territory Taxi Statistics’ 2014, http://www.atia.com.au/wp-content/uploads/2014-State-
Territory-Taxi-Statistics.pdf
18. RTA.
Discussion Paper 21
Study A: Driver viability
Driver earnings can impact on consumer outcomes through service quality and availability.
How are drivers faring in the current taxi industry? What about operators? What further actions
or industry developments would promote viability and consumer outcomes? Are there regulatory
improvements that could be made to reduce driver costs, for example the costs of driver licensing?
19. RTA.
20. Taxi Service Commission, ‘Taxi and Hire Car Reform’, http://www.taxi.vic.gov.au/taxi-reform/reforms-implemented/driver-agreement.
Taxis
The taxi market provides an integral, 24/7 source of on-demand public transport services to a range of
community and business passengers.
Passengers can access taxi services at dedicated taxi ranks or from the road or kerbside (‘rank and hail’),
or through a booking service. All taxis can be booked by telephone direct with a driver, through a
network, via the networks website or by smartphone app where available. ACT Government estimates
and advice from industry suggest approximately half the number of trips are obtained through rank
and hail and the remainder through booked services.21
Daily, weekly and annual demand for taxis services varies markedly. Two peak demand periods occur
during the workday, and are aligned with commuter rush hour, and the arrival and departure of
morning and evening flights at Canberra Airport. Evening demand surges on Friday and Saturday
nights, with hospitality and entertainment-industry activity. Demand for taxis also increases during
Parliamentary sitting weeks and major events that occur throughout the year.22
Standard taxis
Standard taxis provide service to a range of passengers including:
• tourists and business travellers, such as those transiting the Canberra Airport
• ACT and Commonwealth government employees
• individuals requiring on-demand travel for entertainment, professional appointments, airport travel
and hospital visits.
Standard taxi services can also be important to passengers with limited mobility and other disabilities,
such as the vision impaired, elderly and other vulnerable individuals who cannot use WAT services, or
other forms of scheduled or semi-scheduled public transportation services.23
WAT passengers
WATs provide 24/7, point-to-point service for passengers with various disabilities who use wheelchairs,
and for whom other forms of travel may not provide an adequately accessible, safe or convenient
transportation experience.
As an essential community service, WATs are subject to regulation and standards24 for services to
promote efficient supply and service quality. For example, WAT drivers are trained to load, secure and
unload passengers, and assist with fare transactions.
WAT passengers have greater risks during transport compared to other passengers due to limited
mobility or other incapacities. From initial discussions as part of the Review,25 the Government
understands that people with disabilities use taxi services because the regulated nature of the services
means they are reasonably assured that the driver is a reliable person of good character, who has
undergone appropriate training. Further, in the event of misconduct or poor service, passengers are
supported by a complaints system.
Discussion Paper 23
The WCBS is operated under a contract and funded by the ACT Government. This was implemented
following recommendations of the 2010 ACT Taxi Industry Review. The WCBS plays a critical role in the
accessibility of passengers with disabilities to medical and commercial services, family, and the broader
community.
Hire cars
The regular private hire car industry is relatively small in the ACT and comprises 38 vehicles that
are owned, managed and driven by 22 operators. Hire cars typically offer higher levels of customer
service in more prestigious or luxury vehicles. The restricted hire cars operate to provide transport for a
weddings and formals only.
Hirings are through pre-bookings only, which are often made in advance (hours or even days). Hire
cars may not obtain business on ranks or by hailing and cannot tout for work. Drivers obtain business
through reputation and repeat business, and to a lesser extent, through hire car booking systems,
which are not regulated.26
Fares for hire car services are normally negotiated in advance, and payment is usually made at the time
of the booking.
26. RTA
Application of regulation
Regulation applies to networks, operators, drivers and vehicles that are used to transport passengers
under a contract for payment where the service is provided on a road or other area to which vehicles
have public access. In addition to classes of taxis and hire cars, vehicles include buses and demand
responsive transportation (DRT).
Public-passenger services regulations require the operator of the service to seek accreditation to
provide the service, and are regulated under the Road Transport (Public Passenger Services) Act 2001 and
the Road Transport (Public Passenger Services) Regulation 2002.
The ACT Government, through regulation:
• determines taxi supply, service-level standards, and compliance and enforcement activity
• administers service agreements
• accredits and licenses all public vehicles and drivers
• accredits taxi networks and monitors their compliance
• monitors and reports on public-passenger service providers’ compliance with disability standards
through the 2013-2018 Action Plan for Accessible Public Transport in the ACT
• regulates taxi (and government-owned bus service) fares.
Discussion Paper 25
Study B: Disability standards
The Disability Standards for Accessible Public Transport 2002 (Cth) (DSAPT) requires that certain
public-transportation vehicles operating across Australia, which include standard and WAT taxis,
provide equivalent response times to passengers with disabilities. Hire cars are not subject to
DSAPT.
The ACT Government assists public transportation service and infrastructure providers to comply
with the DSAPT requirements through the 2013–2018 Action Plan for Accessible Public Transport in
the ACT.27, 28
Examples of standards referred to in the DSAPT include:
• identification of taxis in the form of labels in Braille on the side of taxi vehicles
• line-of-sight features in standard taxis
• accessibility features of taxi ranks
• response times of WAT service, as it compares to the response times of standard taxi service.
For WAT hirings, there are regulatory requirements on networks (regarding booking services) and
drivers (regarding acceptance of jobs) to provide for the timely provision of services.
The introduction of ridesharing to the ACT could see the introduction of a fleet of vehicles of
varying makes and models providing public transport services.
In undertaking the Review, the Government is considering the alternative service models provided
through booking and payment apps and ridesharing, and how they can be accommodated while
continuing to meet the objectives of the regulatory approach.
The following table outlines the range of regulatory requirements used by the ACT Government.
Further detail on regulatory requirements is provided at Appendix C.
