It seems that I may have been too hasty in claiming that the former head of the Australian Competition and Consumer Commission (ACCC), Graeme Samuel (now head of Victoria’s Taxi Services Commission), has moved to block greater competition against taxis by discouraging ridesharing applications like Uber.
According to reports in The Age, Samuel’s office has approached Uber directly to establish operations, but has so far been snubbed by the company. The Taxi Services Commission is also offering private car licences for unlimited vehicles for just $40,000, which Uber could easily apply for:
To comply, Mr Samuel said Uber would need to obtain a $40,000 private hire car licence for unlimited vehicles and have accredited drivers.
Mr Samuel said he wasn’t about being anti-competitive…
Instead he said the Taxi Services Commission was about “enhancing” the position of consumers. “I’ve talked about how for too long strong, vested interests in the industry have dominated the industry to the disadvantage of drivers, operators and consumers,” Mr Samuel said.
I was surprised to read that a private hire car licence allows an unlimited number of drivers, since it is unclear on the Taxi Services website that this is the case. Regardless, it is a huge development and one wonders why Uber has not already applied for a licence and just got on with business. Presumably the publicity gained from breaching the existing regulations is worth more to it than the fines issued to its drivers, which maybe it is paying on their behalf?
That said, the devil is in the details. For example, what does “and have accredited drivers” mean?
Previously, Samuel has stated that “drivers would have to use registered commercial passenger vehicles, and have passed the relevant tests”. Victoria’s Transport Minister, Terry Mulder, has made similar statements:
“All taxi and hire car drivers go through a rigorous accreditation process before they are allowed to drive a taxi or hire car – this is for both the safety of drivers and passengers.”
These statements seem odd when viewed in light of the common perception that taxi drivers are some of the most erratic and worst drivers on our roads.
If the accreditation and testing system is not too onerous, then it shouldn’t act as a significant barrier to competition against taxis. But if rideshare drivers are subject to more onerous accreditation than your typical taxi driver, then competition will obviously be stifled.
As I argued last time, ride-sharing is an economic no-brainer, providing greater choice to consumers and lowering costs, while also improving productivity by facilitating a more efficient use of the existing transport fleet. To his credit, and contrary to my earlier reporting, Graeme Samuel at least appears to recognise these benefits and seems open to greater competition.
Let’s hope that Uber puts its animosity aside and works with the Taxi Services Commission to establish a legal ridesharing operation in Victoria, paving the way for Australia’s other jurisdictions to follow.