Taxi Industry Inquiry - Interim Report
September 2004
Table of Contents
Foreword ........................................................................................................... 2
Executive Summary .......................................................................................... 5
Options for Reform to the Taxi Industry ............................................................. 9
Overview of the Current Key Industry Relationships ....................................... 15
A Regulatory Framework for the Taxi Industry ................................................ 18
 Co-Regulation
 Performance standards
Entry and Participation in a Co-Regulatory Framework ................................... 29
 Nexus plates
 A model for the future: streamlined licensing arrangements
 Operation of networks and dispatch systems
 Premium Services
The State of the Industry – Thriving, Surviving or Going Under? .................... 38
 Training
 Remuneration
 Driver safety
 Attracting and retaining drivers
A Preliminary Review of the Financial Structure of the Networks .................... 50
The "No Destinations" Trial ............................................................................ 54
Where to from Here? ....................................................................................... 64
 Relationship between the regulator and the industry
 Creating a culture of innovation
 Participation in decision-making
 Real solutions to customer service issues
 WATs
 CBD availability and traffic management issues
 Vehicle inspections
Conclusion....................................................................................................... 81
Appendices:..................................................................................................... 83


Submissions Received
IPART 1999 Recommendation Implementation
1
Foreword
For most people, taxis are not a regular public transport service. But they are
an important, fast, individualised adjunct to buses and trains and provide
essential transport for people with mobility problems.
As ‘public use’ vehicles, they reduce the need for ‘private use’ vehicles and
therefore have an important role to play in reducing the safety and
environmental risks associated with ever-increasing private car use.
However, it is clear that in New South Wales at the moment, they are not
delivering the service they need to.
The Inquiry takes the view that for decades now NSW state governments of all
colours have taken the wrong regulatory approach to the taxi industry.
This is particularly the case given that taxis are private businesses and do not
attract the subsidies that other transport providers operating in the public
sector receive.
Over a very long time the regulatory framework has become distorted. It has
protected the interests of established industry players while becoming punitive
and ineffectual in managing customer service.
It is not an effective structure for proper consumer protection, surety for
investors and workforce or business innovation and growth.
The results have undoubtedly impeded the development of the industry and
strained relationships between the Regulator and the operators.
The essential aim of this Inquiry is to identify impediments to the development
of a thriving, high quality, service focussed taxi industry in New South Wales.
This Interim Report canvasses some strategies for consideration by
Government and by industry participants, which may provide a blueprint for
future.
There is a strong desire and an active commitment on the part of drivers,
networks, owners and operators in the industry to work together to improve the
availability, reliability and quality of taxi services.
In order for this to happen, a new approach to regulation is required, one that is
based on the Government setting acceptable access and performance
standards and the industry then being allowed to get on with the job.
This approach is based on a different style of collaboration between industry
and Government.
The experience of regulation, and improving service in other jurisdictions has
been examined by the Inquiry and we believe that there are models currently in
2
operation elsewhere that are worthy of application in a New South Wales
context.
The existing arrangements have evolved in an ad hoc way and although the
Inquiry has presented a somewhat harsh picture of the current limitations, it
has done so only to make the point that the current approaches are outdated
and must be restructured.
The current regulatory framework must change to reflect more selfdetermination for the industry. Industry must pay greater attention to
establishing, monitoring and achieving minimum customer service standards.
The government must step back from operational issues and focus on basic
regulatory hurdles like safety, training and service benchmarking.
A co-regulatory approach means some previous decisions such as the ad hoc
issue and variation of licences will need to be addressed.
A co-regulatory framework will also require further work to identify key areas of
change. This will include not restricting new opportunities for competition on
the delivery of industry services including dispatch. It also includes not
restricting innovative services including “trunk” or private networks, provided
they operate within any performance and access standards agreed with the
Government.
Discussion, development and implementation of these initiatives will be the first
part of industry and government building a new relationship.
This must involve drivers and will require the Ministry to reform its policy and
consultation activities. All sectors of the industry will have to be included in this
process for the Ministry to have real credibility in its new role.
It is time to move forward.
In considering the best way to facilitate the necessary change, the Inquiry
proposes that an independent Task Force be established. The Task Force will
provide the impetus for a new policy direction to be established and for
solutions to issues relating to training, driver retention and the operation of
networks and dispatch services to be developed in a collaborative and
impartial way.
The purpose of the Interim Report is to suggest some options for future reform
and to propose that permanent improvement in the operation of the taxi
industry in new South Wales is really only achievable within a co-regulatory
framework in which the Government monitors performance rather than
supervises or directs business operations.
It provides a platform for further consultation and options development and the
strategies it proposes will be further researched and tested over the coming
months.
3
Subsequently, the options set out in the Interim Report will be further
developed with legislative and other solutions consolidated in the Final Report.
In the next phase of the Inquiry, an Issues Paper will be prepared for
circulation amongst all stakeholders. Further consultations will take place
before the preparation of a final report by the end of the year.
4
Executive Summary
The Inquiry has received over one hundred and sixty submissions and has
undertaken many interviews. From this input, a number of issues have
emerged from many stakeholders across the industry:

There is concern about the capacity of the Ministry to deliver on policy and
manage positive directions for the taxi industry under the current regulatory
regime

Customer demand is creating new services but the regulation is not
keeping pace, nor has the Ministry demonstrated the capacity to develop
policy to respond to obvious needs

The “no destinations trial” will not improve taxi services to the public

It will not lead to performance standards improvements in the industry in the
long term

Drivers are increasingly disenfranchised and leaving the industry at an
alarming rate, thus compromising the ability to deliver services

The industry needs leadership, transparency and participative decisionmaking if it is to move forward and create an ongoing culture of customer
service, innovation and improvement.
The Inquiry believes the future role of Government, through the Ministry for
Transport, is to work with the Industry to establish and evaluate the
achievement of minimum performance standards.
While the Ministry has a role to play in facilitating improvements in the industry,
it should not be focussed on imposing onerous and detailed conditions on how
the standards are met, as these are business decisions for industry
participants.
Therefore, the Ministry’s key role is to work in partnership with the Industry to
establish effective monitoring of the minimum standards set and to ensure that
all industry participants are working together to meet them.
For its part, the Industry, through the various Networks, should develop its own
policies, procedures and business strategies to suit their own objectives
consistent with the ongoing achievement of the set minimum standards.
Industry needs to take a primary role in ensuring minimum performance
standards across the entire industry are met.
A co-regulatory approach, between Government and Industry, is the
optimum result.
There are divisions that currently exist between the Government regulator, the
industry peak body and the various owner, driver, lessee and other interest
groups within the industry. This is certainly not a new phenomenon.
5
As one taxi network noted in its submission:
…Unfortunately lack of communication between the Ministry and the
Industry has resulted in a breakdown culminating in this Inquiry…
There are a number of complex and long-outstanding issues, which have
contributed to this unproductive relationship between the Ministry of Transport
and the Industry at large.
Some examples of these issues are as follows:

There are no formal network performance standards in place. In 1993, the
former Department of Transport established “Interim” standards but despite
several iterations and revisions to the regulation, these (which have been
widely criticised as being irrelevant and impractical) have never been
formally adopted.

Conversely, the Regulations enacted in 2001 are predominantly focused on
drivers and operators and are directed towards punitive measures rather
than providing a positive customer service focus.
There are perceptions within the various Taxi Networks that the Regulator
tends to become too involved in issues that should be left to the Industry to
manage.
Directions by the Regulator to attempt to restrict the operation of trunk
networks and impose a twelve-month trial of a “No Destinations” policy in the
networks’ radio booking services are two recent examples.
There has been media and industry speculation that one of the primary
motivators for the No destinations trial was the desire of some networks in
Sydney to eliminate the competitive threat posed by trunk radio networks, who
are establishing themselves as providers of alternative high quality service for
lucrative corporate and elite clients.
This approach to regulation, in respect of the trunk radio issues, begs the
question – why would the government want to prohibit the operation of a
service that appears to be thriving in response to customer demand and direct
the networks in the operation of their day to day business?
Further, one might ask whether banning the communication devices is going to
have any real effect and how does telling the networks how to run a booking
service improve customer service standards when no such standards are
mandated?
From the Government’s perspective, the real danger of the current operation of
trunk services would appear to be the fact that they operate outside of the
regulatory framework and therefore are not subject to safety and reporting
standards, in the same way that the major networks are.
6
This is not only a potential safety risk, but also creates a cost distortion in the
market place, in that they are able to run what is a parallel business to the
major networks without having to bear any of the additional associated costs.
At the most basic level, a regulation which centres on regulating the use of
radios in a world where third generation mobile phones are being superseded
is already redundant.
In respect of the No Destinations trial, this inquiry has recommended the
immediate cessation of the trial and proposes a suite of actions to implement
service standards, revise the regulatory provision regarding private or ‘Trunk’
networks and introduce premium services.
Beyond the operation of the trial, the inquiry has focussed on a number of
other key issues that are of a concern for the industry.
At present, there are serious and systemic problems currently being
encountered in the recruitment and retention of taxi drivers. This is an area of
significant concern throughout the whole industry that must be addressed
urgently.
Whilst it is acknowledged that in a period of low unemployment, difficulties can
be expected in recruiting drivers to the taxi industry, the current situation is
unsustainable with an increasing number of taxis laying idle, particularly during
the week as owner/operators and bailors cannot attract or retain drivers.
There are a number of identifiable factors contributing towards the driver
shortfall including:

The high cost and time involved in undertaking training.

The unique requirement for taxi drivers to be registered for GST purposes.

The very poor financial returns for the long hours involved.