As part of the Review, the Government is conducting a controlled sample survey of Taxi Subsidy
Scheme (TSS) recipients. Broadly, the survey will gauge the experiences that people with disabilities
have with the ACT’s taxis, hire cars and related infrastructure. The survey will also seek comment on the
level of compliance with DSAPT requirements.
Driver safety • Passenger conduct requirements • Passenger conduct requirements • Passenger conduct requirements • Passenger conduct
• Safety camera operating • Safety camera operating standards, • Safety cameras (and operating requirements
standards, if installed if installed standards) • Safety camera
• No regulatory requirements, but • No regulatory requirements, but • GPS tracking operating standards,
networks typically require that networks typically require that if installed
• Duress alarms
affiliated taxis have: affiliated taxis have:
• Business plan
-- safety cameras -- safety cameras
-- GPS tracking -- GPS tracking
-- duress alarms -- duress alarms
Consumer • Regulated fares and metering • Regulated fares and metering • Regulated fares and metering • Operator and driver
protection • Operator and driver service • Operator and driver service • Operator and driver service service and reporting
requirements requirements requirements requirements
• Reporting requirements • Reporting requirements • Reporting requirements
• Network performance standards • Network performance standards • Performance and disciplinary
program
Sustainable and • Number of licences restricted • Number of licences restricted (to 26) • Subject to ITOP • No limit on the
efficient supply (to 332) -- periodic release of Government- number of licences at
-- periodic release of Government- owned licences at a price of $100 a price of $4,600
owned licences through a ballot or $1,000 (for existing taxis)
system at a price of $20,000 • Subsidies for users and operator/
-- ‘perpetual’ licences traded in driver incentive payments
private market • Network financial capacity
• Network financial capacity • Network service requirements
• Network service requirements
Source: RRT; Road Transport (Passenger Services) Act 2001; Road Transport (Passenger Services) Regulation 2002; RTA
Are the current standards appropriate to the types of risks posed in the taxi and hire car industry today?
What elements of these standards should apply to alternative business models?
Discussion Paper 27
Other regulation
Other regulatory requirements that are not specific to public-passenger transport may also apply. The
ACT Government expects that parties would comply with applicable laws such as those for work health
and safety, and tax purposes.
With regard to taxation, all taxis and hire car operators and drivers are required to register for GST
regardless of turnover. The Australian Taxation Office (ATO) has advised that it is considering the tax
implications of ridesharing as part of a broader review of shared services and collaborative consumption.29
Work health and safety requirements apply under law in respect to employers/persons conducting
a business or undertaking. For taxis and hire cars, various elements are dealt with under specific
regulatory requirements about passenger and driver safety (see Table 4). The Review will consider
similar implications with the operation of ridesharing.
Networks
For networks, direct regulatory costs include application fees (of currently $600) to establish/reapply for
accreditation every six years. There is also an annual fee of $100 per car for each affiliated taxi.
To be accredited taxi networks must provide a 24/7 service, which may result in operating costs over
periods when a non-regulated business might consider shutting down. There are also compliance and
reporting costs associated with their operations.
Can the new models support around the clock service? Would new models of providing services have
different requirements to taxi networks, such as is currently the case for
hire cars?
Operators
Taxi operators (operating standard taxis) are subject to a range of Government-regulated and related
network costs:30
• vehicle registration fees, including Compulsory Third Party (CTP) insurance (approximately $10,000
per year)
• taxi network fees (approximately $20,000 per year)
How can we have a model that allows innovation but also recognises (historic) regulatory costs borne
by current participants?
For WATs, there are additional specialised vehicle costs involved with the transport of disabled
passengers. Depending on the set up these can vary from $15,000 to $35,000. In recognition of this,
annual licence fees are substantially below that for standard taxis at $100 (dual WAT) or $1,000 (single
WAT). There are also incentives provided for drivers and operators including, for example, on call and on
time payments.
How can we maintain or improve service standards to those with a disability or vulnerable people under
the new models?
For hire car operators, annual licences costs are $4,600, with registration (including CTP) of around
$3,300. Compliance costs also apply.
All operators (taxi and hire car) are required to take out public liability insurance on their vehicles, with
some operators also opting to hold comprehensive vehicle insurance.
31. T he upfront investment for holders of perpetual licences will vary; for example recipients of early exservicemen and seniority scheme
allocations receive free or highly subsidised plates. See Appendix D. Others may have also recouped the cost of their investment through
returns on their plates over time.
32. Nicholls, Evaluation of the Current State of the ACT Taxi Industry, p. 15.
Discussion Paper 29
Study C: Comparing costs
There may be marked differences in the costs facing taxi operators and drivers, and ridesharing
drivers. If it is assumed that rideshare operators/drivers will operate with no additional regulatory
burden, there will be material differences arising from the costs of taxi network affiliation and
annual public-passenger licence requirements. While ridesharing drivers do not incur annual
network fees, they do face costs through fare-revenue payments to transportation network
companies (TNCs), such as Uber.
Table 5 highlights major costs items faced by the different on-demand transportation modes. It
is important to note that costs can differ significantly between individual taxis and ridesharing
vehicles, depending on their trip activity, vehicle-financing arrangements and other factors.
Costs can also vary based on the different regulatory requirements for types of taxis – standard
versus WAT and independents – and for hire cars. Similarly, insurance premiums vary significantly
depending on the type of public-passenger vehicle (and other factors, such as insurance claim
history). The insurance costs for vehicles used for rideshare purposes are also expected to vary
from those applied to private vehicles.
Table 5: Comparison of major cost items – Taxis, hire cars and ridesharing
Booking services
A party providing booking services for taxis is required to be an accredited taxi network (except for
WCBS). A provider of booking services for hire cars is not regulated.
Ridesharing owner-drivers
Ridesharing services are not operating in the ACT. Rideshare owner-drivers are, therefore, not currently
subject to regulation-related fees and charges, as they are not permitted to operate in the ACT.
Other parties
Costs can also be incurred by other parts of the economy that rely on on-demand transport. Effective
and efficient services can deliver benefits and costs to the broader economy. These rely on appropriate
market environment, including regulatory settings.
