This report argues that taxi fares in Victoria must increase by an average of 12.5 per cent (with some variation between different tariffs).
On 2 February 2014, the Minister for Public Transport issued us a terms of reference, under the Transport (Compliance and Miscellaneous) Act 1983, requesting we provide a final report on new taxi fares by the end of March 2014. Due to the short time available, we were not required to release a draft report.
This report outlines our findings on taxi fares in Victoria.
This review is the first fare review since 2008 and since the Taxi Industry Inquiry (TII) handed its report to the Victorian Government in 2012.1 Under the amended Transport Act (once the amendments have been fully proclaimed), we will have an on-going role to review and determine taxis fares at least every two years from the date of the previous review. We expect to complete our next review of taxi fares before the end of 2015.
Over the last few months, we have held over 50 meetings with taxi operators, drivers, customer and industry groups, network service providers and meter suppliers. We are very thankful for the generosity these parties showed in sharing their experiences and knowledge with us. We also conducted a survey of operators and drivers to gain a better understanding of the underlying costs and challenges in providing taxi services. We are grateful to the 275 operators and 132 drivers who responded to the surveys. In addition, we issued a number of short discussion papers and thank all those who made submissions in response.
A major focus for us in this review has been to rethink our approach to fare setting so that it better reflects the market disciplines within which the Victorian taxi industry operates. Of course, many aspects of the reforms now being implemented seek to enhance the market-orientation of the industry. This includes: improving the scope for competition between taxi operators and networks as well as competition with other transport modes; harnessing better technology in taxi ordering and dispatch; creating opportunities for new and differentiated services; and promoting a greater focus on customer service. These reforms establish an environment in which providers of taxi services will have newfound opportunities to innovate, compete and to grow the overall market.