Taxi Industry Inquiry - draft report - Taxi Services Commission

Customers First: Service, Safety, Choice.
Taxi Industry Inquiry
Draft report, May 2012
How to make a submission Submissions may be completed online, or sent by
email or mail in electronic, paper or audio format. Online: www.taxiindustryinquiry.vic.gov.au By email: taxiindustryinquiry@transport.vic.gov.au By mail: Taxi Industry Inquiry, Locked Bag 20046, Melbourne VIC 3001 In line with the inquiry's commitment to transparency and openness, all
submissions received will be considered public and will be posted on the
inquiry's website. Confidential submissions will not be accepted or
considered by the inquiry. Guidelines on how to make a submission are available from the inquiry's
website www.taxiindustryinquiry.vic.gov.au To speak with a Taxi Industry Inquiry team member via an interpreter,
please call our Multilingual Information Line on 03 9280 0774. Follow us on Twitter: www.twitter.com/taxiinquiry Visit us on Facebook: www.facebook.com/TaxiIndustryInquiry ISBN 978-0-7311-8790-4
© Taxi Services Commission 2012 This publication is copyright. No part may be reproduced by any process
except in accordance with the Provisions of the Copyright Act 1968. Authorised by the Taxi Industry Inquiry, 121 Exhibition Street, Melbourne Printed by Impact Digital Units 3-4, 306 Albert Street, Brunswick, Victoria, 3056 If you would like to receive this publication in an accessible format, such
as large print or audio please telephone the Taxi Industry Inquiry on 1800
829 444. Printed on Impact 100% Recycled paper. Contents Foreword 4 Status of this report 6 Overview 7 Part A Victoria's taxi and hire car industry 20 Chapter 1. 20 Chapter 2. 24 Chapter 3. 31 Part B Victoria's taxi and hire car industry 44 Chapter 4. 44 Chapter 5. 55 Part C Regulating the industry 91 Chapter 6. 91 Chapter 7. 100 Chapter 8. 116 Part D Understanding industry performance 160 Chapter 9. 160 Chapter 10. 181 Chapter 11. 234 Chapter 12. 270 Chapter 13. 285 Chapter 14. 332 Chapter 15. 363 Chapter 16. 401 Chapter 17. 432 Chapter 18. 456 Part E Improving performance 469 Chapter 19. 469 Chapter 20. 488 Chapter 21. 522 Chapter 22. 530 Chapter 23. 556 Appendices 590 Foreword For the last 12 months, the Taxi Industry Inquiry has been conducting an
extensive and wide ranging investigation into Victoria's taxi and hire car
industry. We have heard from and consulted with taxi users, local councils,
businesses and community organisations, taxi drivers, operators, licence
holders and networks across the State. We have sought the views of expert
economists and regulators here in Victoria and overseas. We have conducted
and commissioned our own research, and we have amassed substantial
information and data about the state of the industry and its performance.
The result is this draft report. From the outset, the inquiry has taken the approach that the customer comes
first and that the taxi and hire car industry - as with any service
industry - exists to serve the customer, not the other way round. Our
examination of the industry and our draft recommendations for reform are
grounded firmly in the belief that there is no point in undertaking reform
if the results do not meet the needs of consumers. Most of all, we are
determined to give Victorians a much greater choice in point-to-point
travel services, recognising that choice empowers consumers and that the
best way to provide choice is through an open, competitive market. We are also convinced that this is the best way forward for the industry.
There is much untapped potential in Victoria's taxi and hire car markets
and reforms to increase competition and reduce ineffective and costly
regulation will help the industry to realise this potential and grow demand
for its services. Over the course of the past year, it has become very clear that Victorians
want greater choice and better quality taxi services. It is also clear that
Victoria's taxi market lacks the basic hallmarks of a competitive market
and that restricting entry into the market - and the resulting high licence
values - is a major contributor to the problems facing the industry today.