Current arrangements for capping supply of taxis may affect the industry’s ability to meet supply needs
to events or businesses. For example, the Canberra Airport has made repeated public calls, based
on examples of transport delays impacting on their business, for additional taxi supply to service its
passengers, particularly during peak periods.35
Other incentives for taxis to service the airport or other parties/events could be provided with
additional fare allowances. Currently, fare rates stand at $9.20 before a taxi leaves the airport. Different
passenger types may have different levels of sensitivity to such charging levels. For example, business
passengers who can claim expenses for tax purposes may be less concerned than families or tourists.
Are there regulation-related costs that could be revised, while maintaining equity and a level playing
field, in a new on-demand transport environment? What is needed to allow a smooth transition to a
new environment?
33. Road Transport (Driver Licensing) Public Vehicle Driver Training Course Approval 2015 (No 1),
http://www.legislation.act.gov.au/ni/2015-45/default.asp
34. Road Transport (Driver Licensing) (Hire Car Training Course) Approval 2010 (No 1),
http://www.legislation.act.gov.au/sl/2000-14/n_li.asp?dispmode=current
35. Canberra Airport has provided to the Review examples of third-party commentary from airport passengers noting the significant delays
that they have experienced waiting for taxis.
Discussion Paper 31
5. T he evolving on-demand transport
environment
5.1 How do taxi and hire car booking and payment apps work?
Taxi apps
Taxi booking and payment apps enable passengers to book and pay electronically for a ride with a
participating traditional taxi in any local Australian market.
The app matches passengers with a nearby taxi driver who is registered with the app. Once the trip is
complete, the passenger pays the fare using the app. The local taxi fare structure is utilised for the ride
and there may be additional charges levied by the booking/payment service itself.
Booking and payment apps can be administered by traditional taxi networks or a third-party provider.
Examples of third-party providers of a taxi-booking app include goCatch, an Australian company, or
uberTAXI, the taxi-app sub-brand of Uber.
37. Uber, ‘Legal’, https://www.uber.com/legal/usa/terms. The status of drivers as ‘independent contractors’ is subject to legal action under
state labour laws in the United States of America. See: James Niccolai, ‘Uber and Lyft Fail to Convince Judges their Drivers are Merely
“Contractors”’, CIO, 12 March 2015, http://www.cio.com.au/article/570193/uber-lyft-fail-convince-judges-their-drivers-merely-contractors/
38. Jordon Condo, Head of Public Policy Asia Pacific, Uber, letter to Professor Ian Harper, Competition Policy Review Secretariat, 17 November
2014, p. 2, http://competitionpolicyreview.gov.au/files/2014/12/Uber.pdf
39. Uber, ‘Help’, https://support.uber.com/hc/en-us/articles/202290118-Can-I-request-a-particular-driver-
40. Uber; D Flynn, ‘Travel Gear: Uber Chauffeur Drive Service’, Australian Business Travel, 18 March 2014, http://www.ausbt.com.au/uber-
chauffeur-drive-service
Discussion Paper 33
Different service offerings from technology providers
TNCs can provide differentiated services, not just ridesharing. Uber, for example, provides:
• uberX – ridesharing with ‘everyday’ cars
• UberBLACK – third-party booking and payment app for higher-end sedans
• uberTAXI – third-party booking and payment app for taxis.41, 42
Another TNC, Lyft,43 provides differentiated rideshare offerings including:
• Lyft – service for one to four persons
• Lyft Plus – a six-passenger ride
• Lyft Line – sharing rides with others going the same way, for a lower price.
The goCatch TNC provides ‘taxi booking app’ services.44
Fare structure
Fare setting for the ridesharing model can be comprised of both structured and dynamic pricing.
Structured pricing involves a fixed fee and a set rate based on distance or time travelled.
Dynamic pricing allows fares to be further determined by the level of demand and supply at any
point in time of day or night. The process involves an algorithmic calculator determining the fares for
geographic locations. If there is a higher level of demand in a particular area the fare will increase to
attract vehicles resulting in increased supply to meet demand.45 As demand is met or declines, fares will
reduce.
Under dynamic pricing fares can shift substantially in periods of high demand; for example, during New
Year’s Eve in a major city centre. Large surges in price have been subject to public criticism and the level
of dynamic price uplifts is subject to maximum limits in some jurisdictions.46
Ratings system
The driver and passenger ratings systems of TNCs can be used to promote passenger service and driver
workplace outcomes. Poor ratings or complaints can result in termination of driver or passenger access
to TNC services. The termination process may vary between TNCs but may include a series of warnings
and, for drivers, training opportunities to address performance. Disputes regarding termination may be
subject to applicable laws and contract arrangements.
47. RTA.
48. IPART, p. 2.
49. IPART, p. 18.
50. T he Australian Government Competition Policy Review Draft Report, September 2014, Canberra, p. 30, http://competitionpolicyreview.gov.au/
files/2014/09/Competition-policy-review-draft-report.pdf
Discussion Paper 35
Overseas
Internationally the approach to rideshare is similarly mixed and shifts between review and
amendment of the regulatory settings to allow for innovation and competition, to bans on
rideshare activity.
• On 20 January 2015 New Zealand’s Associate Transport Minister announced a review of the
relevant regulatory framework to be completed by mid 2015.51
• In Washington DC, United States, ridesharing operates legally following the passing of the
Vehicle-for-Hire Innovation Amendment Act of 2014 (US),52 subject to a range of regulatory
requirements including:
• Safety requirements – driver character, licensing and training, vehicle specifications on
age, access and branding, and liability insurance.
• Dynamic pricing – allowed for taxi trips booked through digital apps.
• Disabled access – no surcharges for the disabled, and rideshare drivers must undergo the
same training as taxi drivers on assisting disabled passengers.
• Enforcement and compliance – rideshare companies to verify compliance, zero-tolerance
policies on the use of alcohol and drugs, and discrimination.
• Levy – rideshare companies contribute directly to the cost of regulating by submitting
1 per cent of gross fares to the District to defray costs.
