Consumers back taxi overhaul

Wanted: taxi services commissioner, consumer guarantees, complaints handling, lower credit fees

Victoria’s specialist independent consumer law and advocacy centre, Consumer Action Law Centre, believes the recommendations of Professor Allan Fels’ Taxi Industry Inquiry will significantly improve the industry if implemented correctly. But the Consumer Action said that the Government will need to act in the interests of the public, in the face of strong industry lobbying, if Victorians are to benefit from better, more efficient, services.

‘Recommendations to establish a Taxi Services Commissioner, boost competition, and reduce surcharges for electronic payments are welcome initiatives that could have tangible benefits for consumers. Existing industry arrangements, including the fact that the industry is dominated by a few players with taxi licences who also deliver services such as booking, training and payment facilities, contribute to poor consumer outcomes. So we’re keen for the Victorian Government to accept the Report’s recommendations and implement them effectively,’ said Gerard Brody, Director of Policy and Campaigns at Consumer Action.

Mr Brody said that, should the Government adopt the Report’s recommendation to establish a Taxi Services Commission, the new body should have consumer welfare as a specific objective.

‘We know initiatives to increase competition will have little impact unless consumers are educated about their options and are confident with the system. Certainly the creation of an independent and effective Taxi Services Commissioner, that has the interests of consumers’ as a stated priority, could ensure benefits of competition flow on to consumers.’

Consumer Action’s submission welcomed the Report’s recommendation that would see the surcharge for electronic payments  brought under regulation and initially halved from ten to five percent—but the Centre believes this may still be an inflated figure.

‘Surcharges are meant to cover the costs associated with using electronic payment methods, and average surcharges imposed by merchants across other industries are well below five percent. Especially in light of the Reserve Bank’s recent declaration that surcharges should reflect the reasonable cost of making the payment, we think allowing a five percent surcharge may be excessive,’ said Mr Brody.

Consumer Action endorses the Report’s recommendations that:

  • authorised taxi organisations be made subject to the consumer guarantee provisions of the Australian Consumer Law;
  • a public register of all approved drivers, permit holders and authorised taxi organisations be established; and
  • service providers be responsible for the resolution of complaints regarding service delivery.

But the Centre’s submission argues that if service providers fail to show improvement in managing and resolving complaints, they should be required to become a member of an external dispute resolution scheme, such as the Public Transport Ombudsman. The Centre also argues for compensation to be payable to consumers if service guarantees are not met.

Mr Brody said the consumer sector was encouraged by the Victorian Government’s interest in improving the taxi industry, demonstrated by the fact that it commissioned the inquiry.

‘Everyone seems to agree that the industry needs a shakeup, and this report gives the Government the chance to do just that. We’re urging the Government to embrace the Report’s recommendations because, if it lets this opportunity slip through its fingers, it could be quite some time before we have another chance.’

To read Consumer Action’s submission, click here: Taxi Industry Inquiry—Response to Final Report.