The requirement for the driver to accept the total revenue risk under the
current IRC/Bailor/Bailee arrangements.

The almost complete lack of access to any reasonable employee leave
entitlements.

The absence of any career path and/or opportunity for drivers to aspire to
some form of promotion or recognition within the industry.

The cessation of the former taxi driver seniority system, which enabled
drivers with extended and satisfactory service to qualify under certain
conditions for the issue of a taxi licence plate.
The inquiry has put forward a number of options that will encourage the
development of a taxi-driving vocation, to keep committed quality drivers in the
industry for longer.
7
Increasing the numbers of drivers will not matter unless the whole of the
industry is able to work together towards the development of a culture of
service delivery. This will not happen with top down dictums from networks or
even the Regulator.
Unless all sectors of the industry can play a more active role in decision
making on core service delivery issues such as safety standards and
performance measures, nothing will change and customers will continue to
seek alternative transport options.
Participative decision making is an essential prerequisite to innovation and
reform.
Drivers and owner/drivers need greater representation and room needs to be
made for greater competition within service delivery in key areas of the
industry.
The inquiry has suggested that driver representation be included in the
membership of the peak consultative body, the Taxi Advisory Committee and
recognition of driver associations for other consultation processes.
The inquiry has also identified a range of issues that will require further
analysis and consultation, concerning the structure and financial viability of the
industry, as well as entry conditions and training.
Our views on possibilities for the future are included in the following chapters.
It has become clear during this preliminary work that in order to drive reform in
the industry over the next two years policy and regulatory directions should be
established through the operation of an independent industry task force,
working closely with industry, through TAC and other consultative forums as
required.
In the last three months, the inquiry team has sought to uncover and review
issues that have been restricting the growth and service quality of the industry
for more then a decade.
We believe there is a way forward, but there is a long way to go.
8
Options for Reform to the Taxi Industry
1. Examine the role of taxi companies, co-operatives and
networks and their impact on customer service standards.
Core Issues:
-
Establish an Industry Reform Task Force to lead change over the next two
years.
-
Regulation versus de-regulation for the Taxi Industry. A co-regulatory
approach is the preferred option for NSW.
Options for reform:









An independent Industry Reform Task Force should be established to
facilitate regulatory reform and business innovation in the Industry along the
lines set out below.
The Industry Reform Task Force should be mandated to establish
appropriate relationships with all industry participants and drive regulatory,
policy and procedural reform in the taxi industry, with the aim of instituting a
regulatory and administrative framework that supports improved customer
service.
The Industry Reform Task Force should operate for two years and during
its life, TAC would serve as the principal industry advisory body, reporting
to the Chair of the Task Force.
Revenues currently collected from the Operator Levy should be used to
fund projects and activities identified by the Task Force.
The Task Force should develop options for developing an industry vocation,
based on improved training and testing arrangements.
The regulatory framework for the taxi industry in New South Wales should
be confirmed as a co-regulatory one, between the Ministry of Transport and
the Industry, with an emphasis on minimum performance standards as the
primary measure of compliance.
Appropriate resources should be identified to ensure monitoring, robust
analysis and public reporting can take place.
Commensurate with the above, the regulation should be reviewed to ensure
that it supports the intent and effect of the minimum performance standards
and confirms a co-regulatory framework for industry participation and
operation.
The Minister should consider asking IPART for assistance in identifying
what data requirements would be necessary to include in the performance
standards to ensure that it will be possible in the future to develop an
accurate and impartial industry cost and revenue model.
9
2. Review the cost structure of network arrangements and
their impact on customer service levels and industry
competitiveness.
Core Issues:
-
The financial profile of the industry: what is the cost and revenue model?
-
Outstanding issues concerning license issues and their effect on the
market.
-
Are there ways to streamline license issue and ease entry into the market?
Options for reform:







IPART should be formally requested to join with the proposed Industry
Reform Taskforce to undertake a comprehensive review of the cost and
revenue components of the Taxi Fare Model including a specific analysis of
current radio/dispatch service costs.
The financial implications involved in the issue, sale, transfer and valuation
of Nexus Plates should be further reviewed.
An analysis should be undertaken of current insurance costs in liaison with
the taxi and insurance industries with the objective of reducing premiums, if
possible.
The issue of Nexus Plates should be referred to an independent body for
review of the probity of the issue, variation and transfer of the licences.
Recommendations should be developed regarding the continuation of the
paired licence scheme and any operating conditions that should be
reviewed in relation to affected WAT and Nexus Licences.
Options for a streamlined licensing system should be developed using
standardised licensing conditions. A new system should be ready for
implementation by 31 December 2004.
Business rules for evaluating any proposed variation to conditions once a
licence is issued should be developed and implemented, to ensure that any
changes to licences are only made if they are in the public interest, and that
any changes are consistent within the licensing framework.
3. Explore options for alternative network structures that
could provide better customer service. This would include
analysis of the current unauthorised trunk services.
Core Issues:
-
What is the optimum approach to managing trunk networks in order to
ensure customer preference is met and a level playing field is maintained?
10
Options for reform:






Legislative provisions regarding the prohibition on private booking services
(usually referred to as trunk networks) should be revised urgently. All
booking services have to operate in a level playing field, with agreed
performance, reporting and safety standards adhered to by all.
Changes should be made with the primary objective of better defining the
functions of a network and clearly separating it from a taxi dispatch service;
mandating the registration of all dispatch services and imposing reporting
and performance standards on their operation.
While mandatory connection to a network should be maintained, the
legislative framework should allow for competition in relation to dispatch
services and negotiation on the fee structure imposed by networks.
Effective compliance procedures should be developed and applied
It is absolutely essential that there be no offloading of taxi services into hire
cars or to other service providers. An absolute prohibition with stringent
penalties for non-compliance is to be imposed as a license and
accreditation condition, effective immediately.
Until new provisions are drafted, a moratorium on action against Trunk
Networks should remain in force and the current regulations prohibiting the
use of certain communication devises should be withdrawn.
4. Review the practice of networks referring bookings to other
networks (“offloads”).
Core Issues:
-
Customer Service improvement and managing offloads.
-
Develop options for universal offloads within the industry to improve waiting
times.
Options for reform:


Ensure that the regulation does not unreasonably restrict the
implementation of premium services and allows for inter-network taxi
offloads.
In drafting any changes, full consultation with the industry should take
place.
5. Consider the introduction of a premium service within the
taxi industry.
Core Issues:
-
Customer Service improvement: provide competitive premium services.
11
-
Customer Service improvement: control offloads out of the industry by
immediately introducing new authority and accreditation conditions.
Options for reform:




The Taxi Industry should be encouraged to introduce competitive premium
services, with offloads to be managed within the taxi industry.
The Networks should demonstrate a capacity to operate these services
while still providing adequate support for the operation of general services.
None of these services should operate at the expense of providing general
taxi services and performance standards for both services should be
collected and monitored separately. Networks may be subject to penalty if it
appears that general services have declined.
A variable booking fee should be established to allow for premium services
to charge a higher fee for a better quality, more personalised service.
A maximum booking fee for premium services should be determined as part
of the next round of IPART fare determinations.
6. Examine the impact of proposed service improvements,
including the no-destinations trial, on current customer
service levels.
Core Issues:
-
No destinations trial: an inappropriate policy that should be terminated.
Options for reform:

The “No destinations” trials in Sydney and on the Central Coast should be
terminated immediately.
7. Review network booking procedures to shorten customer
waiting times.
Core Issues:
- Primarily a business decision for networks; however, regulation will need to
be flexible enough to allow innovations
Options for reform:

The Industry Reform Task Force should consult with stakeholders,
including driver representatives, to agree on performance measures and
indicators.
12
8. Review driver training on network booking procedures.
Core Issues:
-
Other Driver issues of greater significance were identified by the Inquiry,
including Training, Seniority, Safety, Entitlements and Representation.
Options for reform:






Options for ensuring that drivers are able to access their entitlements
should be considered, including penalties for operators who attempt to
withhold entitlements.
Options for the establishment of a seniority scheme should be developed.
All taxi drivers should be compelled to wear seatbelts.
A Taxi Driver Safety Committee should be re-established
Fatigue management provisions should be investigated, with a view to
introducing mandatory provisions into the Regulation as soon as possible.
Levels of driver participation and representation in policy making forums
should be enhanced.
9. Determine ways to improve the industry focus on customer
service.
Core Issues:
-
A greater focus on encouraging innovation and enhancing service delivery
rather than imposing constraints on business
Options for reform:

The Ministry should work with the Taxi Industry on policy development and
look at options for significant improvements.
10.
Consider any other significant customer service issues
Core Issues:
-
The availability of Wheelchair Accessible Taxis (WATS).
-
CBD taxi issues, including, Supply and Traffic management.
-
Develop an improved industry operated vehicle inspection regime as part of
the co-regulatory approach.
13
Options for reform:

The Wheel Chair Accessible Taxi Taskforce should further investigate the
following issues:
-