• Singapore’s public transportation regulator, the Land Transport Authority (LTA) announced
in November 2014 that, beginning in the second quarter of 2015, it would introduce ‘a basic
regulatory framework’ to enable third-party taxi apps to operate.53
• France, Spain and the Netherlands are understood to have banned rideshare services.54 The
reasons for placing temporary or permanent bans on ridesharing vary among jurisdictions. In
France, for example, a ban was placed because insurance arrangements for ridesharing were
deemed inadequate.55
51. http://www.stuff.co.nz/business/industries/65226952/uber-takes-aim-at-governments-outdated-regulations.
52. L Owsiany, ‘DC Council Approves Pro-Uber Legislation’, The Hoya,
53. L and Transport Authority, ‘New Regulatory Framework for Third-Party Taxi Booking Services to Protect the Safety and Interests of Commuters’ ,
press release, Singapore, 21 November 2014, http://www.lta.gov.sg/apps/news/page.aspx?c=2&id=a63138fa-6cf7-4fa4-8979-a1d1613b9ae5
54. N Lomas, ‘France Bans UberPop Starting January 1’, TechCruch, 15 December 2014, http://techcrunch.com/2014/12/15/uberpop-non/
55. Lomas, ‘France Bans UberPop’.
56. Megan Doherty, ‘Booking App Sparks Taxi Turf War’, Canberra Times, 27 September 2013, http://www.canberratimes.com.au/act-news/
booking-app-sparks-taxi-turf-war-20130927-2ui45.html
57. Condo, letter, p. 2.
58. B Tan, ‘The Rise And Rise Of Uber In Australia’, Gizmodo Australia, 16 January 2015, http://www.gizmodo.com.au/2015/01/the-rise-and-rise-
of-uber-in-australia/
59. D Lewis, ‘Uber Offers to Share Transportation Data, Create Jobs in Exchange for Regulation in Australia’, ABC News, 13 February 2015,
http://www.abc.net.au/news/2015-02-13/uber-offers-to-share-travel-data-in-exchange-for-regulation/6091730
Discussion Paper 37
6.2 D
o the features of the new models support consumer
outcomes?
Safety features
The new models present a range of features that are comparable to currently regulatory requirements
for taxis and hire cars, and some new features that may reduce risks involved with on-demand transport
activity.
Information
Smartphone apps offer a level of information, transparency and service above that available through
traditional rank and hail or telephone bookings. This increased information can affect safety and
consumer protection outcomes. For example, increased knowledge about parties to the transaction
(including the ability to rate passengers and drivers) and route details (including GPS tracking) can
reduce incentives for misconduct. This also provides reliable data directly to passengers on the
effectiveness of particular services. The RTA is already using such information to monitor WAT services.
Accordingly, the need for current requirements such as certain branding elements, in-car driver
identification or security cameras may be affected as potential harms are addressed by alternate means.
The availability of personal information creates the need for a responsible approach to the handing of
personal details. Privacy and access arrangements require management, along with the application of
appropriate review and complaint processes.
Change brings a need for education of the affected parties. New service providers and industry
associations are providing a range of information on the use of services. Consumers and industry
participants require particular knowledge to support change. For example, people with disabilities
may require targeted information to enable them to use these services effectively and minimise their
exposure to harm.
Driver standards
The ridesharing model may incorporate a range of features designed to address consumer and public
safety concerns. TNCs can impose a range of direct standards on the rideshare drivers that they connect
with passengers. The exact elements may vary between TNCs.
Drivers may be subject to age, character and driver experience requirements as evidenced by drivers
having to hold:
• a drivers licence
• comprehensive insurance that seamlessly covers ridesharing activity
• a clean criminal record
• a strong driving record
• be a minimum age of 21 years.
TNC standards for driving and criminal records vary between jurisdictions and are often shaped by the
regulatory authorities of those jurisdictions.
Insurance
Insurance in the event of incident is regulated for taxis and hire cars. Some booking app services and
rideshare services require and provide insurance solutions.
Vehicle condition
Vehicles may be also be required to be assessed as being in a roadworthy condition through
maintenance and condition requirements including with regard to the vehicle’s age. In Australia, Uber
vehicles are subject to regular inspection and cannot be more than nine years old.62
Risk factors can be determined by comparing these requirements with the various regulatory and
industry requirements that are applied to taxis and hire cars.
Driver safety
For drivers, the use of cashless payments can support driver safety. TNCs may also prohibit access to
booking services for customers that are reported to be violent or abusive. The times of service and
operating profile of rideshare drivers may be different from taxis and, therefore, pose and be subject to
different risks.
Consumer outcomes
Passenger ratings and access to reviews can incentivise a consumer focus. With TNCs, if a driver
falls below a certain quality level, they may be removed from the booking service. The prospective
passenger has the opportunity to read that driver’s passenger reviews to see if they wish to accept
a ride from a particular driver. Compliance and complaints services operated by TNCs also support
consumer outcomes.
Vehicle specifications, such as car size and type, ensure a level of comfort for a specified number of
passengers.
Competition effects
The mix of an ability to shop around through app-based booking services and competition (particularly
if additional supply is available through rideshare) could promote price and service improvements in
the public-passenger transport industry, and provide broader economic benefits. Incentives like ratings
schemes diminish the need for consumer protection via regulated price and service requirements.
Vulnerable users
Vulnerable users, however, may still require additional regulatory support, such as priority bookings or
specialised driver training because of potential limitations on their ability to access services and a need
to ensure service levels.
Are the features of the new models supporting customer experience and safety in practice?
60. Uber, ‘Uber’s Letter to the Transport Ministers of Australia’, 6 November 2014, https://blog.uber.com/Transport-Minister-Letter
61. Insurance Council of Australia, ‘Car Ride Share Warning’, media release, 3 June 2014, http://www.insurancecouncil.com.au/media_release/
plain/256
62. Uber
Discussion Paper 39
6.3 Is a level playing field provided by regulatory standards?
Regulatory requirements should allow for effective competition and consistent management of risks
associated with public safety, access and consumer protection.