It is also apparent that the taxi industry has not recognised the need for
change. Industry participants often cannot agree on key issues or seem
paralysed about how to remedy inequities, improve services and sustain
their own viability into the future. The taxi industry is an extraordinarily complex one and there are no simple
'fixes'. The inquiry's draft reforms aim to set a new direction for the
industry that balances different interests and constraints. But - make no
mistake - we are determined that the results of this inquiry will not be
'business as usual' for the industry. We are determined to propose reforms
that lead to a much more diverse and dynamic industry, and one that ceases
to be beholden to the interests of dominant parts of the industry to the
detriment not only of consumers, but those who deliver the services 'on the
ground': taxi operators and drivers. If there is one conclusion to be drawn from the inquiry's work, it is that
the industry's structure has to change. If it does not, it will not only be
consumers who suffer: the industry itself will stagnate and decline. This draft report aims to give Victorians a strong sense of the inquiry's
approach to reform. Over the coming weeks we will continue to consult and
gather the information, working towards our final report later in the year.
We do not pretend to have all the answers to the dilemmas and difficulties
facing the industry. We are keen to hear from Victorians with facts,
information or solutions that challenge our analysis or our proposals for
reform. I thank the many people who have participated in and contributed to our
work over the last 12 months. I also thank the team working with me for
their hard work and support in undertaking this inquiry. The extraordinary
response we have received shows the importance Victorians place on taxi and
hire car services. It also shows that there is no way back - significant
and lasting reform must occur for the industry to grow, continue to make a
vital contribution to Victoria's economy and support the changing travel
choices of Victorians into the future.
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Professor Allan Fels AO
Chair, Taxi Industry Inquiry [pic] Status of this report Customers First: Service, Safety, Choice is a draft report that includes
proposed recommendations for reform of Victoria's taxi and hire car
services based on the Taxi Industry Inquiry's research, analysis and
consultation to date. This report has been released for public consultation and comment to ensure
that the inquiry's recommendations in its final report to the Victorian
Government are robust, evidence-based and have fully considered the views
of taxi users, the taxi industry and the wider community. In some areas of the report, the proposed recommendations give clear
direction on the inquiry's thinking; in other areas, the inquiry is seeking
further data and information before settling on a position.
Opportunity for further comment The inquiry is inviting submissions on its draft recommendations as part of
the inquiry's public consultation processes. Submissions may comment on any
of the issues and options covered in the draft recommendations or that are
relevant to the inquiry's Terms of Reference.
How to make a submission Submissions may be completed online, or sent by email or mail in
electronic, paper or audio format. Online: www.taxiindustryinquiry.vic.gov.au By email: taxiindustryinquiry@transport.vic.gov.au By mail: Taxi Industry Inquiry, Locked Bag 20046, Melbourne VIC 3001 In line with the inquiry's commitment to transparency and openness, all
submissions received will be considered public and will be posted on the
inquiry's website. Confidential submissions will not be accepted or
considered by the inquiry. Guidelines on how to make a submission are available from the inquiry's
website www.taxiindustryinquiry.vic.gov.au
Public Forums Organisations or individuals who provided a submission to the inquiry by
the required date may also register an interest in speaking to their
submission at a Public Forum. You must have previously lodged your written or audio submission to
register your interest in providing a verbal submission at the Public
Forums. The inquiry will determine which submissions it agrees to hear verbally and
will allocate an appropriate time. All Public Forums will be recorded. Further information including Public Forum dates, the deadline for written
and audio submissions, the closing date for registering your interest in
providing a verbal submission, and guidelines on making submissions will be
available from the inquiry's website www.taxiindustryinquiry.vic.gov.au or
by calling 1800 829 444.
Final report Following the public consultation phase, the inquiry will spend some time
considering the submissions and other information received and will
finalise its recommendations. A final report is expected to be handed to
the Victorian Government later this year. Overview Victorians have made one thing very clear: they want better taxi services. They want higher quality, more professional drivers who know their way
around and who provide a much more customer-focused experience. They want
more reliable booking services and taxis that arrive on time. They want a
bigger range of services, especially in regional Victoria where public
transport options can be scarce. They want more taxis and other flexible
'point-to-point' services available at peak periods, such as late Friday
and Saturday nights. While recognising the limitations of taxi services,
Victorians do not understand why the experience of travelling in a taxi
cannot be improved and why - in an era of smartphone applications, GPS
devices and wireless technology - the taxi industry appears unable to make
its services