Alternative/additional funding sources to provide further financial
incentives to WAT owner/drivers
New market areas for WAT vehicles
The level of booking fee for WATs and whether a lift fee is appropriate
to financially incentivise drivers to take WAT bookings;
Whether a Taxi Network should have a prescribed percentage of WATs
operating within its network (eg 10%)
Whether the Ministry of Transport should provide localised WAT targets
for metropolitan and country regions across NSW;
The applicability of a universally designed cab which would be for both
wheelchair and able bodied passengers; and
The Ministry of Transport should work closely with the Taxi Council and
Taxi Networks to ensure waiting times for WATs are comparable to
those of regular taxi services.
The Inquiry recommends a forum be convened to identify the problems
associated with supplying an acceptable taxi service within the CBD areas
of Sydney and North Sydney and provide acceptable solutions. More
specifically to address the issues of set down and pick up areas, the
location and number of taxi ranks but also to include other identified issues.
The Ministry liaises with the NSW Taxi Council in formulating a strategy and
vehicle inspection regime where the Ministry takes a less ‘hands on’ role
allowing a shift of responsibility from the Ministry to the Industry.
Ministry compliance staff should assume a greater monitoring role as
recommended by IPART. In regard to taxi presentation, this should involve
ATIS audits with removal of authorisation for ATIS non-compliance.
14
Overview of the Current Key
Industry Relationships
Taxi Industry Structure 1
Taxi Networks or
Cooperatives
Peak Representative
Bodies
Sydney
11
Newcastle 1
Wollongong 1
Country
1 per area
NSW Taxi Council (Networks)
NSW Taxi Industry Association
(owners and operators on industrial
matters)
Country
Taxi
Operators
Association (country operators)
Networks/CoOps
providing
booking
services
Sydney
Newcastle
Wollongong
Country
4
1
1
1 per area
Regulators
Ministry of Transport
via Passenger Transport Act and
associated Regulations
Roads and Traffic Authority
(some vehicle standards)
Accredited Operators
Taxi Licences on
issue
Sydney
Wollongong
Newcastle
Country
4853
134
159
971
(Networks
operators)
(Operators
drivers)
may
also
be
may
also
be
Statewide
5284
Authorised drivers
(Drivers may also be
operators)
Sydney
17794
Newcastle
627
Wollongong
546
Country
3765
Driver Representative
Bodies
Transport Workers Union
Taxi Action Group
NSW Cabbie Welfare Association
Key Participants
1
Figures provided by Ministry of Transport as at 9 Aug 2004
15

Licence Owners (also commonly known as ‘plate’ owners)
Licence owners may be simply investors who lease out their plates and have
no other interest in the taxi industry. They may own one or a number of
licences. Licence holders generally shoulder few responsibilities.
However, many licence holders operate and drive their own taxis (it is
estimated approximately 45% of licence holders drive their own taxis on a
regular basis).

Taxi Networks
Taxi networks were originally established as cooperatives of taxi owners.
Although the majority remain cooperatives, the two major Sydney networks
and the Central Coast network are now structured as companies.
Taxi networks offer a number of services to taxi operators and drivers,
however, the prime purpose of a network is to receive bookings from intending
passengers and dispatch those bookings to taxis attached to the network.
Networks are authorised by the Ministry of Transport. All taxis must be
attached to an authorised taxi network (if network available).

Taxi Operators
Operators are responsible for the day to day management and control of taxis.
They must have completed the approved operator training course, hold the
appropriate accreditation issued by the Ministry of Transport and comply with
the required standards. They are responsible for ensuring all drivers hold the
required authorisation and are also responsible for vehicle and driver
presentation.
Taxi Operators pay a monthly fee to a network to enable drivers of their taxis
access to radio bookings.

Taxi Drivers
All taxi drivers must complete an approved training course and hold an
Authority to drive a taxi issued by the Ministry of Transport.
In Sydney, drivers generally work under the ‘bailee/bailor’ system paying a set
fee to hire the taxi for a ‘shift’ (generally 12 hours). Drivers earnings are made
up of the total fares taken less the ‘pay-in’, cost of fuel, and in some cases,
cleaning of the taxi.
In areas other than Sydney, drivers generally work on a commission basis
where a percentage of the total fares is kept by the driver with the rest going to
the operator who pays for the car wash and fuel.

Peak Representative Bodies
16
The NSW Taxi Council is the peak industry body representing 69 taxi
networks, including 57 in country NSW. The Council liaises with various
agencies on behalf of the industry and addresses such matters as rank
locations, fare increases, driver and operator training and regulatory issues.
The Country Taxi Operators Association addresses similar issues on behalf of
country operators.
The NSW Taxi Industry Association is the registered Union under the NSW
Industrial Relations Act for licence owners and operators.
The Transport Workers Union is the only recognised union representing taxi
drivers on industrial matters, however, union membership levels are very low
(around 1% of authorised drivers).
Despite this, there are a number of driver groups across the metropolitan area,
including the Cabbie Welfare Association and the Taxi Action Group. These
are becoming increasingly active. There are several driver websites with wellpatronised chat rooms attached. In the past few months, a number of the
smaller groups have sought to amalgamate into a more formal driver’s
association. No formal announcement on the name and structure of the new
organisation has yet been made.
In addition to the general driver’s groups, associations of drivers who are
interested in supporting the operation of trunk networks are also emerging,
commensurate with the growth in this sector of the taxi market.