Should new service delivery methods be treated differently to taxis because they operate within the
booked market only?
Independent taxis
The ITOP has been operating with a limited number of taxi operators. The operator viability component
of the trial may be complemented by additional means to obtain business through alternate booking
services.
Supply
The rideshare model opens up the issue of market supply. The supply of taxis is subject to a regulated
cap on numbers, whereas hire cars are not.
Supply levels and related lease fees and income expectations affect trade in perpetual taxi licence
plates.
Should supply restrictions be retained in the delivery of rank and hail services? If so, how should future
supply caps and releases be determined?
Should prices be regulated or monitored for new ways of providing services? If there is effective
competition in booked services, should maximum prices be removed for this market? Is there a need to
maintain maximum prices in the rank and hail market?
63. A Fels, Final Report - Customers First: Service, Safety, Choice, Taxi Services Commission, 2012, p. 208, http://www.taxi.vic.gov.au/taxi-reform/
about-taxi-and-hire-car-reforms/taxi-industry-inquiry
64. Fels, Final Report, p. 208.
65. Fels, Final Report, p. 208.
Discussion Paper 41
National factors affecting surcharge arrangements
Several recent developments have occurred with respect to electronic surcharge levels in other
jurisdictions.
Victoria
In February 2014, Victoria introduced legislation that capped the amount of surcharge taxis (not hire
cars) could charge, at 5 per cent. This initiative was undertaken in response to a finding by the review of
taxi services that assessed an amount of 10 to 11 per cent as too high (discussed further below).
Commonwealth
The Australian Competition and Consumer Commission (ACCC) and the Reserve Bank of Australia (RBA)
have policy interests in electronic payment surcharges through, respectively, national competition
legislation and credit card standards.
• In September 2010, the ACCC took Cabcharge to the Federal Court for misuse of market power. The
Federal Court imposed a fine on Cabcharge of $14,000,000 for contravening s. 46 of the then Trade
Practices Act 1974 (Cth).67
• On 18 March 2013, the RBA completed a review into card surcharging practices and introduced a
number of changes which enabled card payment schemes (such as Visa and MasterCard) to limit
surcharges to a reasonable cost of acceptance.68
• The Victorian taxi inquiry considered that the RBA development was promising, however, it also
concluded that financial institutions have limited incentives to enforce rules in the taxi sector.69
66. S Drummond, ‘Cabcharge Rival Live TaxiEpay May Sue NSW and Victoria Over New Taxi Payment Laws’, Sydney Morning Herald, 12
September 2014, http://www.smh.com.au/business/cabcharge-rival-live-taxiepay-may-sue-nsw-and-victoria-over-new-taxi-payment-laws-
20140912-10g1td.html
67. Now the Competition and Consumer Act 2010 (Cth).
68. Reserve Bank of Australia (RBA), ‘Reforms to Payment Card Surcharging’, March 2013, http://www.rba.gov.au/payments-system/surcharging/
index.html
69. Fels, Final Report, pp. 208–09.
Should the ACT Government be acting to reduce surcharging levels? Would the new models provide
downward pressure on current surcharges? Should the ACT Government action remain in place
permanently?
70. A Carey, ‘Taxi Fares to Fall as Card Surcharge is Halved’, Age, 2 January 2014, http://www.theage.com.au/victoria/taxi-fares-to-fall-as-card-
surcharge-is-halved-20140102-307rl.html
71. RBA, ‘Reforms to Payment Card Surcharging’.
Discussion Paper 43
6.5 D
o the new on-demand models support broader public
transport integration?
With innovation in on-demand transport services, the ACT Government is exploring ways to leverage
change to support improvement in other modes of public transport.
Buses
Taxi ranks are located within the vicinity of bus stops and major hubs. This arrangement may present
an opportunity to integrate taxi services with scheduled bus services in certain scenarios. One such
integration scenario is being explored in the BusPlus trial program.
BusPlus involves the development of a demand-responsive hub and spoke system in which taxis feed
passengers to and from a trunk system of scheduled bus services. On arrival by bus at a hub facility,
passengers are met by a taxi that ferries them to the suburban bus stop closest to their destination.
Passengers would pay for the trip electronically.
The ACT Government is working with National Information Communications Technology Australia
(NICTA) to introduce a trial of the BusPlus system into a select area of the ACT in the latter part of 2015.
Preliminary discussions have been held with the taxi industry and other stakeholders.
The BusPlus program might present an opportunity to efficiently utilise taxi capacity during traditional
off-peak hours. The Review will be coordinated with the development of the BusPlus initiative.
Capital Metro
Capital Metro is Canberra’s light rail project and an important part of the ACT Government’s vision to
deliver a truly sustainable and creative city as set out in the Canberra Plan – Towards our Second Century
(2008).
The first stage of Capital Metro is a 12-kilometre route running from the city to Gungahlin, along
Northbourne Avenue and Flemington Road. It will deliver high-quality, reliable and frequent public
transport down one of Canberra’s busiest corridors. The Light Rail Master Plan is underway to identify
the city-wide network and roll out of future stages. Forward-looking public transport infrastructure
is critical to the future growth of Canberra. Its unique town-centre design, along with a projected
population growth to 600,000 people by 2050, ideally lends itself to a fast, efficient and reliable light rail
system.
The first stage of Capital Metro will lay the foundation for a city-wide integrated public transportation
network with light rail as its spine. It will be complemented by a feeder bus network and will support
cycling and pedestrian access.
It is estimated that approximately 3,500 direct and indirect jobs will be supported during the
construction phase of this project.
What further opportunities are there with the emerging business models and existing taxi services to
support greater integration of transport services?
Canberra Airport
Currently transport services to and from the airport comprise taxis, hire cars, Airport Express Bus shuttle
services and private vehicles.
Taxi services have a dedicated rank at the airport, with commissionaires to direct passengers to waiting
vehicles. An additional charge is included in taxi fares from the airport when the commissionaires are
present, to pay for commissionaire services. A parking facility and waiting lounge close to the arrivals
terminal is also available to facilitate airline passenger pick up. Canberra Airport has advised that this
area could potentially be used for rideshare passenger pick-ups.
