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Essential Services Commission releases Draft Report on 2016 Taxi Fare Review
03 May 2016
Victoria‟s independent economic regulator, the Essential Services Commission, has today released a draft report on its review of maximum taxi fares.
The review covers taxi fares in metropolitan Melbourne, Frankston, Dandenong and the Mornington Peninsula, as well as the regional areas of Geelong, Ballarat and Bendigo.
Taxi fares in these areas are regulated as maximum fares, meaning taxi service providers can charge up to the regulated rates, or discount below those rates.
In its draft report, the Commission describes the changing nature of the commercial passenger vehicle services market, with taxis facing increasing competition from alternative service providers.
"Our top priority is creating a fare structure that allows taxis to compete effectively with all newcomers in the business of transporting passengers, particularly at peak times," Commission Chair Dr Ron Ben-David said.
The Commission‟s draft decision proposes to leave fares unchanged, although the peak fares would start earlier in the evening.
Currently, peak maximum fares in metropolitan Melbourne can be charged from 10pm to 4am on Friday and Saturday nights.
The Commission‟s draft decision proposes to commence the Friday and Saturday night peak period earlier – from 7pm. It also proposes to allow peak fares to be charged from 7pm to 4am on the nights before public holidays.
"We're concerned that there aren't enough taxis on the road on Friday and Saturday nights and on the evenings before public holidays, meaning customers often have to wait for long periods before finding a cab," Dr Ben-David said.
As part of its draft decision, the Commission has also floated the idea of a new 'peak booking charge', which would allow metropolitan taxis that are booked to charge up to a maximum of $10 on top of the current fares, but only during peak times.
The additional charge would be subject to conditions that require customers to be informed of the fee at the time of booking, given the choice to accept or withdraw the booking, and given confirmation of any charge accepted.
"We're proposing fare structures that will induce taxis on to the road during peak times and, in particular, reward them for providing customers with a more readily available and reliable pre-booked service," said Dr Ben-David.
The Commission cautions that it will not proceed with the peak booking charge in its final decision on taxi fares if it does not receive sufficient interest from the taxi industry, or assurances that consumers will be the ultimate beneficiaries through better services.
"To be clear, we won't proceed with some of the proposals if the taxi industry fails to show genuine interest in how these new fare options will work to the benefit of customers."
The areas of Dandenong, Frankston and the Mornington Peninsula would continue to adopt the metropolitan maximum fare rates in the Commission‟s draft decision, including the peak booking charge if it proceeds.
In the areas of Geelong, Ballarat and Bendigo, maximum fares currently allow a late night fee of up to $3.40 to apply from midnight to 6am every day.
The Commission‟s draft decision for these areas is to extend the times during which the late night fee may be charged to include Friday and Saturday nights from 7pm.
It would also allow for the current holiday charge in these areas of up to $4.20 to be applied from 7pm on the nights before public holidays, until 6am the next morning.
The report notes that there is pressure on taxi service providers to respond to increasing competition by lowering fares, improving service quality offerings, or both.
“We are now operating in a competitive environment so it‟s up to the taxi industry to lead the way in creating attractive services offerings for customers. Our concern is that we set maximum taxi fares at levels that give them sufficient scope to do so,” Dr Ben-David said.
A final decision by the Commission is expected by 19 June 2016.