Melbourne taxi drivers have this morning blockaded Bolte Bridge (linking the CBD to the airport) in protest to the legalisation of ridesharing services like Uber and what it perceives as inadequate compensation by the State Government. From ABC News:
Drivers are angry at the Government’s move to legalise the ride-booking service Uber, introduce a $2 levy on all trips made by hire cars and taxis, and abolish the current model of taxi licences.
The Victorian Taxi Association called the move to introduce a levy “unworkable”, and said it was not the best way to compensate the industry in response to Uber.
Protesters have also gathered on the steps of Parliament House in Melbourne to rally against the changes.
The scrapping of taxi licenses has also been met with disapproval by the industry. The Government plans to buy them back at $100,000 for the first and $50,000 for the second.
Owners of more than two licences will not receive anything for the others.
The taxi association has argued licence-holders should be paid $250,000 for each licence.
Linda De Melis from Victorian Taxi and Hire Car Families said her family had been in the industry for 50 years and owned six licences.
She told ABC Radio Melbourne the compensation was inadequate.
“We’re not opposing industry change, the Government can dismantle the industry if they choose, but we as licence-holders should not have to pay the price,” she said.
There are two issues here.
First, I wouldn’t have thought that blockading the main route to the airport is the best way to garner public sympathy and support. If the taxi industry wants Melbournians to dislike it even more, this is an excellent way to go about it.
Second, why does the taxi industry believe that license holders should automatically receive $250,000 per licence in compensation?
If I bought an inflated house and land package on the fringe, would I automatically be entitled to compensation if the Victorian Government axed Melbourne’s urban growth boundary, causing available land supply to increase and prices to drop? I don’t think so.
If I owned an expensive apartment and the government approved the building of a highrise complex that blocked my view, and reduced my apartment’s value, am I automatically entitled to compensation from the government? The answer is no.
If my firm goes out of business due to international competition via a ‘free trade agreement’ signed by the government, am I entitled to compensation? Again the answer is no.
If I owned shares in Qantas, and the government opened domestic aviation to foreign carriers, would I automatically be entitled to compensation? I think not.
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.