Regulators
The taxi industry in NSW is regulated by the Ministry of Transport pursuant to
the Passenger Transport Act 1990 and the Transport (Taxi-cab Services)
Regulation 2001. The Act and Regulations determine the roles of the various
industry participants and set out the conditions and standards applicable to
each group, namely, the networks, operators and drivers.
To a much smaller degree, the Roads and Traffic Authority determines
standards regarding vehicle condition.
17
A Regulatory Framework for the
Taxi Industry
Whilst some observers see regulation and competition in opposing corners of
the arena, the reality in a mixed economy is usually a blend of both. In
Australia, for example, imperfect markets are often regulated by the ACCC to
ensure that competitive outcomes are achieved or at least emulated.
In the taxi industry, a regulatory model is one where they are strict limits on
entry into the market and conditions placed on operation, as well as a
mandated fare structure.
A completely deregulated model places no restrictions on entry and allows
passenger demand to determine all service delivery standards, including the
fare to be charged.
Although debate has raged over the last decade with regard to the effect of
regulation on competition, the increasing trend towards deregulation has had
mixed results.
The experience in New Zealand, the United States and the United Kingdom
has been that the removal of entry restrictions initially increased the size of the
fleet, however, this meant that there were more taxis operating in areas
already well serviced and services in other areas declined.
It also meant that while some fares went down, trips outside main traffic areas
decreased dramatically and there was a much higher rate of failed trips.
Three of the six cities in the United States that deregulated market entry and
fares have re-regulated on consumer access and protection grounds (and in
response to public demand). Overall, profitability in the industry declined and
so did customer satisfaction.
In the United Kingdom, fares increased and there was a serious decline in
service standards.
After 9 years, quality based barriers to the rank and hail markets were
introduced to encourage self-enforcement of service standards, which have
made it unprofitable for anyone but owner-drivers to work this part of the
market.
The telephone market has become a separate market sector, with different
participants and different licensing conditions.
Both nationally and internationally, the success of taxi deregulation appears to
be dependent on a number of market factors.
There is evidence to suggest that the cost of regulation is borne by the
consumer and may also have a dampening effect on service improvement.
18
However, this needs to be weighed against the evidence that many of those
who have the greatest need to use the service, namely the aged, the disabled
or those that live away from direct traffic routes receive a poorer, more
expensive service in a deregulated market – or no service at all. 2
IPART has observed that:
In a deregulated market, conditions in the rank and hail markets make it
difficult for passengers to select higher quality or cheaper taxis. This
situation allows poor quality or expensive taxis to remain in business.
Maintaining minimum standards and some control over fares benefits
passengers directly and benefits Sydney’s tourist industry and business
community indirectly. 3
As was noted in the Independent Competition and Regulatory Commission’s
(ICRC) review of the ACT Taxi and Hire Car Industry, many jurisdictions that
deregulated during the 1990s, have now moved to re-regulate all or part of the
operation of these services.
In its review of the Victorian Industry, the Victorian Government noted that:
Among the alternatives investigated by the Government was industry
deregulation. This option was discounted after examining other systems
around the world where wholesale deregulation already exists and
discovering that this approach, for the most part, failed. 4
All jurisdictions that de-regulated have re-introduced controls over access to
airports and service standards. Most jurisdictions have also maintained or reintroduced pricing frameworks.
While none of the overseas models examined have mandated maximum fares,
New Zealand has imposed conditions on the setting and advertising of fares,
which allow customers to make a choice about the service before they enter
the vehicle.
Deregulation of the taxi and hire car industry in the Northern Territory resulted
in significant compensation costs for the Government.
New South Wales’ own experience where compensation to hire car operators
was paid in the form of free taxi plates, created further distortions in the
market. The additional licenses issued have driven down the lease value,
materially affected the income of many owner/operators and ultimately lowered
2
For a more detailed discussion of the overseas experience, see the Final Report of the
Review of the future direction of the ACT taxi and hire car industry and price direction for taxi
services (June 2002), prepared by the Independent Competition and Regulatory Commission
(ICRC), pp19-24.
3
4
IPART Review of the Taxi and Hire Car Industries – Interim Report 1999.
Taxi and Hire Car Reform Package in Victoria – p3 The case against deregulation.
19
the potential current sale price of taxi plates. For many owner/operators, their
taxi plate is their superannuation.
Any attempts to fully deregulate the NSW industry is certain to result in strong
demands for significant compensation.
New South Wales and other jurisdictions have progressively removed many of
the barriers to entry into the industry, while ensuring basic standards of safety
and customer service and the fares to be charged are regulated.
This is essential to ensure equity of access for the travelling public. There are
no caps on the numbers of licences in the Sydney Metropolitan Transport
District, which are available for purchase from the market or the Ministry.
While taxis do not neatly fit the common understanding of a public transport
service, in that they are not publicly owned, operated or directly subsidised,
taxi services in particular play an essential part in the matrix of passenger
transport services available to the public.
They provide an adjunct service to primary public transport services,
supplementing trains and buses to provide “door to door” transport options for
those that require them.
They are a time and cost-effective option for travel between destinations not
commonly serviced by primary public transport and for those passengers that
require a more customised service than would be available using mass
transport options.
As public-use vehicles, they reduce the need for private use vehicles and
therefore have an important role to play in reducing the safety and
environmental risks associated with ever-increasing private car use.
Some regulation of the industry is essential to ensure the quality and
availability of taxis. The market is currently a poor regulator of service quality in
this respect.
Experience overseas and in other jurisdictions around Australia, especially in
Perth, has proven that the most effective method of regulation is in fact coregulation.
Participants self regulate in relation to most aspects of service delivery and are
therefore encouraged to compete to provide better service with greater
efficiency, while the Government establishes and monitors:
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Basic safety and vehicle requirements
Maximum taxi fares
publicly reported performance outcomes
Entry standards, such as training and licensing requirements
Industry participation conditions, which clearly specify the responsibilities of
all participants in the industry in relation to the provision of customer
service.
20
The last of these, the setting of standards for service, is an essential element
of a proper, workable framework, to ensure that customers are able to
consistently receive a high level of service. Satisfied customers are critical to
the maintenance of a viable industry. Ultimately, increasing consumer
confidence is the only way to sustain the industry.
The IPART Review of the Taxi and Hire Car Industries – Interim Report 1999
made a number of recommendations concerning the removal of entry
restrictions into the industry in New South Wales, which have been
implemented with limited success.
Changes to the Passenger Transport Act in 2000 and to the Taxi and Hire Car
Regulation in 2001 have paved the way for a co-regulatory model to exist in
New South Wales. However, this has not progressed.
Despite IPART’s recommendations, Network standards have not been
implemented and no reporting framework or resourcing exists to support their
implementation.
In the meantime, the existing regulatory provisions impose a distorted
emphasis on directly controlling driver behaviour and operator conditions,
which restrict any real self-regulation.
They indirectly support punitive contractual arrangements which may
contribute to costs and decrease the viability of independent operators and are
largely silent regarding the responsibilities of the taxi networks to improve
customer service.
While restrictions on livery and uniforms are actively pursued, real customer
service issues are largely ignored. Without customer service standards and a
proper system of monitoring and reporting, the current regulatory framework
cannot function effectively.
The majority of submissions received were frustrated at the lack of action on
implementing and enforcing performance standards – even those submissions
from networks and operators to whom the standards would most directly apply.
The amount of time spent by the Ministry on moving to review “interim”
Standards over a ten-year period leaves the Industry aghast.
Combined Communication Network
The Ministry of Transport imposed service standards on Taxi Networks.
A draft set of standards was released, by the Ministry during March
2002 with the intention of replacing the interim standards, which have
been in place for more than 12 years. The Taxi Council believes that
service standards only need to be defined where competitive forces do
not provide efficient market regards to service providers. Where they are
set, they should parallel service standards provided in other deregulated
markets…
NSW Taxi Council
21
The 1993 Interim Network Standards, which were never enforced in any
event, were to be replaced by Service Standards for Taxi Cab Networks
under the 2000 Amendments to the PTA. If they exist at all they
languish in draft form.
Taxi Action Group
The Tribunal recommends that current network performance standards
be regarded as benchmarks and that the Department of Transport
prepare a public report every six months comparing the performance of
each Sydney Taxi Company and co-operative against these
benchmarks.
The Tribunal favours a regulatory framework which requires taxi
companies and co-operatives to be directly responsible for driver and
vehicle standards, while DoT monitors and enforces service standards
maintained by the companies or co-operatives.
IPART (1999 Report)
IPART chairman Thomas Parry examined ways of improving service
and made recommendations to that end. He specifically mentioned
benchmark reporting standards for all taxi coops and companies to
produce a 6 monthly report detailing performance between networks.
Did this happen?
John Watkins (Driver)
Not until these Network and Operator Standards are in place will any
real progress be ensured. It must surely be the first task of this Inquiry to
have these standards determined.
Michael Jools (Driver)
The Ministry gave the NSW Ombudsman an undertaking in late 2002 to
introduce a set of uniform by-laws for networks by the first quarter of
2003, nothing has been done to date. The uniform network by-laws
should compliment Ministry service standards. There needs to be a
quantum shift in the role of networks. Networks would still be required
to comply with the Ministry of Transport service standards, and to
achieve those standards the networks should be competing for both the
operator’s business as well as the travelling public’s custom.
Sue Simmonds (Operator)
The Inquiry believes that the role of government, through the Ministry for
Transport and in partnership with the industry, is to set and monitor minimum
performance standards in the industry.
While the Government has a policy role to play in facilitating service quality
improvements in the industry, it should not be focussed on imposing conditions
on how the standards are met, as that is a business decision for industry
participants subject to the consistent achievement of the set minimum
standards.
22
The Industry through the various Networks should develop their own policies,
procedures and business strategies to suit their particular objectives.
The Government’s key role is to establish, with industry, a monitoring regime to
ensure that the minimum standards are met and to ensure that all industry
participants are working together.
The draft interim standards were first developed in 1993 and were subject to
several revisions but have not yet been formally implemented.
At the most basic level, not all responsibilities, targets and methods of
measurement are clearly defined and could therefore be open to subjective
interpretation and reporting – undermining the very concept of a performance
measure or benchmark.
For example, service safety levels are generally described, while measurement
and responsibilities are generally only implied as a network responsibility, and
not explicitly stated.
Moreover, the standards (like the regulation) are defined in punitive terms,
referring predominantly to what penalties will apply when the ill-defined
standards are breached, rather than referring to targets or goals to be
achieved.
For two key customer service indicators, phone booking time and passenger
waiting time, targets are set without differentiating between peak and off peak
demand, pre-booked and urgent jobs.
The measures to be used are not specifically stated and although the network
is nominated as having responsibility, no process map is specified, indicating a
reporting format or a performance benchmark against which achievement can
be compared.
Nor is the information to be collected presented or analysed in a useful context
– the number of drivers logged on to the system/in zone will impact on the
service times achievable, as will the mean of trip length for pick-ups.
The speed at which offloads can be passed through, especially at peak hour is
also relevant information that contributes to a picture of service delivery, rather
than the collection of amorphous statistics.
Documentation provided by the Ministry suggests that work on finalising the
standards has not proceeded because of the absence of data links to the major
networks being established.
However, the performance measures to support the standards have never
been properly defined. It is hard to see what difference having data links would
have made as there is no indication of what data should be collected or of what
analysis would take place once any data was provided to the Ministry.
23
Setting standards – Key Principles
Given the flaws in the current standards appear to be significant, the Inquiry
feels it may be timely to go back to basics and revise the approach, based on a
clearer understanding of what performance standards are for and what they
should try to achieve.

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
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

Customer Service Standards should be based on the needs and
expectations of customers.
Pursuing the standards should generate continuous improvement.
Standards should be measurable and achievable and based on accurate
information.
Standards should add to the knowledge base of and about the industry.
Rewards and sanctions can be applied based on adherence to the
standards.
Standards form the backbone of a robust regulatory framework and a
vibrant industry.
Indeed the Industry’s Peak Body and a number of Networks support these
principles with the NSW Taxi Council stating inter alia:
…Networks should be held accountable for performance but should be
given the freedom to compete with a framework of standards that avoids
ambiguity and loss of true accountability.
NSW Taxi Council
Regulated service standards are of the utmost importance. The best
ways to accomplish and exceed those standards is to leave the
networks to design and appraise the procedural structures that are
necessary to attain service excellence. Such a process leads the way
forward and provides the stimulus for real competition between the
networks.
Many Warringah Cabs
Often standards are developed such that applying them and/or reporting on
them becomes an onerous and autonomous task; activity for activity’s sake.
The focus is then on avoidance, because they are not adding value to business
processes or contributing to quality outcomes.
Arbitrary standards are difficult to monitor and the measurements involved
ultimately contribute nothing to any knowledge of industry trends or customer
service and are therefore unable to contribute to driving improvement or
change.
Reliable information, derived from relevant measures, regularly reported and
promptly analysed, is the primary means of identifying issues and problems in
service delivery.
The most useful standards are those that can be identified in terms of the
service level targets set for each standard.
24
The measurement of the service level achieved in a defined time period and
where there are clear accountabilities – who performs the task, who measures
the task, who reports the task and who evaluates the outcomes.
Standards developed using this framework will produce a clear set of
benchmarks that can be applied fairly across the industry and will easily show:




