Government readies laws to give Uber go ahead in Victoria, compo for cabbies

SWEEPING reforms to the taxi and hire car industry that will legalise Uber must not add to Victorians’ cost of living pressures, the state opposition warns.

Uber’s rise has seen the taxi industry thrown into crisis. Picture: Daniel Wilkins

SWEEPING reforms to the taxi and hire car industry that will legalise Uber must not add to Victorians’ cost of living pressures, the state opposition warns.

The Herald Sun revealed today that Uber will be legalised and all taxis will be able to set their own fares in Melbourne under the most radical transport industry shake-up in decades.

Passengers in taxis, hire cars and ride-sharing vehicles are also set to be slugged $1 a trip for a “fairness fund” to compensate existing taxi licence owners.

COMMENT: Uber turns our transport industry on its head

The State Government is prepared to buy back taxi licences to create a more level playing field and more competitive industry.

Opposition public transport spokesman David Hodgett said the coalition had long-argued for Uber to be legalised but that more information was needed on how the plan would be paid for.

“Anything that makes transport more expensive for Victorians is not a good outcome and we will need to see modelling around any proposed levy and license buy back schemes,” he said.

“Victorians are struggling with cost of living pressures so if the government’s proposal means higher fares for passengers then that may be a backward step.”

Uber driver Christian Henry welcomes the end of the taxi industry monopoly. Picture: Jake Nowakowski

Public Transport Minister Jacinta Allan presented to colleagues this week a plan to deregulate the industry, including the buyback scheme that one source said could cost hundreds of millions of dollars.

It is understood there is no final price tag put on the reforms, which will be probed by Cabinet’s expenditure review subcommittee.

One option is to pay for licences at current market rates — about $150,000. There are more than 5000 in Victoria, meaning if all licences were bought back over time, it could cost taxpayers almost $800 million.

The plan for a $1 fee on all fares will also be assessed.

The sweeping changes are likely to be introduced in stages, with metropolitan Melbourne the first to see ­deregulated fares.

Details of the plan were outlined to the Herald Sun in a Cabinet leak.

A $1 fee on all fares will be assessed for driver’s like Suleiman Hashi. Picture: Mark Stewart

Most ministers spoke in favour of the reforms during Monday’s meeting, with a recognition that technological changes meant holding back services such as UberX — where ­passengers book using an app and the price per ride varies depending on demand — was impossible.

“We can’t go back to where Uber didn’t exist,” one minister said.

Another minister said the changes would help bring in new players to the market.

However, concerns remain about price gouging during peak periods, and whether enough disability-friendly taxis will be kept on the road.

Safety regulations including criminal checks for drivers and minimum vehicle standards will remain in place, but only taxis that operate from ranks or can be hailed on the street will need cameras installed.

Public Transport Minister Jacinta Allan.

The government will argue that other vehicles will be booked online or through apps to ensure protection for ­passengers.

In 2013, the coalition introduced massive reforms to the industry, including three new fare tiers depending on the time of day. But the rise of US-based Uber has seen the taxi industry thrown into crisis.Knowledge tests for cab drivers are also set to be dumped, after being created three years ago.

The value of taxi licences has plummeted from as much as $515,000 last decade to about $150,000 today, angering some owners who bought plates as a retirement income.

The new plan is likely to enrage some of those owners.

Others will be pleased they can at least operate on a more level playing field with Uber, which has stormed into the market with cheap fares.

Competition is expected to drive benefits for consumers, however big questions remain about how protections for passengers will be built into the new scheme.

One minister said there would be protections for passengers with disabilities, and there was still some way to go in setting up the final structure of the scheme.

New laws will also need to be drafted.

The Andrews Government recently struck a deal with the Sex Party’s Fiona Patten to adjourn a Private Member’s Bill.

The Andrews Government declined to comment.

Uber driver Christian Henry. Picture: Jake Nowakowski

Try it once, never go back

CHRISTIAN Henry had only used the ride-sharing app once before registering as a driver.

A year on, he says the taxi industry monopoly is over.

“So many first-time Uber users say they’re never going back to taxis,” Mr Henry said.

“If you went for a drink at a bar, then tried next door and liked that bar better, you wouldn’t go and compensate the first place for not being as good.”

Although 78 per cent of the fare goes to Uber drivers, Mr Henry says the margins are still small after factoring in tolls, petrol and depreciation of his car.

“If those margins got smaller I probably wouldn’t bother,” he says.

Taxi driver Suleiman Hashi. Picture: Mark Stewart

Rivalry ‘unfair’

AFTER 18 years behind the wheel of his taxi, Suleiman Hashi says Uber has created unfair competition.

“Competition is great for consumers, but it needs to be a level playing field,” Mr Hashi said.

The father of six says he spends $500 a week in upkeep costs for his taxi, while Uber charges drivers nothing. “I drive 50 to 60 hours a week to provide for my family,” said the 46-year old, who has experienced a 20 per cent decrease in customers in 12 months.

Mr Hashi says he feels safe knowing there is a governing body to protect him.

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