Another taxi rent-seeker enters the fold

By Leith van Onselen

Hot on the heals of Cabcharge, another taxi industry rent-seeker has entered the fold, with Live Group threatening to sue the New South Wales Government for daring to lower the 10% surcharge on electronic payments. From The AFR:

Managing director Reuven Barukh said he will seek compensation for its losses if the government insists on ­cutting the tariff from 10 per cent to 5 per cent on December 12…

“We reserve our rights for any ­damages which may be caused by the actions of TfNSW, including, but not limited to, misleading the market on how the taxi non-cash payment ­surcharge is structured.”

Since the Victorian government introduced the same 5 per cent cap in February, including GST, Live Group’s revenue there has more than halved due to the cut being more than half the original tariff…

Live Group and other taxi payments providers such as Ingogo argued the caps were reducing competition rather than increasing it.

Seriously, you cannot make this stuff up.

The broader question that regulator’s should be asking is: why should consumers pay a surcharge at all for electronic payments, beyond basic cost recovery?

Retail outlets certainly do not charge such egregious fees, so why should the protected taxi industry be allowed to do so?

Widespread competition from Uber-X cannot come quickly enough.

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  1. Well here is a clue.

    Of that 10% the driver (or someone) gets 4% which is interesting because I thought the driver doesn’t get any of the Cabcharge slice.

    That is probably the attractive of this company’s model. By sharing a slice of the 10% with the driver they get the driver to defect from Cabcharge.

    Here is a really radical solution – what’s wrong with doing what every other business does and provide convenient methods of payments as part of the service.

    Passing on the bank % fee is understandable and if people wish to avoid that they can pay in cash.

    What this company seems not to understand is that the cure for CabCharge is not spreading the infection further.

    But they do have my sympathies – the taxi plate industry has been pretty good at getting their own way for a long time to the detriment of drivers and passengers and they probably were trying to do the right thing by muscling in on Cabcharge’s patch of clover.

    Wonder if Robbo will mirror the Victorian Branch and promise to protect them from new business models in the lead up to the NSW State Election.

  2. Live TaxiEpay is not a bank. The problem with reducing the service fee is that Live and it’s competitors are not able to provide commission to the driver for utilizing the device. This is how they were able to take market share from cabcharge. Now that that will be removed there is no need for drivers to have 2 terminals. And drivers will select cabcharge because they are the only device to accept cabcharge cards. It would be fair if these were enabled across all payments providers because only then we would have a level playing field. Cabcharge will now go back to enjoying it’s monopoly.