Cabcharge profit hit by regulatory crackdown

Already under pressure from Uber and apps, Cabcharge’s profit is down 45pc after regulatory changes.

Cabcharge CEO Andrew Skelton. Picture: Hollie Adams /The Australian.

In the face of intense competition from Uber and app-based fare payment intermediaries, Cabcharge has seen its profit whittled away by a regulatory crackdown on the taxi payment group’s service fees.

Cabcharge (CAB) today booked a net profit of $25.6 million for the year through June, a slump of 45 per cent year-on-year.

Revenue fell 10 per cent to $168.8m.

Recent decisions by NSW, Victorian and Western Australian state governments capping Cabcharge’s service fee at 5 per cent have cut Cabcharge’s national average service fee. Cabcharge derives about 40 per cent of its revenue from payments processing

“Adverse regulatory changes and one-off asset impairments have been the key headwinds to our performance during FY16” the company said. “Largest single impact to revenue has been the full year impact of the imposition of non-cash taxi service fee price controls.”

As well as providing payment terminals to most of Australia’s taxi, Cabcharge owns taxi networks including Melbourne’s Black Cabs.

Cabcharge will pay a 10c final dividend, bringing the year’s total distribution 20c.

Cabcharge recently enjoyed a rare win after the ¬competition regulator grudgingly approved a revised version of the proposed booking app ihail.

A joint venture between Cabcharge and four taxi networks, ihail will allow passengers to book the nearest available taxi, no matter the affiliation. The rejected version would have channelled bookings to the venturers and the Cabcharge processing web. In a further concession to the regulator, passengers can pay in-cab rather than exclusively online.

Cabcharge shares have more than halved over the last decade, partly the result of a regulatory crackdown on its previous payments monopoly on non-cash fares.