Victoria steps up taxi protection

By Leith van Onselen

Victoria’s Taxi Services Commission has turned up the heat on Uber’s risesharing service, Uber-X, ordering it to cease operations because it is “illegal” and issuing fines of up to $7,500 to driver found operating illegally. From The Australian:

The moves represent a significant hardening of the commission’s position on Uber…

Victorian Taxi Association spokeswoman Georgia Nicholls welcomed the commission’s move.

“It’s a very difficult position that the regulator has been put in, to deal with companies that have no regard for the law,” Ms Nicholls said.

A commission spokeswoman said it sent Uber a cease-and-­desist letter on October 23.

“By doing so, the TSC has made it clear to Uber that its UberX product is illegal in Victoria in its current format,” she said…

Uber’s high-end Uber Black service, which uses accredited drivers and licenced drivers, was legal and welcomed by the commission “as it increases competition and provides more choice for passengers”.

However, UberX drivers use their own car to pick up fares booked through a smartphone app.

“Unlike the Uber Black product, UberX does not generally use accredited drivers or licenced vehicles, which means the service is operating outside the law. These issues may pose a safety issue for both passengers and drivers,” she said.

Quite frankly, the claims about safety do not pass the laugh test.

Uber-X’s drivers must be over 24 years of age and have no criminal record. Vehicles must also be covered by comprehensive insurance, have at least four doors and be manufactured after 2005.

Unlike taxis, where it is pot-luck who your driver is, Uber-X also allows customers to view the drivers’ rankings and their reputation via their website, which allows customers some control over who their driver is. It is also in the drivers’ best interest to impress you, as after your journey is complete, you are required to give them a rating out of 5 stars. A low star rating results in less fares for the driver.

Further, journeys are tracked via GPS, which affords an additional level of safety for customers.

One wonders whether the so-called ‘accreditation’ process undertaken by taxi drivers isn’t just window dressing anyway, given the common perception is that taxi drivers are some of the most erratic and worst drivers on our roads.

Ridesharing should be encouraged by both regulators and policy makers alike, since it would provide greater choice to consumers and lower transport costs, while also improving productivity by facilitating a more efficient use of the existing transport fleet. Ridesharing would also offer drivers greater options to derive an income, without paying exorbitant licence fees or rents to taxi plate owners.

All that should be required to operate a ridesharing service is a late model roadworthy car, a valid drivers’ licence, and comprehensive insurance. Adults in Australia should then be free to choose their transport options. If they do not trust Uber-X and want to take a taxi. Fine, take a taxi. Similar, if they want to use Uber-X, let them exercise their choice and do so.

However, consumers’ choices should not be limited by out-dated regulations that seem more interested in protecting the taxi industry, rather than offering consumers real value.

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  1. reusachtigeMEMBER

    Good to see that sanity has prevailed here and the government is doing their best to protect the investments of the taxi drivers. These drivers have put a lot of money into their plates and the government is just doing their best to ensure larger profits for these investments. That’s the main purpose of our governments, ie, to protect the profits of investors. They have done a great job here and should be commended.

    • I bet Taxi plate owners are also handsome and attract the opposite sex, just like investment property specufestors. 😉

    • Generally, the taxi plate owner is NOT the driver. The plate owner makes a shit tonne of money while the driver is paid a pittance.

      At least with Uber, the driver can drive their own car and keep all the profits. This is something that needs to be screamed from the rooftops.

  2. Tassie TomMEMBER

    In principle I agree with the Victorian government – it is a big responsibility to have a stranger in your car, and the stranger is potentially very vulnerable whilst in it.

    If the Victorian government allows Uber-X (either actively or passively), and a passenger gets raped and killed, then is the Victorian government liable? Surely more liable than the federal government is for the “pink batts” deaths.

    In practice though, taxi drivers as a collective are their own worst enemy. Their reputation as either quality or trustworthy drivers is generally mud. If all taxi drivers were safe, polite, and trustworthy then the issue would be much clearer, but as it is it is very cloudy.

    • If the Victorian government allows Uber-X (either actively or passively), and a passenger gets raped and killed, then is the Victorian government liable? Surely more liable than the federal government is for the “pink batts” deaths.