The performance of one network or service sector relative to others
Trends in the industry over time
Seasonal variations; and
Industry achievements and areas for service improvement.
Achievements can be acknowledged publicly, which will assist in developing
public trust and increasing customer demand. When standards are not met, the
Government can provide reasonable support and guidance and if necessary
act to penalise industry participants who do not comply. Government reporting
of improving performance will serve as a public endorsement of those
networks, operators and drivers who deliver a good service.
How does this compare with the current framework?
The current regulation sets out specific requirements with regard to
authorisation and accreditation to be a driver, operator or taxi network. It
covers livery, driver uniforms, meter specifications, and general provisions for
hiring and training. Beyond a general requirement to provide a copy of network
rules, it imposes no meaningful reporting framework.
The thrust of the regulation is to prescribe driver conduct, with little or no
provision for oversight of or by operators or networks, except in relation to
vehicle equipment standards.
No general service standards are set and there is no provision for monitoring
compliance with the specific standards that are set out, such as ETAs for
wheelchair bookings.
There is a strong public information imperative for this kind of reporting, as
published data will become a primary motivator for enhanced performance.
This was recognised in a number of the submissions received:
NCOSS supports public reporting for taxi performance against
established performance standards. Further, given the anecdotal
evidence available of the poor performance of WAT services, there is a
strong case for enhanced public reporting of the performance of WATs.
Council of Social Service of NSW
A reporting system to manage complaints does already exist, pointing the way
to how the industry and the Ministry can work collaboratively to improve work
processes and ensure accountability to the public in relation to key
performance indicators.
25
In 2002, the Industry entered into a voluntary agreement with the Ministry to
use a centralised complaints management system known as the CFMS –
Customer Feedback Management System.
Owned and built by the Ministry, the system has the capacity to generate
comprehensive reporting based on feedback from customers.
The system has greatly improved complaints management by all the networks,
who use the system to manage investigations and ensure timely customer
response.
Except where a matter is of a very serious nature, or involves repeat offences,
(where the regulator or the police need to be involved) the system allows
networks to take responsibility for investigations and response to customers
and to implement a range of disciplinary measures against drivers and
operators, as appropriate.
The Ministry is able to monitor complaint management at arm’s length,
intervene only when necessary and establish trends in service and interaction
on the basis of true and uniformly presented data.
However, this reporting capacity is not currently utilised entirely, nor are
adequate resources allocated by the Ministry to ensure follow-up of these
reports with networks and operators.
Specific complaints about driver behaviour are managed with compliance audit
processes.
The NSW Taxi Council submitted:
…Clearly the benefits of a centralised system where information is
shared between the Ministry and the Networks are not being realised.
Structural changes within the Ministry have to date meant that the
desired levels of management and ongoing development of the CFMS
have not been achieved. The full potential benefits of the system have
not yet been realised…
NSW Taxi Council
It would appear that there is very little except the quality of the standards
themselves to prevent immediate implementation of a service standards
approach.
Indeed, the legislative mechanism by which standards can be brought into
effect already exists.
The Passenger Transport Act allows for the implementation of network
standards, which may serve to address the balance between the specificity of
the regulation with regard to driver and operator entry and conduct and the
relative silence on the general conduct of networks.
26
Are there examples of the service standards approach in existence?
In August 2001, the Western Australian Government implemented service
standards for the taxi industry, based on an extensive yearlong developmental
process conducted by The Boshe Group/Colmar Brunton WA and based on
recommendations from the ACCC.
These service standards, which have been in operation in Perth for two years
now, have been widely circulated within the Taxi Industry Australia-wide, and
are generally held to be a workable framework for ensuring continuous
improvement in customer service.
Their operation is currently being evaluated, as part of the Western Australian
Government’s ongoing industry monitoring process.
In summary, the WA model follows the standard-setting principles outlined
above, and reports on all of the standards set out, using a three tier approach –
green, amber and red, to report levels of achievement against industry agreed
KPIs in each area.
The bulk of the data is obtained from network reports. Raywood, the primary
supplier of communication equipment within the taxi industry, advise that all
systems on the Australian market are capable of producing reports regarding
booking data, pick-up, off-load and failed pick-up rates.
Data concerning ranks, driver behaviour and customer contact, are measured
via annual survey and via regular monitoring of customer complaints. Networks
also provide customer complaint handling data.
Matters pertaining to Driver performance and Driver safety (including data on
costs of operation) are collected via regular reports of financial and other data
from operators and drivers.
These are measured by the government against a “balanced scorecard”, using
ABS private motoring index data as a benchmark.
This particular service standard is still under development as responsibility is
split across a number of industry participants and there is a strong incentive in
some quarters to hide or distort costs and shift risk.
Nonetheless, it demonstrates a possible model that may resolve one of the
ongoing dilemmas when IPART undertakes it annual fare determination,
namely the development of an accurate cost model which will enable a more
equitable apportioning of costs between drivers and operators.
In Queensland, options are under consideration to provide for the
implementation of similar service standards via a service contract between the
Government and Networks.
27
Whether the mechanism used is a contract or a regulation, the essential
elements are that:

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Standards are clearly defined
There is regular, public reporting on achievements
Poor performance is monitored and addressed
Industry and government are clear about their areas of responsibility and
work collaboratively to ensure customer needs are met and that the
industry is able to thrive.
Networks assume accountability/responsibility for achieving standards and
determine their business decisions to achieve standards without
Government intervention.
Options for Reform
A co-regulatory approach to the operation of the Taxi Industry in NSW be
confirmed.
Drafting of and consultation on performance standards take place, with a
view to gazettal and implementation of a service standard framework
within 6 months of the final report.
Further research be done on the applicability of the Western Australian
Service Standards model and the Queensland service contract model to
New South Wales, particularly metropolitan Sydney.
Appropriate resources be identified to ensure monitoring, robust
analysis and public reporting can take place.
Commensurate with the above, the regulation be reviewed to ensure that
it supports the intent and effect of the performance standards and
confirms a co-regulatory framework for industry participation and
operation.
The Minister consider asking IPART for assistance in identifying what
data requirements would be necessary to include in the performance
standards to ensure that it will be possible in the future to develop an
accurate and impartial industry cost and revenue model.
28
Entry and Participation in a
Co-Regulatory Framework
There are two other key aspects to the effective operation of a co-regulatory
framework that require further development – how to manage entry into the
industry and what terms and conditions (beyond the application of safety and
performance standards) should be based on participation.
Historically in NSW, in order to respond to specific needs at different times,
new licence types and conditions have been created and then sometimes
varied with no clear or continuous policy rationale.
Officially there are eleven types of licences and an almost infinite number of
condition variations imposed upon them. Simplifying the system would appear
to be a long-overdue measure, which can only improve the operation of the
industry.
The current regulatory framework allows for licences to be issued with as few
or as many conditions as the Director General of the Ministry of Transport sees
fit. The incentive to make these as simple and straight forward as possible
appears to have been missed in favour of imposing many conditions, some of
which are ostensibly intended to ensure that appropriate levels of customer
service are maintained.
However, enforcing these conditions has always been difficult. Moreover, at
various times during the last 10 years, requests to vary licence conditions such
as hours of operation have been granted on an ad hoc basis, with and
sometimes without a fee being charged. Policy direction in relation to licensing
does not appear to have been consistent.
In the past various types of restricted licences have been issued to address the
issue of supply during peak demand periods. “Peak availability” or licenses
with time limits on their operation is a concept used around the world to meet
demand without creating a glut of taxis in the market place during times when
limited services are required.
However, over time many of these licenses have had the restriction of their
operating hours removed, thus increasing the general pool of taxis but not
ensuring that the maximum number of available taxis is deployed during peak
times.
The seemingly arbitrary conversion of these licences has in some instances
created a windfall gain for the owners of the plates, often without any fee or
transfer tax being collected by the Government.
This ad hoc approach may have lead to some instances of poor process that
may require redress and should be avoided in future.
29
Nexus Plates
In examining the licensing regime in operation and assessing its impact in the
market, the inquiry was advised of the existence of a further subset of licenses,
issued between 1982 and 1990, and subsequently transferred or extended.
These licences were originally created as special temporary night licences to
operate within specifically designated areas as a transition measure following
the introduction of random breath testing.
Later they were made permanent restricted licences, issued to networks to
offset part of the costs of operating Wheelchair Accessible Taxis (WAT). The
idea was that the licences would be paired with a WAT plate as a means of
creating an incentive to build up the WAT fleet.
They were subsequently upgraded to fully unrestricted licences by the
networks, designated as “series 9000” licences or “nexus” licences.
However over time the concept of the nexus plate as linked to or paired with a
WAT has been lost. Although the Nexus and the WAT paired licence were not
transferable, the Ministry has apparently allowed individual transfers and
further it appears that licence conditions for some of the licences were
changed.
Although the licences were due to expire in 1993, it appears that at least 94 of
the licences are still in use by all of the networks and that the income from
these plates is no longer linked to supporting a WAT vehicle.
For example, although the nexus plates were supposed to provide a revenue
stream to support the operation of WATs the inquiry notes that there were a
number of submissions regarding the lack of available WATs in Newcastle.
This is despite Newcastle Taxi CoOp having 5 nexus plates in their fleet. The
paired WATs could not be identified as being in operation.
The records relating to decision-making on the nexus plates appears to be very
poor and there is no clear indication if the chain of approval to vary any licence
conditions or extend the term of licences or to allow them to be transferred.
It is clear that all these things have happened, and that the networks appear to
have received a collective asset windfall gain of around $29 million.
The Ministry estimates that the plates have collectively generated around $1
million per annum in revenue for the networks. No annual licence fees or
transfer taxes appear to have ever been paid for these licences.
There appears to be a need for an examination of the probity of the issue and
variations in the conditions pertaining to the nexus plates. The lack of accurate
records within the Ministry suggests that there may also be a need for a
complete audit of these licences by an independent body, with
recommendations to be made on:
30
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

