Taxi Talk May 2014


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May 2014 edition of Taxi Talk magazine

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TAXI TALK MAY 2014 ISSUE NO 553 VOICE OF THE TAXI INDUSTRY TAXI VOICE OF THE TAXI INDUSTRY MAGAZINE Official journal of the Victorian Taxi Association Print Post Approved number 100004912 LICENCE ZONES where can I work? TSC IMPLEMENT A NEW FARE STRUCTURE Great news for the whole taxi industry. Victorian taxi fares are getting an increase – effective 19 May 2014. On average, fares will increase by 12.5 per cent, though this will vary, depending on the time of travel and length of the journey. FARE RISE DRIVER AGREEMENTS new conditions after 1 July


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INSIDE... 4 10 12 18 26 36 Victorian Taxi Association editorial a balanced new fare structure TAXI VOICE OF THE TAXI INDUSTRY MAGAZINE OFFICIAL JOURNAL OF THE VICTORIAN TAXI ASSOCIATION MAGAZINE EDITOR ........................ Toni F. Peters VTA EDITOR ....................................David Samuel FOUNDER ....................................Stanley F. White PUBLISHER ..................Trade Promotions Pty Ltd New Driver Agreements will be effective 1 July 2014 ADVERTISING ENQUIRIES Trade Promotions Pty Ltd 42 Grenfell Road, Mt Waverley VIC 3149 PO Box 2345, Mt Waverley VIC 3149 Phone: ............................................. 03 9807 0237 Email: ................................... Website: ................................ Region News Driver / Operator split DISPLAY ADVERTISEMENTS Licence statistics Taxi and hire car licence statistics for last month All copy, editorial and artwork must be in by the 15th of the month prior to publication date. Advertisement sizes and rates can be viewed at SUBSCRIPTION DETAILS Taxi Services Commission Updates on issues affecting the Victorian Taxi Industry 1 year = $33 CLASSIFIED ADVERTISEMENTS $25 for 30 words, $50 for 60 words, etc. Email or Mail your classified advertisement by the 15th of the month prior to publication date, together with your payment. Events calendar Dates and locations of Melbourne’s major events PAYMENT OPTIONS • • • Via PAYPAL to Direct Deposit to BSB 033065 A/c 312786 Mail Cheque to Trade Promotions Pty Ltd PO Box 2345, Mt Waverley VIC 3149 Want to know as soon as Taxi Talk is uploaded to our website? Become a member of, and you will get an email immediately the next edition has been uploaded. Register at Phone: 03 9676 2635................ Fax: 03 9676 2643 PRESIDENT .................................... Kevin Gange VICE PRESIDENT ................. Stephen Armstrong CHIEF EXECUTIVE ....................... David Samuel Taxi Talk magazine, a monthly publication for the Victorian taxi industry, is published by Trade Promotions Pty Ltd in collaboration with the Victorian Taxi Association Inc (VTA). The VTA is the peak industry body in Victoria, fostering the interests and wellbeing of taxi-cab drivers, taxi-cab operators and taxi-cab Network Service Providers across the state. Taxi Talk magazine is wholly owned by Trade Promotions Pty Ltd. COPYRIGHT © Trade Promotions Pty Ltd 2014. All rights reserved. The “Taxi Talk – Voice of the taxi industry” heading and logos are trademarks of Stanley F. White. Copyright of articles and photographs of Taxi Talk magazine remain with the individual contributors and may not be reproduced without permission. Views expressed in any article in Taxi Talk are those of the individual contributor and not necessarily those of the publisher. The publisher cannot accept any responsibility for any opinions, information, errors or omissions in this publication. To the extent permitted by law, the publisher will not be liable for any damages including special, exemplary, punitive or consequential damages (including but not limited to economic loss or loss of profit or revenue or loss of opportunity) or indirect loss or damage of any kind arising from the contract, tort or otherwise, even if advised of the possibility of such loss of profits or damage. Advertisements must comply with the relevant provisions of the Competition and Consumer Act 2010. Responsibility for compliance with the Act rests with the person, company or advertising agency submitting the advertisement. Taxi Talk - Voice of the Taxi Industry May 2014 |3


