Melbourne taxi drivers use loophole to haggle fares, demand upfront payment

This little-known loophole is letting taxi drivers haggle fares and demand upfront payments this festive season — and there’s nothing authorities can do about it.

Taxi drivers are exploiting a little known loophole by haggling fares and inflating prices this festive season.

Women are being stranded in the city unable to get home during the holiday season as taxi drivers exploit a little-known loophole which allows them to refuse rides or haggle an inflated upfront price.

Industry insiders say legislative reforms introduced in 2017 has led to taxi drivers “exploiting the system” by price-gouging during busy periods.

Outgoing Transport Matters MP Rod Barton and former cabbie said drivers were “gaming the system” and the government needed to urgently intervene.

“I’m concerned about the future of the taxi industry, without any lack of controls its future is precarious,” Mr Barton said.

“It has been an ongoing issue for some time and is progressively getting worse. It is a load of crap. It is an extension of touting. This is an unintended consequence of the 2017 industry reforms.”

Chris Banks, from Safe Transport Victoria, said drivers were legally entitled to negotiate a fixed fare price with passengers.

Taxi drivers are “gaming the system” in Melbourne this festive season.

“If the passenger does not agree to a fixed price, they may ask the driver to use the meter. If the driver accepts this, the driver must run the meter during the trip,” Mr Banks said.

He said it is not an offence for unbooked drivers to refuse a fare, provided they do not breach anti-discrimination legislation.

13 CABS spokesman David Samuel said he believed the regulator needed to take more action.

“We don’t condone price-gouging, it is a problem we hate to see,” Mr Samuel said.

“This is a consequence of the government going down the path of allowing anyone to become a taxi driver. It is opportunistic behaviour from a small few, who are demanding more than they should. The government needs to take responsibility to ensure drivers are doing the right thing.”

He said 13 CABS forbade drivers from declining rides.

“While it isn’t illegal in Victoria to decline a fare, we don’t condone it,” he said.

“Passengers have the right to hail a taxi and request to pay the metered fare, if they have trouble they should report to the regulator and expect them to take action,” he said.

Disgruntled taxi user Sophie Welsh said she had been charged $65 for a trip between Prahran and Richmond.

“It seems like they are trying to do their own surge pricing to compete with Uber, but the consumer is the one suffering,” Ms Welsh said.

“The price I was quoted was so far out of the realm it wasn’t funny.”

Sarra Stewart, CEO of all-women rideshare service Shebah, said the company did not partake in surge pricing.

“We don’t surge, for safety reasons. We don’t want young girls at the end of the night trying to get home and being unable to,” Ms Stewart said.

“Price-gouging enrages us, people are milking the system. It is really unfortunate.”