Essential Services Commission recommends ‘maximum peak booking charge’ up to $10 on Friday, Saturday nights

TAXI drivers struggling to make a buck in a market dominated by Uber could begin charging a “max peak booking” charge on weekends and public holidays.

Taxi passengers could be slugged with a $10 booking fee if recommendations in a new report are adopted.

Independent economic regulator the Essential Services Commission has recommended Victorian taxis begin charging up to $10 during “maximum peak booking” periods.

The commission published a draft Taxi Fare Review on Tuesday, outlining a number of measures hoped to keep the struggling industry competitive in a market increasingly dominated by ride-sharing app Uber.

The report recommends the charge be capped at a maximum of $10 and be subject to conditions including that the fee is only charged during peak times — including Friday and Saturday nights and on public holidays — and that the customer is informed of the additional fee and given the option to accept or withdraw the booking.

The problem with the status quo, according to the report, is that taxi demand jumps significantly on Friday and Saturday nights but more and more drivers are opting not to work during those periods.

The idea is that drivers will be encouraged to operate during peak periods if there’s more money in it for them.

Uber has already introduced surge pricing, but that works in a different way. Drivers are informed when and where they can charge additional rates depending on demand. In a recent case, one person paid $720 for a ride from Sydney to Blacktown, a 39km drive.

Uber is forcing the taxi industry to change the way it operates. Picture: AP

In Canada, it was worse. Matt Lindsay claimed he paid more than $US1100 ($AU1500) for an hour-long trip on New Year’s Eve.

The commission’s report notes that a new approach is required given increased competition.

“In past taxi fare reviews, a significant emphasis has been placed on estimating typical costs for taxi operators, and setting taxi fares at a level forecast to generate sufficient industry revenue to recover those costs,” the report reads.

“This approach was possible when the taxi industry ran a service facing little competition from alternative service providers.

“ ... we are conscious of the different consequences of setting maximum fares that are too high, compared to fares being set too low.

“With greater competition in the market for booking services, and advances in smartphones technology driving new and innovative booking methods, we believe there is merit in allowing for a maximum peak booking charge.”

Recent reviews by the ESC have resulted in recommendations being adopted. A final decision is expected on June 19.

The Victorian Taxi Association has expressed support for the measure, according to Fairfax Media.

Originally published as Essential Services Commission recommends ‘maximum peak booking charge’ up to $10 on Friday, Saturday nights