Sydney’s taxis take the fight to Uber

Sydney taxis will be able to turn off their meters as part of reforms to help them compete with Uber.

Sydney taxis will be able to turn off their meters as part of a radical package of reforms designed to help them compete with ride­sharing firms such as Uber.

Although new regulations haven’t been finalised, fare de­regulation will mean the end of fixed taxi fare rates. Passengers will hunt for the lowest fare they can get with various taxi firms and Uber, when they book a ride by phone or through an app.

Barbara Wise, NSW Point to Point Transport Commissioner

Barbara Wise, the inaugural NSW Point to Point Commissioner, outlined to The Australian how the new system would work. Appointed as commissioner in October last year, Ms Wise is designated regulator for taxis, hire cars and rideshare services under the NSW government’s point to point transport reforms.

The system she outlined shows how, after a couple of years of Uber, the way the taxi industry operates will totally change. A different system will also apply when you hail a taxi or get one at a rank. In these circumstances, taxis will still use meters, but they will be able to compete by setting the kilometre rate below a government- prescribed maximum.

“If you’re hailing it (a taxi) in the street or taking it from a rank, it will be a maximum fare. They’ll need to have the price (per km) on the window. But if it’s through an app or on the phone, or any other way that it might be booked, it would be a negotiated fare,” Ms Wise said. Taxis carrying booked customers would not have to use a meter. “I expect that some of them will for quite a while ... but they won’t have to.”

Under old rules, she said, responsibility fell on the driver as the person the regulator focused on, ensuring they complied with work, health and safety law. That would now fall on the companies.

She said NSW Transport was finalising the regulations, with implementation later this year. “There has been feedback from industry that they’ll need a bit of time to get things in place. Any start date will take that into ­account. From what I’m hearing from people, they’re looking forward to having a lot more freedom and set up systems in a way that works for them. The old regu­lations told them (taxi companies) exactly what to do and how to do it, and what technology to use. They didn’t have a lot of freedom.”

The NSW Taxi Council said the changes were a step towards a level playing field but failed to ­address some issues. Acting deputy chief executive Nick Abrahim said fare deregulation meant “more competitive fares from a taxi industry perspective”, but inequities remained.

For example, taxi vehicles were classified class 7 and owners typically paid $9000-$10,000 for compulsory third party (CTP) insurance. Private UberX vehicles were mainly class 1 and owners paid about $700. CTP reform was needed.

Ridesharing cars also needed to be identifiable for safety reasons. Whereas taxi drivers were limited to a 0.02 alcohol reading, private Uber drivers had the standard 0.05 limit. “How would a police officer know it’s an Uber driver without an identifier on a vehicle?” he said.

NSW taxi licence owners had seen their plate value drop from $400,000 to about $205,000.

“People invested in taxi licences with a plan. This was almost their superannuation. We have elderly people in the taxi industry that were about to retire and looked to this as their investment.”

Ms Wise said the NSW Government had allocated $250m to compensate owners. $98m for $20,000 payments per licence to owner drivers (maximum 2 licences), $142m for helping taxi licence holders facing difficulty due to the change and up to $10m for assisting hire car licence holders.

Uber head of operations ANZ Mike Abbott said competition from the taxi industry was “a good thing”. He said ridesharing had introduced that competition. “It means that other players will be lifting their game and we’ll have to continually lift our game. The result is more opportunity and more choice and a better experience for riders,” he said.