      What about if it happens in a taxi? Further both the driver’s phone and the passengers are recording the route on GPS and reporting it back to the company in real time. Surely this would have just as much of a deterrent factor as cameras do?

      • Tassie TomMEMBER

        It can and does happen in taxis, but the government can wash their hands of liability by claiming “we have a stringent accreditation and checking process which is at least as tough as that of our peers, and we have done everything that we can”.

        This may or may not be true, but it does effectively deflect liability.

      • I’ve had a near miss with a taxi driver who was acting strangely and saying some very creepy things. Quite a few women have been raped and bashed by taxi drivers. To say that the current system has protections while Uber does not is a big lie.

    • “If the Victorian government allows Uber-X (either actively or passively), and a passenger gets raped and killed, then is the Victorian government liable?”

      If the Victorian government allows AirBNB (either actively or passively), and a guest gets raped and killed, then is the Victorian government liable?

      If the Victorian government allows eBay (either actively or passively), and a buyer gets raped and killed when picking up an item, then is the Victorian government liable?

      If the Victorian government allows Tindr (either actively or passively), and a user gets raped and killed, then is the Victorian government liable?

      • Tassie TomMEMBER

        If the federal government subsidizes people who want to increase the efficiency of their home, and an employee of a dodgy operator working on a house gets electrocuted, then is the federal government responsible?

      • Assuming you refer to the pink batts issue.

        Then no the federal government is not libel.
        I cant recall if compensation was paid by the government to the families of the deceased or not but there was no liability and should not be any legal liability for what happened.

        The company owners/contractors who employed those poor people who died are the ones libel. They should have been sued out of existence and prosecuted and jailed for 50 years for their failure in ensuring a safe workplace.

        That whole episode was pushed by one fathers understandable grief to hold someone accountable for the death of his son, but i cannot for the life of me understand why he did not blame the companies involved who are the ones responsible. Instead he seem to focus his anger on Krudd, and the labor government. This poor man was used by the liberal government to prosecute one of its many witch hunts against a labor government.

    • St JacquesMEMBER

      Ah, the high standards of Melbourne taxis need to be preserved! The Victorian government, aka, the Taxi Directorate, couldn’t regulate a chook raffle. The cab game is full of drivers who can barely drive, don’t know their way around, reports of frequent sexual advances on passengers, drive like mad and whose identity is very much in doubt. Add to that frequent scamming of credit cards, the refusal of short fares, etc. Anybody here on business or as a tourist is likely to leave with a very poor image. Yep, good to see the Victorian government looking after the only people who matter in this benighted country – the rent seeking taxi licence (“plate”) speculators (owners) – who in most cases do not even have responsibility for the car (!) since they lease out the plate to operators or drivers. At the very least they should be forced to own and pay for the car.

      • Tassie TomMEMBER

        I totally agree. None of this should happen, it is a failure of regulation and a blight on humankind that it does.

        Is failure of regulation a reason to throw regulation to the wind? Maybe. Or maybe the whole thing should be reformed. I don’t know the answer.

        Neither do I have much sympathy for the taxi license speculators.

        I’m just speaking for the devil, and pointing out the potential problems that will also unfortunately happen with Uber-X, and how this may reflect on the Victorian government. They are just protecting their own backsides as much as they are succeeding to their lobbyists.

        As an aside, most car insurance policies specifically exclude using your car for commercial purposes. This adds to the complication.

    • Geez, when did we fall into this nanny state mindset that government should be responsible for our personal safety at all times. What a joke.

      Is government responsible for someone that gets raped and killed on the street because they provided that infrastructure? I mean get real.

      People should take responsibility for their own actions. Don’t like the risk of an Uber vehicle then don’t get in one. Don’t like a taxi, then don’t catch them. Plenty of alternatives such as public transport, walking, driving yourself, riding a bike, I’m sure there are those that could make a case that government is responsible for you in any one of those situations.

  3. I’ve never used a taxi since Uber came out in Brisbane, so the taxi companies should be very afraid. There are so many out all around the city these days too.

    The last one that I caught was a fully kitted out Landrover Discovery from Stafford to Annerley for $33!!! That’s close to an half an hour in the car with $5 for the tunnel. A crappy, smelly hybrid camry taxi would’ve cost double!

    • Don’t forget the soft drink bottle filled with urine rolling around on the taxi’s floor. (Yes, I’ve seen this.)