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a balanced structure new fare I David Samuel VTA CEO t is pleasing to start by being able to write about some good news, rather than focusing on either negative or controversial issues. On Friday 11 April the Minister announced he would accept the recommendation of the Essential Services Commission (ESC) to implement a new fare structure and fare level across Victoria. While the announcement will not be completely without controversy, it did pick up on some important aspects of the industry’s arguments such as the need to increase the flagfall rate. The VTA commends the ESC on the job they have done, it was certainly a challenging one due to the legacy of the State Government not adjusting fares for such a long time. The VTA will now go back to the ESC with some thoughts on where the recommendations need to be tweaked. For example, we are of the view that the day rate (as distinct from the peak and off peak rate) is too low and could potentially reduce service standards at times when certain sections of the community need them the most. This is a difficult conundrum because it is far easier to set taxi fares as though there are simple on peak and off peak times. This is, of course, not a reflection of reality. While the total fleet may exhibit these characteristics, groups within the broader market, for example wheelchair accessible taxis (WAT), may have very different demand features than a standard taxi service. 4 | May 2014 Taxi Talk - Voice of the Taxi Industry


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One other mistake is to assume that setting a high price at certain hours will attract more taxis onto the road. The first assumption here is that they aren’t already on the road, it will be interesting to look at the statistics, but the marginal nature of the taxi business over the last five years has meant there wouldn’t appear to be many who can afford not to have their taxi on the road earning money. Another factor is that some choose not to drive their taxi late at night for reasons other than financial return, like safety and convenience, no amount of money would appear to prompt these taxis out. When the price of the product is regulated thought must be given to why such regulation is required. Obviously, government is not convinced that demand and supply factors alone are sufficient to define the price a taxi can charge, in which case other concepts like accessibility, availability, equity and efficiency must be considered. Taxi fares are of course far from the only issue bubbling away at the moment. The release of additional licences continues to concern many, understandably so. One thing this decision has highlighted is the irrational nature of entry to the taxi market. As most would know, the first batch of 30 new licences included 7 WAT licences. The VTA strongly oppose this decision. Any WAT driver will tell you the last thing we need is more WAT vehicles. There simply isn’t the work. Taxi Talk - Voice of the Taxi Industry The VTA have lodged submissions on the Excessive Entry and Consumer Interest tests and, as I write this, we are in the process of finalising our submission on the zone boundaries. These are available from our website www.victaxi. We have also continued to work on the issue of Price Notification. The VTA will be seeking Authorisation from the Australian Competition and Consumer Commission (ACCC) on behalf of affected member networks and operators. This will be a difficult and expensive exercise but is most necessary. There will certainly be more on this in the coming months. The Taxi Services Commission has also released the regulatory impact statement on the “implied conditions” to be included in Driver Agreements. This is an important piece of work and we encourage you to look at the document and either provide a submission or let us know your thoughts. The document is available from the TSC website. While the contents of the document aren’t that surprising, there are important details that will affect your business and it’s important to understand them and form a view. Finally, the VTA has started to circulate a monthly industry wide newsletter. If you would like to sign up please register your interest by emailing admin@ D May 2014 |5


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2014 Fare Review The Victorian Taxi Association (VTA) has welcomed Minister Mulder’s announcement regarding changes to the structure and level of Victorian taxi fares made last month. VTA CEO David Samuel said the announcement was welcomed by the taxi industry and struck a fair balance between taxi businesses and taxi users. “This month’s announcement is great news for taxi drivers and operators who have struggled under the burden of increasing costs without a fare rise in more than six years,” Mr Samuel said. “Over half a decade is too long to wait for an adjustment in the price of taxi services. We hope that recently introduced measures will ensure that this does not happen again.” “Unfortunately the delay in the fare adjustment means that the amount needed to catch up is higher than the industry would have liked. However, it is necessary for fares to keep pace with the costs of running a business.” Mr Samuel welcomed the innovative approach taken by the Essential Services Commission (ESC) to restructuring taxi flagfalls in order to reduce the incidence of short-fare refusal. Mr Samuel issued a warning to drivers saying that the ESC had heard them in relation to the need for better incentives to undertake short-distance work and that there is now no excuse to complain about taking passengers a short distance. The VTA welcomed an across-the-board 12.5 per cent fare increase in country and regional areas. These businesses have done it particularly tough over the past 6 years whilst providing an excellent service to taxi users in country Victoria. The VTA will continue to work with the ESC on issues related to off-peak day time tariff rates to ensure the disability sector receive the service they are entitled to. The VTA will also work with operators to try to better understand and minimise the impact of the government’s decision to award 55 per cent of the fare box to drivers. Metropolitan and outer suburban zones (Dandenong, Frankston, Port Phillip) Taxi fares for the metropolitan and outer suburban zones have been significantly restructured. Broadly, the restructuring seeks to increase fares the most during periods of high demand with increased flagfall across the three new tariffs designed to provide greater incentives for short-trips. The new fares will come into effect from 19 May 2014. Urban and country zones Urban areas, including taxis in Ballarat, Bendigo and Geelong, and country zone taxis will see an across-theboard increase to existing fares by 12.5%. This increase will be applied to all existing charges except booking fees. This interim adjustment will come into effect on 19 May, shortly prior to the new price notification arrangements in the new Country and Regional licence zones, which will allow regional taxi businesses to set and notify their own fares. D Taxi Talk - Voice of the Taxi Industry 6 | May 2014