What further opportunities exist with the emerging business models to support greater integration of
interstate services, in particular for scheduled services? Could the new models work with existing facilities
and infrastructure? (Competition) What are the implications of the new business models for cross-border
taxi services?
Discussion Paper 45
7. Way forward
The ACT Government seeks the community’s views on the issues presented in this paper. Responses
provided will be considered in the development of a package of possible reforms, as outlined in
Section 1.3.
Taxis and hire cars provide services that are integral components of the Territory’s public transport
system. For some users, taxis also represent a trusted essential service that allows them to access vital
support services and engage with the broader community.
The ACT Government recognises that changes may be needed to regulatory settings to allow for
innovation and competition in the taxi and hire car market. At the same time, risks to public safety and
access, consumer protection and the ongoing provision of services by industry (on a level playing field)
need to be addressed.
Other taxi and hire car markets in Australia and around the world are experiencing significant
new entry to markets and consumer take up. Regulators are recognising the new business models as
disruptive and a driver of change in traditional taxi markets.
As outlined in this Paper, in the ACT market there are different requirements in place between taxis
and hire cars. Taxis provide a 24/7 operation that includes bookings and rank and hail work off the street
with regulated fares. Hire car business is based on bookings through advertising and reputation with
negotiated fares. In addition, independent taxis operate without network affiliation.
The new app-based business models involve on-demand passenger booking and payments. To a
degree, these services are already in use in the ACT through existing network providers and taxi and
hire car operators. There is no current rideshare activity.
The level of information provided through the app-based booking models for identification and
behaviour purposes raises the opportunity to revise regulation on public safety and consumer
protection risks related to the parties to the transaction of the services. As evidenced through ITOP,
network affiliation need not be an automatic requirement to ensure consumer outcomes.
Rideshare provides an opportunity for competition (and additional supply) in the market. Competition
protects consumers who are able to shop around for price and service. As evidenced in other
jurisdictions, regulatory requirements can be adjusted to allow for rideshare while addressing risks.
The impact on access to services by the vulnerable and people with disabilities in these business
models remains to be investigated further. The ACT Government currently ensures service provision to
this segment of the market through regulation, subsidies and funding of WCBS.
For drivers (character and training) and vehicles (condition and insurance), existing requirements
will need to be considered against the operating conditions of the business models. Rank and hail
services could see reduced risks through greater use of cashless payments services, but do not benefit
from the greater transparency that is available through new booking services.
Discussion Paper 47
Appendix A – Terms of Reference
A.1 Purpose
To evaluate whether there are opportunities to reform taxi and hire car regulation, including having
regard to the emergence of digital public transport booking services and their potential ability to
increase competition and provide differentiated transport services to the public.
Matters to be considered as part of the review include:
• the entry to the marketplace of digital alternative-booking regimes;
• the safety of passengers, drivers and vehicles, and the community;
• efficient and sustainable supply to the marketplace (including for special transport needs) and
synergies with other modes of public transport;
• the level of surcharge on electronic taxi fare payments (including surcharges applied by other
jurisdictions across Australia);
• compliance among existing and new drivers and operators with the Disability Standards for
Accessible Public Transport 2002 (Cth).
The review will also consider matters arising from:
• a report prepared for the Canberra Taxi Industry Association (CTIA) in June 2014, entitled An
Evaluation of the Current State of the ACT Taxi Industry (the CTIA Report); and
• the Commonwealth Government’s Competition Policy Review Draft Report.
A.2 Responsibilities
An inter-directorate working group chaired by Chief Minister, Treasury and Economic Development
Directorate and including Justice and Community Safety Directorate will oversee the review.
Consultation will involve initial industry stakeholder meetings, the development of a discussion paper,
and broader community engagement to commence in early to mid-2015.
The working group will report to Government during the latter half of 2015.
Background on the Review can be seen at this link: http://www.cmd.act.gov.au/policystrategic/
regreform/current
WATs
Prior to the 2010 Review, stakeholders were concerned about the quality and timeliness of the
networks’ response to WAT hirings and the capacity of WAT vehicles to meet demand. The ACT
Government contracted a third party, 13WATS, to provide WCBS. Complaints about the service declined
markedly after these changes were made and the number of hirings increased dramatically in the first
two years of operation.75
From July 2011, policy required that new or replacement WAT vehicles would be fitted to accommodate
two or more wheelchair passengers.76
Finally, paper vouchers used to facilitate payment for WAT service through the Taxi Subsidy Scheme
(TSS), were replaced with electronic payment cards. The electronic cards have helped significantly to
reduce fraudulent use of the TSS, and the record keeping burden of the fare payments process.
Standard-taxi fleet
After the Review, 41 new and surrendered non-transferable Government licences were issued. This
has contributed to a decline in peak-hour wait times and complaints about wait times. Today, the RTA
receives few complaints about peak-hour wait times.77
72. ACT Government, ACT Taxi Industry Review Discussion Paper, Department of Territory and Municipal Services (TAMS), 2010.
73. ACT Government, ACT Taxi Industry Review Discussion Paper.
74. ACT Government, ACT Taxi Industry Review Discussion Paper.
75. RTA.
76. RTA.
77. RTA.
Discussion Paper 49
Peak demand service responsiveness
An airport commissionaire service was established at Canberra Airport to organise the queuing and
distribution of passengers to waiting taxis. This has helped to improve the efficiency of passenger
movements from the airport and lower overall wait times.
Independent taxis
The Government implemented the ITOP to increase passenger choice for on-demand service, and
provide operators with the opportunity for increased business viability and a choice of building a
business independent of a network affiliation.
ITOP, which was launched in March 2012, ran for three years and included four independent taxi
operators. The RTA advises that the quality of service from the operators has been strong, due to
operators driving their taxis and being able to expand their business by providing good customer
service.
