Over the past month, Melbourne taxi drivers have launched various blockades in protest to the legalisation of ridesharing services like Uber and what it perceives as inadequate compensation by the State Government.
Today, they have tried to force their way into State Parliament:
A line of police blocked the protesters after they climbed Parliament’s stairs and started shouting a short distance from the building’s front door.
The protesters then retreated, but said they would remain in front of the building until the debate, which is scheduled for this afternoon…
The Victorian Government is planning to introduce industry-wide changes, including regulating Uber and scrapping taxi licences.
It has argued the changes will create a more even playing field and better services.
But the taxi union has been critical of the Government’s compensation offer of up to $250,000, saying it does not cover what many drivers originally paid for their licences.
Transport Minister Jacinta Allan said the Government’s compensation scheme was fair.
“There are some that are facing additional financial hardship because of the level of debt they have entered into,” she said.
“There is a $50 million fairness fund which recognises the financial hardship they might be facing.”
Expecting taxpayers to pay compensation that covers “what many drivers originally paid for their licences” is hardly reasonable or fair.
Surely, any compensation paid to taxi plate owners should be capped at their initial cost (licensing fee) paid to the Government, plus interest. In many cases, this amount would be a pittance since a lot of taxi plates date back decades to when they were sold at peppercorn prices.
However, in no circumstance should taxpayer compensation be paid for taxi plates acquired on the secondary market at inflated prices. The public never saw that money.
Anyone paying for a licence in a controlled market knows that there is a risk that effective supply may increase, be it via the issuing of more taxi plates or a new source of competition.
Besides, if the taxi drivers are suddenly entitled to full compensation for their initial purchase costs, then so to should:
- buyers of an inflated house and land package on the fringe that finds its value reduced as more adjacent land is zoned residential by the government;
- buyers of off-the-plan apartments whose value is reduced by newly approved developments nearby;
- owners of businesses that go out of business due to international competition via a ‘free trade agreement’ signed by the government; or
- owners of businesses that suddenly face increased competition from market deregulation (e.g. airlines, pharmacies, etc).
Regardless of the above arguments over compensation, having increased competition and choice in the hire car market is unambiguously good for consumers, and should be widely supported by the general public and policy makers.