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The probity of transfers and variations to the license conditions.
The continuation of the scheme.
Any compensation or back fees and taxes owing.
What conditions need to be imposed if the continued operation of the
licences is deemed appropriate.
Options
The issue of Nexus Plates be referred to an independent body for review
of the probity of the issue, variation and transfer of the licences since
1982
That recommendations be developed regarding the continuation of the
paired licence scheme and any operating conditions that should be
reviewed in relation to affected WAT and Nexus Licences.
A Model for the future – Streamlined Licensing Arrangements
Without any changes to the existing regulatory framework, it is possible to
implement a more streamlined system of licensing, based on standardised
conditions. Options to reduce the number of licence categories and to ensure
conditions are consistently applied within licence types should be explored.
Perhaps of equal importance is the development of business rules relating to
the issue and variation of any licence, to ensure that any changes that are
requested are evaluated against set criteria.
The Inquiry has discussed with the Ministry the need to have a moratorium on
any current licence and renewals while this development work takes place. It
understands that no licences will be issued or renewed, except on a temporary
basis, until a comprehensive licensing plan, along the lines outlined above has
been developed.
Such a plan will not take long to develop, so a brief moratorium should have no
impact on licence values, nor should it create any uncertainty in the industry.
Indeed, the development of streamlined licensing and effective business rules,
as indicated earlier, can do nothing but enhance industry performance.
Options
Options for a streamlined licensing system be developed using
standardised licensing conditions. A new system should be ready for
implementation by 31 December 2004.
In addition, business rules for evaluating any proposed variation to
conditions once a licence is issued should be developed and
implemented, to ensure that any changes to licences are only made if
they are in the public interest, and that any changes are consistent within
the licensing framework.
31
The Operation of Networks and Dispatch Systems.
Sydney is unusual in Australia and indeed in the world, in that a significantly
larger portion of taxi trips are generated by rank and hail business rather than
by prior bookings . Yet the regulatory framework is geared around compulsory
connection to a network which is also a booking service.
Because of the mandatory connection provision, drivers and operators are
obliged to pay high radio connection fees, for a service that many do not fully
utilise. It is a condition of authorisation/accreditation that drivers and operators
be connected and the networks have instituted contractual arrangements
based on this regulatory authority which insist that the condition of proof of
connection is the payment of a non-negotiable, all-in fee.
Mandatory connection to a network is one mechanism by which the
Government may ensure that basic safety requirements for vehicle operation
are met. It is the taxi networks that are responsible for providing that only
vehicles that meet the safety standards are deployed in the active fleet.
Maintaining this compulsion is essential to ensure the enforceability of
the safety provisions, and any other standards to be imposed.
The inquiry has received a large number of submissions and representations at
various meetings querying the imposition of the onerous fee for Network
connection. Many drivers and operators have indicated that radio dispatched
bookings represents a very small part of their business; there is a strong view
that they do not receive value for money for the service.
Increasingly, the network operated dispatch services are subject to competition
from private dispatch services, usually called trunk networks. These private
services are usually operated through semi formal associations of authorised
drivers and operate on an honour system to manage private bookings from
regular clients.
These clients are often corporate travellers who prefer to use the same
driver(s) and are prepared to pay for a personalised service that is usually of a
higher quality – an experienced driver with a strong customer service focus,
who operates a cleaner, higher standard vehicle.
These services have operated for more than 10 years with the complete
knowledge of both the industry and the Regulator. Demand for them continues
to grow – a demand that is driven entirely by customers, who do not feel that
they are receiving a reliable quality service from the existing network booking
services.
These services are illegal under the current regulation, because none of the
dispatch services are authorised networks and in the current framework only
an authorised network may operate a dispatch service. Despite this they
continue to flourish, not only because of customer demand but also because
the current regulatory provisions do not appear to be enforceable.
32
New provisions recently proposed, ostensibly to strengthen the prohibition
against the operation of the dispatch services again focus – as do the existing
provisions – on prohibiting the use of a particular communications method,
namely a trunk radio, rather than addressing the operation of the service itself.
As indicated in the Executive Summary, this approach to regulation begs the
question – why would the government want to prohibit the operation of a
service that appears to be thriving in response to customer demand and is
banning the machinery going to have any real effect?
The potential danger of the current operation of these services would appear to
be the fact that they operate outside of the regulatory framework and therefore
are not subject to safety and reporting standards, in the same way that the
major networks are.
This is not only a potential safety risk, but also creates a cost distortion in the
market place, as they are able to run what is a parallel business to the major
networks without having to bear any of the additional associated costs. The
Ministry has commented that:
It is the strong position of the Ministry that the main focus of addressing
trunk groups is in its ability as a regulator to effectively regulate the taxi
industry in terms of service reliability and safety.
Ministry of Transport
All states in Australia except Tasmania and the Northern Territory maintain
mandatory connection to a network, for the reasons outlined above; however,
there is a clearer delineation between the operation of a network and the
operation of a taxi dispatch service. This distinction does not really exist in the
New South Wales legislation.
In Western Australia, the regulation describes a booking service and
prescribes reporting and performance standards accordingly. Rather than a
focus on the communication method, the regulatory framework more
appropriately focuses on the function of a network.
If we were to consider such an approach in New South Wales, it would have
the advantage of ensuring that trunk and other networks would be obliged to
compete fairly whatever their communication method (radio, telephone or
computer) and be obliged to meet the same standards for safety and
accountability.
It would also create business opportunities for existing networks to negotiate
service/ administration packages for a suitable fee for driver groups who may
operate private booking services. It would allow the development of preferred
driver schemes in alliance with the major radio-based networks and facilitate
the development of broader offload systems and premium services.
These would ensure a larger pool of taxis and an emphasis on competition on
the basis of service quality, which can only improve customer service overall.
33
If we use the regulation as an enabling tool rather than an instrument of
prohibition, customer demand will have a better chance of determining
which services are available in the market.
The current definitions could be amended to define a taxi dispatch service as a
distinct function separate from the operation of a network, and impose
reporting requirements on dispatch services.
The opportunity would then exist to ensure that all existing private booking
services could be subject to reporting and performance standards.
Competition for booking/dispatch services would be allowed, provided specific
offload provisions were observed.
A suggested definition of a Taxi Dispatch Service might be:
A service which provides a booking and dispatch service by whatever means
And/or controls and coordinates administrative and other services to taxis for
the purposes of arranging a person who requests a taxi to be provided with
one.
Provision could then be made within the regulation along the following lines. All
taxi dispatch services:

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

must be registered with the Ministry;
must provide reporting against customer service and other performance
standards;
may operate in affiliation with a major network as part of a preferred driver
or premium service;
must negotiate suitable service fees for the delivery of administrative
services including regulatory requirements and radio connection (if
required); and
may not use or offload to vehicles other than authorised and accredited
taxis and taxi drivers.
Any driver or operator of a taxi or a dispatch service participating in an
unregistered service or offloading or using an unauthorised/ not accredited
vehicle would face suspension or cancellation of their licence and
accreditation.
An approach of this sort would address 4 identified needs:

It will ensure that customers will continue to be able to access a service
that they obviously want.

It will require for any dispatch service, irrespective of its
broadcast/communication mechanism to be subject to necessary
regulatory provision.
34

It will encourage competition on a more level playing field in relation to
dispatch services, including in relation to the radio fees charged to
operators who may prefer to restructure their network affiliation to
maintain compulsory services relating to safety and administration, but
not operate using the radio booking service.

It will create the opportunity for the networks themselves to develop
business alliances with drivers and operators and establish premium or
preferred driver services.
Maintaining compulsory network connection but fostering competition in
the area of dispatched services would appear to create options for the
industry to develop innovative approaches to service, and to drive
technological enhancement in relation to delivery mechanisms.
Options
Legislative provisions regarding the prohibition on private booking
services (usually referred to as trunk networks) be revised with the
primary objective of better defining the functions of a network and clearly
separating it from a taxi dispatch service; mandating the registration of
all dispatch services and imposing reporting and performance standards
on their operation.
While Mandatory connection to a network should remain, the legislative
framework should allow for competition in relation to dispatch services
and negotiation on the fees structure imposed by networks.
Any re-evaluation ensures that the regulation does not unreasonably
restrict the implementation of premium services and inter-network taxi
offloads.
In drafting any changes, full consultation with the industry should take
place.
A Premium Fee for a Premium Service?
One of the terms of reference set down for this Inquiry was to invite
submissions and consult with the public and the taxi industry about premium
taxi services, and in particular, the implementation of an additional booking fee
for premium taxi services.
One of the objections raised about private dispatch services in the propensity
for these services to operate outside the mandated fare structure. A number of
submissions commented that some premium taxis are charging higher than
regulated fees, ‘load’ the fare5 or do not engage the meter6.
5
6
Manly-Warringah Cabs submission
D Musgrave submission
35
While registering the dispatch services as discussed above will mean that
standard fares can be enforced, the question remains – should we?
Given that a premium service costs more to run, and if customers are willing to
pay more for a personalised service, why shouldn’t they be able to do so?
The majority of industry participants’ support the introduction of a two-tier fee
approach that recognises a higher booking fee for premium taxis based on
certain conditions.7 These conditions can generally be summarised as
including:

that the premium service is provided by way of reduced waiting times, call
backs and standard of vehicle/driver 8;

a regulated charge is conditional on a standard service time for the job plus
an experienced driver9;

the fee should only apply when the request is made through an authorised
taxi network that operates a distinct Premium service fleet 10; and