A decision on the permanent introduction of independent taxis operators in the ACT has been delayed
pending the outcomes of this Review. The existing four independent operators have been permitted to
continue as independents until a Government decision is made.
Date Action
1999–2000 National Competition Policy Review of ACT Taxi and Hire Car Legislation.
2002 Implementation of legislation providing requirements for taxi operator accreditation and taxi
network accreditation.
Introduction of standards for security cameras in taxis, taximeter standards and taxi network
performance standards.
Introduction of cross-border taxi arrangements which allow Canberra and Queanbeyan taxis to
provide seamless services in the Canberra/Queanbeyan region.
Independent Competition and Regulatory Commission (ICRC) Review of the Future Direction of
the ACT Taxi and Hire Car Industry.
2004 The Road Transport (Public Passenger Services) Amendment Act 2004 gave effect to the
2002 Government response to the ICRC review of taxi and hire car industry.
2006 Introduction and implementation of legislation providing for nontransferable taxi licences.
Six-year licences leased from Government.
2009 Investigation of viability and continuance of Nightlink scheme, including a new fare structure.
The Nightlink scheme was subsequently discontinued in December 2009.
78. ACT Government, ACT Taxi Industry Review Discussion Paper, Appendix C.
Discussion Paper 51
Appendix C – ACT Government
regulation
C.1 Safety and access requirements
A suite of road transport legislation supports the safety of passengers, drivers and members of the
community in the ACT.
79. ACT Government, ‘Becoming a taxi operator’, fact sheet, RTA, Canberra, p. 2.
80. RTA.
81. RTA (as at 13 March 2015).
82. Road Transport (Driver Licensing) Public Vehicle Driver Training Course Approval 2015 (No 1).
• vehicle manufacturer’s maintenance and service standards, and with vehicle inspection after a
predetermined number of kilometres83
• requirements laid out in the Road Transport (Vehicle Registration) Regulation 200084 which prohibits a
vehicle six years or older from obtaining first registration as a taxi and taxi registration on a vehicle
that has been in use as taxi for six years or more and/or is eight years old or older
• requirements laid out in the Road Transport (Public Passenger Services) Regulation 2002,85 which
require operational air conditioning, child-restraint anchorages, a roof-top taxi sign and approved
network livery; the taxi must be inspected once per year by the RTA.
Taxi vehicles are also required to be fitted with identifying approved signage/livery of the taxi
network with which the operator is affiliated.
Insurance
Vehicles registered as taxis must have ‘taxi vehicle class 6’ public-vehicle insurance as well as a compulsory
public-passenger vehicle policy for at least $5,000,000 for the vehicle. The insurance policy must be issued
(or renewed) by a corporation authorised under the Insurance Act 1973 (Cth). The policy must insure the
accredited operator of the public-passenger vehicle against liability in relation to damage to property
caused by, or arising out of the use of the vehicle anywhere in Australia (whether or not on a road or
road-related area).86
Hire cars
Drivers and operators
A hire car driver must obtain an H-condition on their driver licence and hold a Public Vehicle Driver
Authority Card (PVDAC). To do this they must:
• be 20 years of age;
• be an Australian citizen, or have permanent resident status or a working-status visa;
• have held a full Australian driver’s licence for at least one year;
• undergo a Police Character Check;
• undergo a Commercial Drivers Health Assessment;
• pass an approved Hire Car driver training course; and
• successfully complete a practical driving test conducted by an approved RTO.87
Driver training consists of a one-day course that covers defensive driving, the planning and navigation
of routes, and customer service skills.88 The course costs about $500. Language training is not required
of hire car drivers.
If a hire car operator employs a casual driver, he must keep a record of the drivers contact information,
licensing status and hire car driving activity.89
83. Road Transport (Public Passenger Services) Regulation 2002, s. 93, p. 96, http://www.legislation.act.gov.au/sl/2002-3/default.asp
84. Road Transport (Vehicle Registration) Regulation 2000, s. 32B, p. 25, http://www.legislation.act.gov.au/sl/2000-12/default.asp
85. oad Transport (Public Passenger Services) Regulation 2000, ss. 04–07, pp. 104–07.
86. Road Transport (Public Passenger Services) Act 2001, s. 111.
87. RTA.
88. Sutton Road Training Centre, Transport Industry Skills Centre (TISC), https://www.suttonroad.com.au/index.php/catalog/product/view/
id/66/s/hire-car-operator/category/4/
89. Road Transport (Public Passenger Services) Regulation 2002, ss. 182, 183.
Discussion Paper 53
Vehicles
Hire car vehicles must be maintained in accordance with:
1. the vehicle manufacturer’s maintenance and servicing standards, and with vehicle inspection after
a predetermined number of kilometres; and
2. requirements outlined in the Road Transport (Vehicle Registration) Regulation 2000 that the hire car
must be inspected once per year by the RTA.90
Insurance
Vehicles registered as hire cars must have ‘private hire car class 7’ public-vehicle insurance as well as
a compulsory public-passenger vehicle policy for at least $5,000,000 for the vehicle. The insurance
policy must be issued (or renewed) by a corporation authorised under the Insurance Act 1973 (Cth). The
policy must insure the accredited operator of the public-passenger vehicle against liability in relation to
damage to property caused by, or arising out of the use of the
vehicle anywhere in Australia (whether or not on a road or road-related area).91
Conduct
Driver and passenger conduct are subject to regulatory requirements under the Road Transport (Public
Passenger Services) Act and Regulation.
For taxi operators and drivers, regulations include:
• cleanliness and operation of the vehicle
• clean uniforms
• no display of offensive material
• orderly behaviour including courtesy and propriety towards every passenger (and certain other
parties)
• assist with loading and unloading of the vehicle.
For passengers, there are restrictions on:
• offensive behaviour
• consumption of food and drink (including alcohol and intoxication)
• carriage of animals (except for those accompanying a person with a disability)
• soiled clothing.
Access
An outline of disability standards is provided at Study B of the Discussion Paper.
