Taxi fares for cars hailed on the street in large parts of Victoria are set to rise next month

Passengers who hail a taxi from the CBD to travel to Melbourne Airport will pay more than $67 before tolls are added, after a fare hike was approved by the industry regulator.

Increased cab fares to Melbourne Airport will take effect from September 23. Picture: Jason Edwards

Passengers who hail a taxi from the CBD and ride to Melbourne Airport will pay more than $67 before tolls are added after a fare hike was approved by the industry regulator.

The decision by the Essential Services Commission applies to taxis hailed from the street or a rank, and allows for maximum fares to be hiked by 5.5 per cent or 6.2 per cent for larger vehicles such as “maxi” cabs.

Increased prices take effect from September 23 and are largely due to increases to the minimum wage and rising costs of operating taxis.

The ESC says in its decision that a short 3km trip will rise by about 84 cents to $17.70 under the changes, for passengers in metropolitan Melbourne including in Frankston and Dandenong, as well as the Mornington Peninsula, Geelong, Ballarat and Bendigo.

The 5.5 per cent hike was marginally lower than a 5.7 per cent flagged in a draft review, due to the fact some cost pressures had eased.

Picture: Jason Edwards

The ESC held surcharge payments for credit and debit cards at four per cent, and six per cent for Cabcharge.

Taxis and ride share cars booked via apps do not have the same price caps, and can use “dynamic” pricing that changes based on supply and demand.

A report on the decision shows that inflation has increased 9.5 per cent since June 2022, but that the costs of operating a standard rank and hail taxi increased 9.9 per cent.

“Since our 2022 reviews, it has been a period of high inflation. This has put cost pressures on both taxi service providers and Victorian consumers,” the ESC says.

Picture: Jason Edwards

After its June 2022 review and decision, the ESC hiked fares by 11.2 per cent, partly due to the fact it had been a long time since a review had been done.

In October last year, it also approved a 4.1 per cent hike in fares.

This means that in just over two years, unbooked taxi fares have risen by almost 21 per cent.

The report also notes that passenger numbers have failed to return to pre-pandemic levels, but that although there were 34 per cent fewer taxis at the airport in 2022-23 compared to 2019-20 there had been a 65 per cent increase in ride-share use over the same period.