  4. Jake GittesMEMBER

    This is Australia: let’s impose/enforce another rule because compliance is what government does.

  5. We are a government that encourages competition*.

    *except when its competing against the monopoly we’ve created

  6. Leith I usually agree with what you have to write – however there are certain legal arguments which seem to underline your post which I have to completely disagree with.

    “People should be allowed to use what they want”. Have to disagree here. People (and rightfully so) are not able to contract out implied public rights – this is simply because doing so would breed inequity.

    You are an economist so I really don’t expect you to be an expert in the law nor insurance, so let me explain a few things:

    (1) Uber considers itself a marketplace, meaning that it is not legally responsible for any problems with the drivers/service. Whilst you may say – well they have committed to paying fines, providing “extra liability insurance cover” etc – the fact remains that this position can easily change as they have no legal obligation.

    (2) Following from the first point regarding the contracting out of Uber liability, you do realise that comprehensive car insurance does not cover personal injury/death. And here is the kicker – Uber in realising this, has decided to provide drivers with additional insurance for personal injury/death. But again, this is the point – there is no contract terms outlining this cover. It is simply a word of mouth PR release saying that Uber will cover drivers up to $1m.

    (3) Taking points 1 and 2 together – I do not feel comfortable being a passenger in a uber car, knowing that if I lose my legs in a car crash, that I will have to directly sue the driver – and as he is a driver he most likely will not have the $1 million in damages I will need to survive. Yes, Uber may pay – but they have no legal obligation to. This is the kicker. Uber/Taxis/Hire cars – they are all providing a public service, and you SHOULD NOT be able to provide a public service without the relevant insurance.

    If people read my post and start talking about “free markets” etc….then you really have no idea about the issue I am raising. It has nothing to do with what is economically correct, or what will increase competition (as indeed the introduction of Uber has sparked innovation even within the taxi industry).

    What this post is all about, is the stuff nobody thinks about – but really is the ONLY thing people should be thinking about. If Uber X can clearly and legally set out its relationship, rights and obligation with its drivers vis a vis personal injury/death then I think Uber X will be a very welcome addition.

    However until this happens I believe there is a really important safety risk. And again – I do not want people reading safety risk and like Leith writing anecdotal evidence about bad taxi drivers. I am talking about LEGAL risk. It is in no circumstance valid for someone to contract out their right to compensation for personal injury/death.

    This is not acceptable in a first world country.

    • Mark HeydonMEMBER

      Sorry, Pao2gre, you have this almost completely wrong.
      Yes, comprehensive insurance does not cover liability for bodily injury, but every state in Australia has an insurance scheme of one type or another, which does cover it, and it is compulsory – the car cannot legally drive on the road without having this compulsory cover.

      In Victoria, the subject of this post, the TAC covers this risk. Quoting from its website:
      “The TAC covers transport accidents directly caused by the driving of a car, motorcycle, bus, train or tram. The TAC can provide support services for people injured in a transport accident as a driver, passenger, pedestrian, motorcyclist, or in some cases, a cyclist.

      The TAC is a ‘no-fault’ scheme. This means that medical benefits will be paid to an injured person regardless of who caused the accident.”

    • Um, aren’t you totally forgetting compulsory third party insurance, which protects passengers, other drivers and pedestrians in the event of injury? So, unless the Uber driver is driving unregistered, you are always covered?

      • “CTP covered in rego costs here in SA, presume similar in other states.”

        Same for Victoria and I would assume every state and territory in Australia.

        “When you register your car, part of the cost is the Transport Accident Charge (TAC charge or TAC Premium). This is Compulsory Third Party (CTP) insurance. Transport accident charges are used to pay for treatment and support services for people injured in transport accidents but does not cover damage to cars. For more information on the transport accident charge, visit the Transport Accident Commission (TAC) website.

    • Wrong

      Qld – “CTP insurance indemnifies vehicle owners and drivers who are legally liable for personal injury to any other party in the event of a motor vehicle accident. Your CTP insurance will cover you for personal injury caused by, through or in connection with the use of the insured vehicle in incidents to which the Motor Accident Insurance Act 1994 applies. It will cover you for claims made against you by other road users such as drivers, PASSENGERS, pedestrians, cyclists, motorcyclists and pillion passengers.