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LICENCE On 15 April, submissions closed on the Regulatory Impact Statement which considered new taxi licence zones. Taxi zones are important for both existing and new taxis because it impacts where they can work, how much the licence is worth and how the taxi’s fares are set. The Victorian Taxi Association made a submission identifying a handful of areas where we are concerned the proposed rezoning of existing taxi service areas will result in a reduction in the accessibility of taxi services for the community. You can read our submission on There are currently over 100 taxi licence zones. From 1 July there will be four. It is important to understand that taxis licensed to a particular zone will be able to operate anywhere within that zone from 1 July. The table below shows what kind of work taxis from different zones can do. D zones Where can I work? Pre-booked Pre-booked (starting in or returning to home zone) (wholly within) Rank and hail Metro Metro Urban & Large Regional Regional Country                                                 Urban & Large Regional Metro Regional Urban & Large Regional Country Regional Metro Urban & Large Regional Regional Country Country Metro Urban & Large Regional Regional Country 8 | May 2014 Taxi Talk - Voice of the Taxi Industry


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NEW Driver Agreements Late in March, the Taxi Services Commission released a Regulatory Impact Statement on the implied conditions of all agreements between drivers and operators, to be referred to as Driver Agreements, after 1 July 2014. The ‘implied conditions’ that this document considers shift to a 45/55 operator/driver split of the fare box is unwill be assumed under law to form part of every rela- necessary and will needlessly inflate fares for customers. tionship between drivers and operators, whether there Once implemented, 45 per cent will need to cover what is a written agreement in place or not. 50 per cent currently covers for operators, and at preAgreements may contain an unlimited range of other sent that 50 per cent is insufficient. conditions as agreed to by both parties, so long as The VTA’s view remains that a fair outcome can be they do not act contrary to, or limit the effect of, the achieved with a 50/50 split and a properly adjusted fare. implied conditions. The question of unequal bargaining power, assuming it The implied conditions relate to: does exist, could have been addressed by setting a rea• The driver/operator farebox split – requiring that sonable mandated 50/50 split of revenue with a properly this be 55% of gross fares retained by the driver adjusted fare. • Maintenance costs • Indemnity and insurance The VTA believes that this process is an opportunity to • Dispute resolution ensure current concerns of both drivers and operators • Leave entitlements are adequately addressed, whilst also maintaining a • Termination of agreements viable income for both parties. • Bonds They are particularly keen to see issues with insurThe consideration of these implied conditions has been ance, that have plagued the industry for many years, done on a fundamental assumption about the balance resolved to the benefit of the industry as a whole. of power held by various parties in the industry. The VTA is currently preparing a response to the ReguIt is assumed that the bargaining power of operators latory Impact Statement which will be available at www. is out of balance with that of drivers. The reality is that bargaining power in any labour market is determined They will also be redeveloping the current model bailby the supply of available labour in relation to the dement agreement in line with the requirements for driver mand for it. agreements. The market for taxi drivers is no different. Even a superThe Taxi Services Commission are accepting submisficial analysis will show that over the last 3-4 years the sions from the industry on the implied conditions until bargaining position of taxi drivers has improved as a 8 May 2014.D result of a shrinking in supply. Regardless of whether you accept this argument, the 10| May 2014 Taxi Talk - Voice of the Taxi Industry


