DRIVE A2B July 2018

Maximum fares
UNCHANGED
FARE REVIEW
Recently the Essential Services Commission (ESC) called for submissions from
stakeholders regarding their proposed approach to analysing maximum fares and also
proposals from stakeholders on the maximum fare schedule should be determined.
The draft decision of the ESC is to keep the maximum fare unchanged. The ESC has
published a draft report, an excerpt is printed here. You can read the full report at /www.
esc.vic.gov.au.
Over the last two years the commercial passenger vehicle (CPV) industry has experienced
enormous change. This is likely to continue over the next few years.
The government has made wide reaching reforms to the industry. In particular, the
reduction of the cost of taxi licences and changes to allow the entry of rideshare services
have had a significant impact. There are still more reforms to come.
Fares for all booked services
will be deregulated, the licensing
system has been replaced with
a registration system, and the
regulations that CPV service
providers must comply have
been reviewed.
In addition to these reforms,
we have seen the intensity of
competition in the CPV industry
increase. In Melbourne, there are
currently three major rideshare
booking services (Ola, Taxify,
and Uber) competing on price,
new taxi booking services
such as Oiii and Slyyk continue
to emerge and the number
of licensed taxis has almost
doubled since September 2017.
From a consumer perspective,
this competition provides a
greater variety of services to
choose from and less time
spent waiting for CPVs. But
overall, what we are seeing is
that passengers are using taxis
less. This means that there are
fewer taxi fares but many more
taxis and other CPVs on the
road.
For the traditional taxi industry,
particularly long-time operators,
this is a time of uncertainty.
As mentioned above, over the
coming year, further reforms will
come into effect.
The Essential Services
Commission (ESC) role is to set
maximum fares for unbooked
CPVs. Amongst all of these
shifting conditions, they are now
required to set (and periodically
review) unbooked CPV fares
whereas in the past we set
maximum fares for booked and
unbooked taxis.
Views are mixed about what
should happen to fares.
Some submissions received
recently by the ESC suggested
fares should increase, some
suggested that fares should
decrease, while others stated
that a change to fares would
be unhelpful given all of the
changes the industry is going
through.
Draft decision
The ESC is concerned that
changing maximum fares for
unbooked CPVs now might have
unpredictable consequences.
18 DRIVE A2B magazine · July 2018