Close this search box.

Cabbies caught out by change

Taxi licence owners have been crippled by state government reforms and deserve compensation, writes James Gray-Foster.

After an enquiry last December, more than 100 amendments were made to the operation of the taxi industry. In total, 139 changes were recommended.

According to the Government Response to the Taxi Industry Inquiry document, reform was needed to “address ‘long-standing and deep-rooted’ issues and recommend ‘sweeping and enduring reforms’ that would improve low levels of public confidence in taxi services.”

The general consensus is that the inquiry has been effective. Many of the proposed changes have been supported, and are considered both necessary and beneficial to the industry.

However, a handful of the alterations have angered many.

Taxi-licence holders in particular have struggled in the wake of a number of the legislative changes.

At the heart of their grievances is the devaluation of the once-coveted taxi licence.

Under the new legislation, licences that were purchased for as much as $530,000 are now practically worthless.

In an effort to encourage new entrants, they will now be available for as little as $22,000 per annum and in unlimited supply.

Buying an old licence would now cost 20 times the current price, eradicating the market for the licences.

“They are putting a nil value on our licences. Because if we wanted to sell it, there’s no buyers out there,” says Georgia Diamantopoulos, a single licence owner.

The Liberal government has also refused to offer any form of compensation. Instead, licences will increase in value at the rate of CPI minus 0.5 per year, a miniscule rise that does little to recover the hundreds of thousands of dollars already lost.

The implications are far-reaching for many proprietors and their families. What was once a retirement fund or an inheritance has now been taken away.

Taxi owner-operator, Norm Sierak, says the licence developments could even be considered treacherous in nature.

“They’ve [licence owners] been encouraged to work their way through the industry by the government,” Sierak said.

“You drive, then buy your licence and keep that licence when you retire – that’s your superannuation. And now, they’ve virtually stolen the taxi industry’s superannuation.”

The situation is worse for plate owners.

Under the inquiry revisions, phone-booked only (PBO) car licences will also soon be accessible to the public.

PBO cabs function in a similar way to the archetype. They are hire cars, albeit inexpensive to run in comparison.

Operatives also adhere to far more lenient procedures, meaning they can charge cheaper fares at a fixed price.

Diamantopoulos says conventional taxis will be forced out of business if PBO’s are allowed on Melbourne roads.

“Now what they’re saying is with these PBO’s – costing $40,00 dollars a licence – you can put any car you like on the road,” Diamantopoulos states.

“There’s no accreditation, there’s no strict law: you don’t have to have a GPS, you don’t have to have a camera, you don’t have to have all the safety equipment that a taxi has to have on board and that’s going to kill the industry. “

In what is supposed to be a positive industry-wide revolution, licence owners feel many of their rights – and assets – have been compromised.

“The only thing we can get them [the government] to do is, firstly, get them to do away with the PBO’s idea,” Sierek says.

“There is no market for them. There’s already the hire-car market, which covers that area, and all they’re going to be is a down-market hire-car. If the government wants to run the taxi-industry, they should buy the licences back and lease them out to recoup their money.”

At the very least, these people deserve financial compensation for their enormous investments. But they’re fighting for more than that: owners are now battling for their livelihoods.


James Gray-FosterTHUMBJames Gray-Foster is a third-year Bachelor of Journalism student at La Trobe University. You can follow him on Twitter: @JamesGrayFoster

Feature image: Twitter – @theage_photo

Related Articles

Editor's Picks