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REGION Driver/Operator SPLIT It is important to realise and appreciate that positive and effective change within the taxi industry needs to occur for the survival of the industry. Taxi owners and operators are investing the financial means in the industry, and the industry would cease to exist and function if this was withdrawn. To date, the reforms have failed to seriously consider the owners and operators; the people who steadfastly continue to invest the most into the taxi industry yet stand to gain the least. Although the government of the day makes the legislation and regulation, it is up to the Taxi Services Commission (TSC) to not only enforce the relevant rulings; but to ensure that they are in a suitable framework that everyone can operate under. The industry appreciates and acknowledges that this is no easy task. The Taxi Services Commission needs to adopt best practice to ensure the survival of the industry. As part of this process, there are many issues that could potentially assist the owners and operators. One of these is the consideration for the fuel to be deducted from the fare box prior to the 55/45 split being applied. Fuel costs have risen considerably over the past four years and no allowance has been made for this. Particularly in regional and country areas this has placed a significant negative impost on owners. Many drivers have the benefit of the use of the vehicle for their own means to go home for lunch, pick up the kids and the shopping, without any consideration of the cost to the owner. When a fare box is broken down into a percentage basis, it is a simple calculation that shows the poor financial position of the owner without the fuel consideration. For small owners/operators there is no longer the opportunity of making an acceptable living. For those who operate NSPs and WAT vehicles, the costs are considerably higher than outlined above and this is funded from the owner’s take, therefore the owner virtually ends up with little financial reward. Many owners have indicated that they will have to work longer hours to ensure that they retain enough income to cover all costs and the reality is less shifts available for baillee drivers. This will have a negative impact on effective customer service, place extra pressure and stress on owners and their quality of life deteriorates. It will also place many drivers without a position and opportunities to work. Drivers have indicated they are looking outside the industry for other work as they are aware that the legislated reforms may not offer them ongoing shifts with individual owners or provide an increase in income. Taxi Talk - Voice of the Taxi Industry news 12 | May 2014


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55/45 split - owner pays fuel Fare box Driver Owner 55% 45% $300 $165 $135 55/45 split - $40 fuel cost shared between owner & driver Fare box Driver Owner 55% 45% $260 $143 $117 Owner breakdown of $135 Fuel Operating costs Total Owner takes home A fare rise will not afford the real answer to these issues, as customers always have a negative reaction to a fare rise and drivers will still have a reduced income along with owners and operators. Unless the government and the TSC realise that some benefits must come to the owner/operators for their financial commitment to the industry, the road ahead will be $40 $46 $86 $49 Owner breakdown of $135 Operating costs Total Owner takes home $46 $46 $71 a very unstable one. Unfortunately for regional and country owners and operators they have been forced into many of the changes that are not appropriate for their situation. It is a concern that the TSC is forging ahead with the reforms without due diligence and concern for all participants. It would be more appropriate to slow down and make sure that each step is considered fully prior to implementation. Already there has been some awareness that components of the legislation contain errors and require amendments. Jen Eaton, Riviera Taxis & Hire Cars Pty Ltd Andrew Lane, Traralgon Taxis D Country Price NOTIFICATION The VTA remains concerned about the potential impacts of the new price notification policy on multi-operator co-operative networks in country and regional areas. Legal advice has confirmed that if multi-operator co-operative style networks want to set and notify a consistent maximum price for their booked services, this behaviour would potentially contravene provisions of the federal Competition and Consumer Act 2010. It appears the best way to ensure that country networks can continue to provide an efficient and effective service for their customers in relation to booked work is to seek authorisation for them to set maximum fares for booked and contract work from the Australian Competition and Consumer Commission (ACCC). The VTA has begun work with the ACCC to identify how this can be achieved for all networks whose business will be at risk without the need for individual expensive and complex authorisation applications. You can read more about the issues in the VTA’s submission to the TSC regarding price notification at D Taxi Talk - Voice of the Taxi Industry FOR SALE TAXI REPLACEMENT VEHICLE 02/2013 TAXI RWC SUPPLIED, sn474 FORD FALCON FG XT MK2 SEDAN $21,500 GLV MOTORS 0418 362 521 May 2014 | 13


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Driver of the Month Marie Baker, Amalgamated Taxis Wodonga Originally from New Zealand, Marie arrived in Australia in 1976. She started part-time taxi driving in Wodonga in 2005, whilst simultaneously pursuing a career in Aged Care. In time, Marie found that she enjoyed the taxi services environment more and determined to make taxi driving her full-time occupation and to become a career driver. As a well-established local, Marie now has a great knowledge of the Wodonga area and all that the community has to offer for its residents and visitors. Marie is very aware of the need for professionalism in the delivery of taxi driving services. The constant pristine condition of her vehicle and her own personal presentation sees her as a customer focused driver. Additionally, because of her background in aged care Marie has great empathy for our elderly clientele who hold her in very high regard as do the owner-operators of the Wodonga Taxis network. D 14 | May 2014 Taxi Talk - Voice of the Taxi Industry


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