customers are aware of any extra hiring charge and fleet choices available
with full disclosure at the time the customer makes a booking with the
Network 11.
In support of an additional premium charge, the Taxi Council noted the
following benefits in its submission to this Inquiry:
The introduction of a regulated luxury surcharge would allow a fairer
allocation of work to all drivers, and help offset the extra costs of
providing a much more expensive vehicle. It will improve the quality of
service for the luxury passengers by increasing the likelihood that a
luxury taxi will accept their booking. More importantly in terms of
service goals, it will create an incentive for operators and drivers to
upgrade the fleet.
NSW Taxi Council
A further advantage of the two-tier fee structure could be increased earnings
for drivers through the application of the fee. This initiative could provide an
incentive for drivers to remain in the industry and provide an enticement to
those joining the industry.
A premium service may be an adjunct to the re-introduction of a seniority
register scheme discussed in a later chapter.
7
Note that the Council of Social Services NSW opposes a premium rate on the basis that it will
create a ‘dual class’ taxi industry, suggesting instead that resources be applied to improve the
quality of existing services
8 M Jools of the Taxi Action Group submission
9 ManlyWarringah Cabs submission
10 Premier Cabs submission
11 CCN submission
36
Career advancement for drivers within the industry via a “promotion” to a
premium service and the opportunity to build a client base as a preferred driver
may become an important incentive to drivers.
Both Victoria and Queensland currently apply a telephone booking fee for
premium services, where Queensland charges an unregulated amount of $11,
with a regulated booking fee of $11 applying in Victoria.
However, an additional fee does not apply to premium taxis that are hailed or
hired from a rank. Customers around Australia and around the world have
demonstrated that they are more than willing to pay more where a higher level
of service is guaranteed.
This Inquiry supports a review of the booking fees, including an examination of
options for a two-tier or variable booking fee.
Options
The Taxi Industry, be encouraged to introduce competitive premium
services, with offloads to be managed within the taxi industry.
The Networks demonstrate a capacity to operate these services while,
still providing adequate support for the operation of general services.
None of these services should operate at the expense of providing
general taxi services and performance standards for both services will be
collected and monitored separately. Networks may be subject to penalty
if it appears that general services have declined.
A variable booking fee be established, to allow for premium services to
charge a higher fee for a better quality, more personalised service.
A maximum booking fee for premium services be determined as part of
the next round of IPART fare determinations (noting that this was a
previous recommendation from IPART, not acted upon by the Ministry).
37
The State of the Industry – Thriving,
Surviving or Going Under?
Taxi drivers – an endangered species?
The taxi industry in New South Wales and particularly in Sydney struggles with
poor public image. Recent national and state surveys indicate an impression of
poor service standards, with taxis seen as dirty, drivers as rude, ignorant and
lacking in English skills and overall service as unreliable.12
Adding to this public perception of lacklustre performance (perhaps
contributing to it?) is widespread discontent amongst drivers, many of whom
are now leaving the industry, creating even more pressure on service through
an increasing driver shortage.
All of the submissions received from drivers spoke passionately about the need
for reforms to ensure:



Greater reward for effort
Guaranteed entitlements
A realistic and achievable career path.
The Ministry of Transport figures indicates that there are approximately 22,500
authorised taxi drivers in New South Wales.
17,752 taxi drivers are located in Sydney, 589 in Newcastle, 521 in
Wollongong and 3,641 in other locations. 13
Taxi drivers are a diverse group of people. They are from many ethnic,
religious and social backgrounds, for many English is their second language.
Many have overseas qualifications not recognised in Australia and taxi driving
is seen as a ‘bridging’ occupation.
Although some are long term career drivers who own their own taxi licence,
many drivers are unskilled and taxi driving is a ‘job of last resort’. There are
also a large number of casual drivers who drive taxis to supplement other
incomes.
This belies the obvious levels of personal commitment to providing good
customer service and advancing the taxi industry that was clearly in evidence
throughout all the contact the inquiry team had with drivers.
Many drivers leave the industry within the first year of obtaining their authority
to drive taxis. Anecdotal evidence suggests lack of earnings is one of the major
factors, caused by inexperience.
12
CFMS reports on customer complaints indicate that these are the most common complaint
types (excluding fare disputes)
13 figures supplied by Ministry of Transport
38
While the taxi industry has always experienced pressure on driver numbers in
periods of high employment, participation rates in the industry appear to be
experiencing significant decline at present, due in no small part to the
increasing sense of disenfranchisement that drivers reportedly feel.
At least in part, it seems that this sense of disenfranchisement is enforced by
legislation. The compulsion to be connected to a radio network, even though
only 20% of taxi work in Sydney is derived from bookings dispatched from
network call centres, means that drivers feel they are vulnerable to exploitation
by the networks.
This compulsory radio connection network was introduced in 1990 as a
condition of authorisation/accreditation. The 2001 Regulation confirmed this
compulsion for both operators and drivers and specified that the networks
could impose conditions via a contract.
First among these conditions was the imposition of a network connection fee.
Also of note are provisions in every network contract mandating the use of
Cabcharge facilities and specifying insurance coverage. The networks claim a
service fee for use of Cabcharge and receive an agent’s fee for the provision of
insurance.
By default, the regulation has become the means by which networks are
allowed to impose large fees and earn extra revenue, without contestability
outside of the existing Network structure, in relation to their contracts with no
sharing/distribution of this extra revenue to drivers.
On the other hand, the compulsory connection to a network imposes essential
responsibilities on the networks regarding safety, vehicle standards, and
provision of lost property and customer feedback management.
It is fair to say however, that over time the division of responsibility has become
unbalanced and both cost and risk have been shifted towards the driver and
away from networks, investors, owners and operators.
The costs associated with the operation of a taxi in New South Wales and the
radio fees charged by the Networks are the subject of discussion in another
section of the Interim Report.
There are two main areas of financial transaction between industry participants
– the pay-ins and the network connection contracts. All of the financial
arrangements within the industry beyond the original purchase or lease of a
plate, vehicle equipment etc cascade from these.
New South Wales is different to other states in its reliance on bailment
contracts made under Part 6 of the Industrial Relations Act for drivers and
operators in the metropolitan area.
Sydney is the only city in Australia that continues to have bailment
arrangements in preference to profit sharing or commission arrangements.
39
Profit sharing is the preferred practice in the non-metropolitan areas and
regional New South Wales.
The Taxi Industry (Contract Drivers) Contract Determination Award governs a
metropolitan taxi driver’s method of income. The Office of Industrial Relations
administers this award. No determination exists outside the Metropolitan
Transport District (Sydney).
The bailment contract negotiated under the award gives a driver the choice of
two agreements known as Method 1 and Method 2.
Method 1 gives the driver 45% of all takings (fares) during the first year and
50% of takings thereafter, plus the associated sick pay, holiday pay and long
service leave entitlements based on the chargeable fares during the period of
engagement.
Method 2 the driver pays the operator a set pay-in ranging from $125.18 to
$190.66 depending on time and day of the week. The driver is also entitled to
holiday pay, long service leave and sick leave, amongst other things,
depending on the frequency and duration of the period of engagement.
Few if any, Sydney drivers work on Method 1. Operators are loath to employ
drivers on this method and many drivers are nervous regarding Method 1 as
(perhaps erroneously) they see this system as subject to higher taxation.
Although drivers should receive certain entitlements, in reality very few drivers
receive their legal entitlements. Only a handful of taxi operators have been
successfully prosecuted for non-compliance with the award.
During consultation with the Inquiry, the Transport Workers Union has stated
very few operators comply and pay drivers the required entitlements.
Although the Regulations state that a taxi operator must have in place an
insurance policy that fully indemnifies all drivers, in practice many operators
insist that drivers pay the $500 excess fee when involved in a collision.
It appears that few drivers are fully aware of their rights and many are
intimidated into foregoing their entitlements.
Despite the TWU being the only recognised taxi driver representative in
industrial matters, membership is very low (estimated to be less than 200
members or 1% of all taxi drivers).
This may be because of the transient workforce and the relatively short period
of time many drivers stay in the industry.
In the past, the transport regulator has sought to be granted interested party
status in the context of negotiating bailment agreements however this has not
proven possible. There are serious concerns about whether it is appropriate for
the regulator to become involved in employment and contractual matters.
40
It may not be appropriate for the regulator to be directly involved in these
negotiations or in monitoring adherence to the agreements once negotiated, as
these are employment matters outside the purview of taxi regulation.
There does appear to be a need to establish some general principles
concerning the determination of the quantum of the pay-in rates and payment
of driver entitlements (which are included in these rates) that are linked to
authorisation/accreditation. One option may be to consider setting maximum
pay-in rates as part of the fare determination.
The need to encourage a better quality of driver to join the industry is
frequently touted by networks and by the regulator in New South Wales,
however, very little is done to encourage, reward or even keep the professional
drivers already at work.
There is some evidence to suggest that the brunt of cost and risk in the
industry is increasingly borne by the driver. They also bear the brunt of
customer behaviour and attitudes. While the current driver shortage appears to
be shifting the balance somewhat for a very few, being a taxi drivers is
becoming a less and less attractive occupation.
When determining fare increases, IPART takes into account driver entitlements
as costs borne by the operator. However, very few drivers receive entitlements.
This directly affects the set amounts a driver must pay in to the taxi operator.
Anecdotal evidence suggests some operators deliberately restrict shifts or
employ casual drivers to avoid paying entitlements. This is a recognised
practice by the industry and is mentioned in the NSW Taxi Council submission
to the Inquiry.14
It has been suggested that in some situations where more than one taxi
operator is located in the same taxi base, drivers are rotated in different taxis
(technically operated by different operators) to avoid the need to pay
entitlements. Drivers are often unaware they may be driving for more than the
one operator and therefore will never be able to quantify their leave
entitlements.
In this regard, many of the submissions to the Inquiry indicate drivers are not
receiving their entitlements. Consideration should be given to the most
appropriate way to address this issue.
IPART also uses the ‘notional wage’ for taxi drivers of $64,496 per annum.
This equates to approximately $1200 per week or $240 per day (5-day week)
or $20 per hour (12-hour day). 15
These amounts seem to be at odds with the contract determination which
allows $606.27 per week holiday pay and $121.68 per day sick leave.
14
Submission received from the New South Wales Taxi Council Ltd.
IPART Review of Fares for Taxis in NSW in 2004 report to the NSW Minister for Transport
Services.
15
41
It is extremely difficult to determine the average earnings of a taxi driver. The
Inquiry has been quoted earnings of less than $5 per hour by some drivers.
However, examining the submissions received and from conversations with a
variety of drivers, earnings of $10.00 per hour are considered a fair estimated
average hourly income. Drivers with some years of experience can usually
earn more, and conversely some new drivers will earn less.
Perhaps it is time for the industry to consider whether the current financial
arrangements are the best way of ensuring the ongoing participation of
qualified drivers. All of the network submissions and that of the NSW Taxi
Council were clear about the increasing cost pressures on the industry.
Despite this, there is little acknowledgment that whatever fare adjustments are
made because of the fixed price pay-in arrangements, it is the driver’s income
that declines in greater proportion than that of operators or networks.
Without the perceived and actual opportunity to maximise their earnings, few
drivers will want to stay in the industry. Few will be able to afford to.
GST & BAS
Taxi drivers are required to have a personal Australian Business Number
(ABN) and to be registered for GST.
Taxi Drivers are the only small businesses required to register for GST
regardless of their income. The onerous requirements of GST
compliance and reporting acts as a strong disincentive for drivers to
enter or stay in the industry. The Taxi Council believes the GST is
directly responsible for a reduction in the number of part-time drivers
willing to work a few shifts per week.16
The basis of this ATO ruling should be questioned.
Creating a Culture of Continuous Improvement
Many of the submissions received referred to the need to provide drivers with
the opportunity to create a career path. This would include different options for
entry training, including the possibility for apprenticeships and probationary
learning, with part-time study.
Both networks and drivers have recognised a need for refresher training and
also for opportunities to enhance customer service skills. Even options such as
payment to attend tourist information sessions and improve the general and
local knowledge of the drivers servicing tourist customers were suggested as a
means of encouraging drivers to continue to improve their service delivery.
Currently there is no requirement for drivers to undertake any refresher training
once they have been authorised. A number of other jurisdictions are moving
16
Submission from the New South Wales Taxi Council.
42
towards a system of compulsory retraining, to ensure their awareness of the
regulatory framework and their operating environment remains current, as well
as to provide an opportunity to update their customer service skills.
The quality of current entry training
Training issues were raised in a number of submissions, which pointed out that
the current training as delivered by private providers produced a poor quality
outcome, often at prohibitive expense.
The cost of the required training to obtain a taxi driver authority is
approximately $1200. This is made up of:



