Cab drivers may soon set their own fares under new state laws

NEW laws that would allow taxi drivers to set their own fares could be introduced in state parliament as early as next week.

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NEW laws that would allow taxi drivers to set their own fares could be introduced in state parliament as early as next week.

The Herald Sun understands Cabinet will consider the changes soon. But Cabinet will have to decide whether to cap fares or create other restrictions to ensure consumers are protected.

The laws are the second tranche of reforms that legalised Uber and other ride-sharing operators, and which effectively scrapped taxi licence fees.

Industry sources say there is concern about a “half-pregnant” approach: new players such as Uber already operate in a system without fare limits.

They argue the reduction of taxi licence costs and other reforms will limit excessive fares by boosting competition.

Opposition public transport spokesman David Davis has criticised Daniel Andrews’ dismantling of the taxi industry. Picture: Stuart Milligan

It is likely the government will consider whether to put in place a sector-wide fares cap.

The industry is also waiting to see whether the government moves to cap surge pricing.

In July, after Melbourne’s train network shut down during one evening peak hour, Transport Minister Jacinta Allan put Uber “on notice” for trebling its rates.

Major changes are likely to trigger heated debate. Some taxi licence owners have already complained that the government has destroyed their livelihoods.

The Herald Sun can reveal that in an effort to placate angry stakeholders, the government has already paid out 98 per cent of its $332 million compensation package for people who had owned up to four taxi licences.

Transport Minister Jacinta Allan put Uber ‘on notice’ for trebling its rates. Picture: AAP

That scheme allows for ­licence holders to claim $100,000 for a first licence and $50,000 each for up to three further licences.

The government says tens of millions of dollars from the uncapped “fairness fund” had been distributed to those hit hardest by the reforms.

The first payments were made in July, but the government cannot yet give an exact account of how much it has paid out.

Opposition public transport spokesman David Davis said: “(Premier) Daniel Andrews’ dismantling of the taxi industry has been a shambles, with inconsistent and hopelessly ­inadequate transition assistance and an unfair ‘fairness’ fund.”

But Hayley McNaughton, on behalf of Ms Allan, said the government was providing more than half-a-billion dollars to the existing industry — “the most generous assistance package in the country”.

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