    • ” there is no contract terms outlining this cover. It is simply a word of mouth PR release saying that Uber will cover drivers up to $1m. ”

      So they have released a public document on behalf of the company stating this, well then that’s an implied contract. If its a PR release then its not word of mouth as you state. Its now renders uber to legal liability should they not follow through.

    • So wrong.

      From Uber- “All ridesharing partners must be at least 21 years of age, and drive a registered, 2005 or later model four-door vehicle under a full driver’s licence. All ridesharing partners must also pass a rigorous criminal history police check, as well as undergoing a driving history check provided by the State transport authorities – The Roads and Maritime Services in New South Wales, VicRoads in Victoria, and the Department of Transport and Main Roads in Queensland.
      As a minimum, all ridesharing partners are also required to have a current policy of compulsory third party (CTP) and third party property insurance.
      But we don’t stop there – we want to ensure that riders, as well as members of the community, are as protected as possible. That’s why all ridesharing partners in Australia are also covered by up to US $5,000,000 contingent coverage for bodily injury and property damage to third parties by a large global insurer rated A+ by A.M. Best.
      This means that if, in the event of an accident, a ridesharing partner’s own personal CTP or third party property insurance is exhausted or does not apply for any reason, passengers, pedestrians, other drivers, and the community at large can rest assured knowing that ridesharing partners remain covered by a robust first-class policy”

      • Exactly the kind of responses I expected.

        Lets get a couple of things straight:


        Read the NRMA policy. Specifically go to page 57 which outlines the liability cover for all four forms of insurance (including comprehensive and third party). It specifically says that the $20 mill cover does not include personal injury/death.

        For the layperson: NRMA will not insure you (whether third party or copmrehensive) for personal injury/death. I know everyone here likes to just muck around and write whatever comes off the top of their head – but honestly – just because you can google does not make you an expert in anything.


        The Patrician – do you actually know what contingent coverage is? *Sigh*

        In the US, a Uber driver accepted a job, and on the way to pick up – he killed a 6 yr old girl. As the passenger was not yet in the car Uber insurance did not cover the driver. So what happened? The driver had to use his own personal insurance to cover the death. However, this was in the US. As I just explained above – in NSW NRMA will not cover personal injury/death.

        To cover this gap, Uber has implemented contingent cover. What does this mean? It means that if the drivers insurance will not cover the personal injury/death, Uber will kick in (MAXIMUM AMOUNT) $100k. So in other words, if I am an uber driver and I accept a passenger and on the way kill a person then that persons family will get $100k.

        Leith – can you please write up a follow up post explaining all of the above in much greater detail. You are very knowledgeable but it seems from the replies that people actually believe in soundbites rather than detail.

        When Uber says $5 mill cover, it includes the maximum for property damage – not personal injury.

        Guys just because you know finance/economics does not make you experts in absolutely everything under the sun. Be humble, read and then respond.

      • Dude you’re looking at the wrong brochure. The NRMA brochure does not include their compulsory third party offering.

        In all states of Australia compulsory third party insurance is included in registration costs, to cover all human injury in the event of an accident. See this page:

        At its heart CTP greenslip in NSW protects you against claims from others arising from injury or death as a result of an accident. It basically exists so you won’t be held personally liable for accident-related injury expenses.

        This means that anyone who uses Uber is covered by the same system of Compulsory Third Party that covers fiscal liability of anyone driving a registered car, whether it is for private purposes or commercial purposes. This system exists in Australia to ensure that no matter the circumstances of the accident, the human life/injury aspect is always fully covered, no matter who is at fault or the status of their insurance. Your comparison with what happened in the US is totally irrelevant to Australia.

        You ask us to be humble, read and respond when you seemingly don’t even understand one of the most basic aspects of car insurance in Australia.

  7. Couple weeks ago i called for a taxi. When i called the operator said they had plenty sitting idle less than 1km from my location.

    1 hour later and 3 phone calls i was still waiting.
    Each time i called to ask where my taxi was the operator said the job had been tagged as collected. The asshole taxi drivers assigned had picked up some randoms while driving to my location apparently.

    Just stupid and disgraceful customer service.

    • There was a article by a journalist sometime back detailing her uber experiences. She used it 3 times and twice she got a actual taxi, where the drivers collected her via uber and not the taxi dispatcher.

