What a quaint racket the Australian taxi industry remains, sanctioned by the ACCC despite Productivity Commission reservations, enabled by state governments more concerned with keeping plate owners happy than the welfare of consumers, all functioning to the detriment of customers and, at the bottom of the food chain, the mere drivers.

Yesterday’s AFR did a nice job scratching at the surface of the taxi “quasi-monopoly” operating in Sydney, prompted no doubt by the trouble Macquarie Bank continues to have breaking in with its fleet of taxis for the disabled. Reporter Katrina Nicholas makes a number of interesting observations about why the Cabcharge club runs under patriarch Reg Kermode:

While the ACCC chases big business, Cabcharge seems to be a law unto itself. It appears untouchable, with the NSW Transport Ministry turning a blind eye.

Many taxi operators – those poor souls one rung up the food chain from the drivers, whose 12-hour shifts routinely bring in less than $150 – are too scared to speak out, worried they would lose the lease on their taxi plates.

Tom Doumanis, partner with law firm Diamond Conway and legal representative for many a taxi operator, says: “The taxi industry is the closest example of an absolute monopoly that exists in all Australia….

“I’ve had clients who operate taxis who want to step outside the specific requirements of the networks and Cabcharge and have been told blatantly, behind closed doors of course, that if you do, you will not be operating taxis much longer.”

And so on over a double-page spread. But it only deals with Sydney, where it’s hardly surprising to find the government doing the bidding of a powerful and very well connected lobby group, just ask the Australian Hotels Association.

There are some, shall we say, interesting situations in other capital cities as well. For example, the Fin feature includes in passing some national indicators for the industry as at December. The cost of a set of plates in Sydney was put at $275,000 with the average cab doing 175,000 km a year on an average metro fare of $16.47. Plates in Victoria are allegedly worth $360,000 and travel 150,000 a year on an average fare of $19.50. In Queensland, plates are $350,000, travel 135,000 Km for a $15.80 fare.

No, it doesn’t entirely make sense. Talk to a few Melbourne taxi drivers, off the record, and you can be left with the impression that the “value” of taxi plates is artificially inflated by a few key players. And those Queensland figures just don’t add up as an investment when you could buy New South Wales plates instead.

Well done, Katrina, now keep digging.

Peter Fray

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