Has Cabcharge fixed the most annoying thing about catching a taxi?

CATCHING a cab may be about to get slightly less frustrating. The taxi industry desperately wants passengers to trust it again.

Cabcharge chief executive Andrew Skelton.

CATCHING a cab may be about to get slightly less frustrating.

Anyone who’s ever had to book a taxi for a dreaded “short trip” knows it can be hard to even get a cabbie out of bed for anything less than a leisurely tour of half a dozen Canberra wineries.

Andrew Skelton knows this all too well — and he’s determined to fix it.

As the chief executive of Cabcharge, he’s responsible for overhauling a legacy business in a rapidly changing competitive environment where the likes of Uber, GoCatch and Ingogo are addressing long-held gripes with the taxi industry.

Cabcharge operates the payment terminals in 97 per cent of taxis and runs booking and dispatch services through its taxi networks including CCN, Black Cabs and Arrow Taxis.

Among Mr Skelton’s ideas to improve the taxi industry include attracting more drivers who can better interact with customers, a priority system for regular taxi users and more incentive for drivers to take shorter fares.

It comes at a time when Cabcharge’s revenue is bleeding away. Its controversial 10 per cent surcharge has been slashed in half by state governments in NSW, Victoria and Western Australia.

In just the six months to December 2015, that amounted to a hit of nearly $7 million to its bottom line. Cabcharge’s profit in the first half was $24.4 million, down 21.7 per cent on the same period a year earlier.

Just this morning, cabbies have taken to the street of Melbourne to protest.

UPDATE: Police clash with taxi drivers in #Melbourne CBD protest against Uber + surcharges https://t.co/cgzGRKbSXW pic.twitter.com/x9n45Weeh0

— Herald Sun (@theheraldsun) May 10, 2016

And if the recent #YourTaxis debacle is anything to go by, Australians have little goodwill towards the taxi industry.

Just took my first ever ride with UberX. Much better than #YourTaxis.

— Duncan Maitland (@duncm) April 10, 2016

All things considered, he has one of the hardest briefs in Australia right now. It’s the kind of job that would keep most people awake at night.

“It’s a fascinating challenge,” Mr Skelton, who took over from the company’s founder Reg Kermode​ when he died in April 2014, says diplomatically.

In a statement to the ASX in February, he said continued growth in the taxi network was offsetting some of the decreased revenue from the government-mandated changes.

“The operational improvements we have made are beginning to take hold,” he said.

“We are answering calls and picking up passengers more promptly. In Sydney we have recently reduced the time taken to pick up a passenger by nine per cent.”

Melburnians out and about in the CBD. Picture: Eugene Hyland

One of the biggest “operational improvements” he’s made is addressing that pick-up anxiety — when the customer puts down the phone, “there should be no stress” that the taxi might not show up.

Mr Skelton’s philosophy is that taxis should be about “connecting you with popular places — a meeting, interview, holidays, sporting team, job, date”.

“We’ve managed to take the fun out of taxis,” he says.

While he claims “the reality of the drivers is better than the perception”, he acknowledges that even if a passenger is let down one in 10 times, that’s not good enough.

“All of that’s changing. We’re prioritising service to passengers,” he says.

“Our focus is on delivering certainty of service.” That means better training for call centre staff and drivers, but also “incentivising drivers to do the right thing”.

“[We’ve said to the drivers] when you do a job that’s less than four kilometres, you get back in the priority queue,” he says.

That simple change has led to a dramatic increase in the number of short fares picked up, when in the past the driver might have passed up the fare and left the customer stranded.

But at the same time, it highlights one of the fundamental challenges Cabcharge faces — its reputation as a business and perception among customers is reliant on the behaviour of taxi drivers.

Mr Skelton believes increasingly stringent registration requirements introduced by successive state governments over the years have caused many of the problems.

Twenty-five years ago, he says, taxi drivers came from all walks of life — an out-of-work architect, a real estate agent or teacher wanting to earn some extra cash on the side.

Back then, all it took was $20 and a Saturday afternoon — today it can take two weeks of training.

That has greatly reduced the driver pool to what Mr Skelton describes as a “less suitable driver population” today. Good drivers need “emotional intelligence”, know when and how to interact with customers and “how to defuse tension”, he says.

Many drivers today lack those qualities, he added.

The taxi rank at Flinders Street Station. Picture: Eugene Hyland

And ironically, it’s casual ride-sharing apps like UberX that are attracting many of those same real estate agents and architects, delivering a markedly different passenger experience more akin to old-fashioned taxis.

In NSW at least, recent regulatory changes have been working in Cabcharge’s favour, allowing it to bring on more new drivers more quickly.

In the four months to April 2016, 850 new drivers were added, compared with just 214 in the same period a year ago.

Like many in the taxi industry, Mr Skelton feels a deep-seated frustration with regulators who let services like Uber ramp up their footprint while operating illegally.

In November, Cabcharge chairman Russell Balding lambasted state and territory governments, accusing politicians of actively encouraging Australians to break the law.

“What really concerns me with respect to Uber and other so-called digital disrupters, is that, in a civilised Western democracy, you should not be allowed to cherrypick which laws you abide by and which laws you don’t,” Mr Balding told the company’s annual general meeting.

Mr Skelton, pointing out that Cabcharge actually had the first taxi booking app in 2009, before any of its competitors, describes the business’ current predicament as “a tragedy of playing by the rules”.

“The most expensive decision we ever made was playing by the rules,” he says.

Mr Skelton hopes customers will see a “completely different” Cabcharge in about 18 months’ time. But there is “no utility in telling the community their perception is wrong”.

“We need to deliver,” he says.

And eventually, Cabcharge may even introduce a priority system for regular taxi users — those who “support the industry”.

If you catch a taxi three to five times a week, for example, you may get preferential treatment in the queue to someone who only catches a taxi twice a year.

Mr Skelton acknowledges that could be a controversial move which would only alienate passengers even further.

“We’ve got to be very sensitive,” he says. “This probably wouldn’t happen until the fifth year of our transformation.”

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Originally published as Has Cabcharge fixed the most annoying thing about catching a taxi?