      Seems to me this is all about revenue protection for the vested interest brigade.

  8. Phil the engineer

    @ Pao2gre – you linked to a comprehensive insurance policy document.

    Please re-read the comments above yours.

  9. @Phil the engineer

    Come on mate:

    Page 2 of the policy document:

    You can choose from these 4 types of insurance
    • Comprehensive Plus Insurance – our top cover
    • Comprehensive Insurance – our standard cover
    • Third Party Fire & Theft Insurance – our basic cover
    with some extras
    • Third Party Property Damage Insurance – our
    basic cover

    I am sure you can read.

    And its funny how everyone goes silent…

    I have no issue with UberX or anything else. I am simply trying to let people understand that just because you are innovative and entrepreneurial does not mean that everything you do is amazing. With public services comes the legal obligations. Its not red tape its just ensuring equity.

    • Tassie TomMEMBER

      Thank you for your contribution.

      These are sort of the concerns I was trying to articulate above, but much less eloquently.

      Yes, the taxi industry is substandard, but that is a separate issue to those that you are describing, but they are being merged a lot in this debate.

      Thanks again.

    • No one went silent Pao2gre, there’s only so many times you can be proven wrong before it gets boring.

      The NRMA document you linked covers their comprehensive, fire/theft and third party property insurance. I’m not from NSW, but as far as I can tell the insurance PDS you linked is completely different from the CTP Greenslip which is required IN ADDITION (and provides for compensation for people killed or injured in a motor vehicle accident).

      It works a little different in SA (where I am), but Third Party PROPERTY (or comprehensive/fire/theft) Insurance and Compulsory Third Party insurances are purchased separately (in SA CTP is paid through registration).

      You’ve come out swinging strongly and keep missing. It’s probably time to hand in your bat.

  10. @Mav Mate – again. Do not presume because you can google that you understand what you are talking about:

    **Basic CTP Green Slip does not provide cover for at-fault drivers. In the event of the real scenario I outlined above, if that driver only had the standard green slip – he would have had to fork out a great deal of his own money – and if he had no money then what?

    **Because the green slip does not provide cover for at-fault, many insurers have included at-fault coverage. An example is from GIO below:

    If you are at fault, you will be covered for $5,000 for pretty much everything except death. In other words, if you lacerate someone and leave them in a hospital for 4 months , your insurance will give you $5k. That $5k definitely would not cover the legal expenses, so who pays the remaining $100k plus for the loss of income, lasting damage etc of that person?

    Come one mate. It is one thing to say that UberX is innovative, entrepreneurial and a stimulator for competition, but it is totally another to suggest that EVERYTHING ABOUT IT IS PERFECT.

    Please next time Mav actually do some research and come back to me before you try and lecture me about this topic.

    And for the record I do not own a taxi, have never owned a taxi, have never been a taxi driver nor am I a taxi driver. I am simply someone who believes that competition needs to work with public rights and not simply contract them out as the posters above would have us do.

    • Pao2gre, I think your posts are grossly misleading. Did you even read the document you linked?

      “Your CTP Green Slip provides cover for any people injured in an accident caused by the driver of your vehicle. This cover includes the cost of all reasonable medical treatment and compensation for economic loss and even pain and suffering in the case of major

      The $5,000 is for the drivers medical expenses.

      Another swing. Another miss.

      • +1 BB. Misleading is the appropriate term….and persistent. We have just witnessed the debut of particularly nasty breed of troll.

        A demonstration of the fight Uber has ahead.

    • Wow. just wow. It seems you can’t even read your own examples .. which never mentioned personal injury to the driver!! Just the passenger and other third parties (in the US). i.e. all of the people injured/dead in your examples are covered by CTP.

      Are you trying to do a bait and switch now? Are you now worried that UberX drivers are not sufficiently covered for their own injuries? LOL.. I think they are more knowledgable than you are.

  11. The reason why the government doesn’t allow it is because the Uber-X drivers are using government-plated cars (they have title to the vehicle) and government-provided licenses (they issue their licenses).

    It’s their rules and their property – and their insurer has their neck out if anything goes wrong.

    If they want to do things lawfully they’ll have to step out of the Crown’s jurisdiction just as Mark McMurtrie and others have.