Discussion Paper 55
Service quality
Waiting time performance standards are regulated for taxis (as outlined in Table C1). WATs are eligible
for performance incentives with government payments for hirings undertaken within 18 minutes.
Service quality is also related to the conduct requirements outlined in Section C.1 ‘Safety and access
requirements’.
Standard taxis
Monday–Friday:
8.00 am – 10.00 am & 3.00 pm – 5.00 pm 85% of all hirings have a maximum waiting time
85% of all hirings have a maximum waiting time of no more than 10 minutes
of no more than 18 minutes 95% of all hirings have a maximum waiting time
95% of all hirings have a maximum waiting time of no more than 20 minutes
of no more than 30 minutes
WATs
Monday–Friday:
8.00 am – 9.00 am & 2.00 pm – 4.00 pm
85% of hirings involving a wheelchair in a WAT 85% of all hirings have a maximum waiting time
have a maximum waiting time of no more than of no more than 10 minutes
18 minutes 95% of all hirings have a maximum waiting time
95% of hirings involving a wheelchair in a WAT of no more than 20 minutes
have a maximum waiting time of no more than
30 minutes
Source: RTA
Complaints
Industry participants are subject to procedures for customer complaints and dispute resolution as well
as the handling of lost property.
The RTA also maintains complaints services for all passenger services, including taxis and hire cars.
Networks
Networks are required to demonstrate that they have the financial capacity to operate and provide
booking services at all times. They must ensure the use of accredited taxi drivers and vehicles.
Taxi licences
The classes of taxi licences that are issued in the ACT are standard, conditional, restricted taxi licenses
(WATs) and cross-border taxis registered in NSW. The ACT Government applies a regulated cap on licence
supply, as per Table C2. At present, the number of active licences that are held by operators is less than the
regulated cap.
Private perpetual licences – formerly issued by the ACT Government, they are privately owned
and can be bought and sold in the taxi community. Historically, each carries a monetary value that
primarily reflects expectations about the cash flow that will be generated from the taxi it licences.
Other, lesser, factors also affect prices.
The value of perpetual licences will change depending in large part on perceived and actual demand
for taxi travel in the future, and the supply of on-demand transportation to meet demand. Perpetual
licences have, therefore, substantially fluctuated in value over time (see Appendix D). Owners of
this class of licence may experience realised or unrealised investment gains or losses, depending on
industry and economic factors, and when the licences were bought or sold.94
Individuals or entities can hold private perpetual licences as passive investments, and do not have to
own or operate a vehicle.
Transferable Government licences – 10 of these licences were issued in 2006 and they can be
bought and sold among taxi owners. While the plate holders must pay a lease fee to the
ACT Government, some plates have sold at a positive value. This reflects expectations that income
generated from operating taxis over time will exceed the annual lease payments.
Non-transferrable Government conditional licences – these are issued for vehicles that are
wheelchair accessible, but must also carry at least six passengers. These vehicles are not obliged to give
priority to wheelchair passengers.
Non-transferable Government leased restricted taxi licences (WAT licences) – these are
issued to the operators of vehicles that are equipped to carry two wheelchair passengers and must give
priority to wheelchair hirings.96
94. RTA.
95. RTA.
96. RTA.
Discussion Paper 57
Table C2: Types of taxi licences, and authorised caps
As at March 25 2015
Conditional Wheelchair
Ownership Standard
standard accessible
Source: RTA
Note: This excludes 19 cross-border licences issued in NSW that allow their vehicles to operate in the ACT.
Allocating plates
Currently in the ACT a periodic ‘ballot’ system allows the release of taxi licences to industry. This release
occurs on the basis of a formula employed by the Government and developed following the 2010
Review that determines if the supply of taxis matches demand for service.
As plates can be surrendered to the Government by taxi operators who no longer want operate, the
supply of taxis can also vary from the nominated cap on supply. There are currently 44 standard and
seven WAT plates under the cap that can be allocated by ballot.
The Government has proposed a ‘list’ system to release taxi licenses (up to the cap) on an ongoing basis.
The system would enable prospective operators to enter the industry more rapidly and with greater
certainty, provided that they are successfully accredited.
Existing operators and drivers may be impacted by a list system that allows more efficient entry of
competitors to the industry.
The CTIA Report calls for changes to the taxi license release model to more accurately reflect changes
in taxi supply and demand. This call questions the key performance indicators that are used to calculate
required numbers of taxis to meet demand.
Perpetual licences
The licencing of taxis in various forms has been ongoing since the industry began in the 1920s. Present-
day perpetual licences, which number 217, were issued by the Commonwealth, NSW and the ACT
governments until the mid-1990s. They were issued under four general programs:
• allocations to ex-servicemen under the Re-establishment and Employment Act 1949 (repealed in
1959)
• a ‘seniority scheme’ that provided heavily subsidised taxi licenses to long-standing taxi drivers
• balloting to the broad taxi-operator community
• introduction of WATs for people with disabilities.
The first public auction of new taxi licences started in 1990 and four subsequent auctions took place
throughout that decade (1991, 1993, 1994 and 1995).
Historically, these licences have changed hands between passive investors and taxi operators in the
industry. Their trading values have changed over time, and reflect, among other factors, perceptions of
future supply and demand in the taxi industry. An operator can lease or own more than one perpetual
and government leased taxi licence, and some operators lease many.97
97. RTA.
98. RTA.
Discussion Paper 59
D.2 Sales of licenses
Table D1: History of ACT standard perpetual licences ballot and auction prices – 1986 to 1995
Number
Year Method Average price Total revenue
released
July 1986 17 For senior drivers $250 $4,250
Table D2: ACT standard perpetual licences – Purchases and sales since 2004
2004 $240,263 18
2005 $238,093 18
2006 $253,441 20
2007 $286,595 29
2008 $262,375 8
2009 $277,591 11
2010 $294,462 17
2011 $267,142 7
2012 $260,166 6
2013 $257,500 4
2014 $244,900 8
Source: RTA
Discussion Paper 61
62 Taxi Industry Innovation Review
Discussion Paper 63
64 Taxi Industry Innovation Review