training school fees of around $1000;
government application fee of $100; and
fees for Adult Migrant Education Service (AMES) English language test,
medical examination and photographs.
Although some students can complete the required training in about 3-4
weeks, generally the average trainee takes about 5-6 weeks to complete the
training course. In addition, once authorised, the new taxi driver must return to
complete further training after 9 months on-road experience at a cost of $250
before the authority is renewed.
It appears that the training of taxi drivers could be very much simplified and
thus the costs could be reduced significantly. Basically a taxi driver, in addition
to possessing the appropriate driver skills and authorisation status, has to have
these major areas of knowledge:
1.
2.
3.
4.
5.
Geographical knowledge;
Knowledge of relevant regulations;
Knowledge of radio equipment and procedures;
Customer Service; and
OH&S.
The first two requirements could be made available for self-paced learning to
enable an intending driver to learn at home at his/her leisure or convenience.
Consideration should be given to who has responsibility for the third
requirement. Should the employer/business owner have the responsibility for
training persons in the use their equipment?
Other avenues for training (such as TAFE or any other accredited trainer)
should be examined. These alternative trainers could tailor courses that meet
national standards with specific training provided by the networks.
The need for taxi networks or taxi operators to bear the cost of some, if not all,
of the training costs should be explored.
43
The current requirement for compulsory additional training after 9 months
experience (at a cost of $250) should be carefully considered.
DECA, a training provider in Melbourne offers Government funded taxi driver
courses for $115 per person. One submission states:
…the curriculum in place and exorbitant charges that these taxi schools
have in place is purely in the best interests of generating revenue for
taxi schools and not in the best interest of the drivers or pupils. 17
Consideration needs to be given to the costs involved in the development,
licensing and delivery of training and whether the current training framework is
really delivery a quality, cost-effective outcome.
While a late submission from the Taxi Council to this Inquiry has raised issues
about the quality of alternative training including the current VETAB approved
training modules, their proposals for change centre around entrenching their
exclusive control over the curriculum and extending their role further into
assessment. It is not clear that their proposal will lead to reduced costs for
drivers and improved outcomes on course delivery and their proposal will
require further careful consideration.
There would seem to be a need for open debate about whether the industry
should set its own training requirements and control delivery and assessment
mechanisms and whether the government should play any role in compelling
training using one particular course or another.
For instance, is it appropriate that the NSW Taxi Council owns the copyright to
the training syllabus and as a consequence of their course being prescribed,
receives a fee estimated at between $100 & $200 per pupil?
Is there room for competition on the syllabus or on course delivery and what
mechanisms for review and course evaluation exist, to ensure that training will
adequately reflect the performance standards to be introduced?
A number of submissions have mentioned that some ‘on the job’ training using
‘jockey’ drivers would be beneficial to new drivers. One submission states:
Every taxi driver trainee should sit next to an experienced driver for at
least five shifts and have experienced drivers sit next to him/her for five
shifts. Not only would the trainee learn the basics, but they may learn
how to make money too. 18
If such an approach was considered a valuable tool to assist in driver training
and retention, the Taxi Council could consider contributing to the costs
involved from the monies received from its Training Copyright revenues,
perhaps through establishing a cadet driver program.
17
18
submission received from Mr Flavio Fuentes
submission received from Mr Ross Nelson
44
It should be emphasised that training in safety equipment and emergency
procedures should be continued and enhanced, with regular ‘refresher’ training
made compulsory (preferably with no charge to driver). At intervals to be
determined, it should be mandatory for drivers to demonstrate familiarisation
with safety procedures.
As mentioned above, the NSW Taxi Council owns the curriculum for driver
training and distributed under licence to private training schools, which operate
as licensed training providers. Driver testing is undertaken by the Ministry of
Transport to ensure independence of testing results.
Despite fierce competition between the schools in the Sydney area, the cost of
training currently serves as a barrier to entry into the industry. This alleged
competition is not however reflected in the training course fee structure with
the two (2) largest schools in Sydney charging identical fees. Anecdotal
evidence suggests there may be some serious management issues concerning
the operation of the schools and the fees charged – and ultimately with the
results produced.
One constant criticism of the industry is the poor level of English demonstrated
by drivers. However, an English test is compulsory under the Passenger
Transport Act.
Currently, every candidate for a taxi driver’s authority must sit an English test
administered by AMES.
In some instances the provision for compulsory testing appears redundant in
that even drivers, who can demonstrate competency in English, including
schooling in an English-speaking country, must submit to examination.
It seems therefore that we test many people who don’t need testing, and yet
fail to provide an adequate outcome with regard to a consistent level of
competency.
Even if an applicant was born and educated in Australia and holds professional
qualifications, they are still required to take and pay $80 for the compulsory
test.
Drivers must pay for the test and face a waiting period of up to three months if
they fail it and must resit the test. In its submission on training the Taxi Council
makes some valid observations about the timing and conduct of the English
Testing not currently contributing to a positive outcome – that is, providing an
accurate measure of a potential driver’s ability to communicate effectively with
a passenger, navigate and follow directions.
Despite these flaws, it seems that the Ministry may be further entrenching this
regime without measurable benefit to the customer being a guaranteed
outcome.
One submission from a person who is a qualified trainer and holds
qualifications in linguistics informed the Inquiry:
45
“I believe that at a recent meeting (between the Ministry & NSW AMES)
it was decided, without consultation with other players, to require any
applicant who had previously passed the ‘TAXI DRIVER
COMMUNICATION ASSESSMENT’ more than 3 years ago to resit the
English Test”.19
No evidence has come to light that indicates that resitting the test achieves any
service improvement objective; moreover, it does not appear that the Ministry
currently acts with regard to drivers who do not pass the resit. AMES earns a
fee for these additional tests.
As with other issues, it appears that the regulation is being used to enshrine
indirect monopoly arrangements, which do not necessarily produce a quality
outcome for the customer, the driver or for the industry as a whole.
Option
In consultation with all relevant parties, the Task Force develops options
for developing an industry vocation, based on improved training and
testing arrangements.
Options for ensuring that drivers are able to access their entitlements are
considered, including penalties for operators who attempt to withhold
entitlements.
Recognition of performance and seniority
Previously a seniority scheme existed in the industry, where the Ministry would
grant a taxi plate to drivers who could demonstrate 15 years active
participation as a driver. After 10 years, drivers could nominate to be on a
waiting list for plate issue. The scheme was readily abused and withdrawn.
However, the principle of a reward for active and meritorious participation is a
worthy one. Based on proof of active and continuous participation over more
than 10 years and demonstrated performance of a high order, drivers might be
offered a license (possibly unrestricted, restricted or WAT) with the opportunity
to access an interest-free loan to purchase a vehicle in the case of a WATs
licence.
Option
Options for the establishment of a seniority scheme be developed.
19
Letter from Mr A Nicholas B.Ad.Ed Managing Director the Sydney Taxi School Pty Ltd.
46
Driver safety
By its very nature, driving a taxi can be a dangerous occupation. Robbery and
assaults are not unusual. Drivers who work the night shift are particularly
vulnerable to untoward behaviour by passengers. Drivers can be directed to
isolated or quiet areas placing them in dangerous situations.
Drivers are also subject to abuse from intoxicated passengers and most drivers
at some time experience incidents of fare evasion.
In recent years, mandatory requirements have greatly assisted driver safety,
including GPS tracking, security cameras or safety screens, emergency boot
releases etc.
However, in relation to security cameras, few drivers know the correct
procedures in regard to downloading images in the event of an assault or other
incident. Nor are these procedures widely known or followed by other relevant
personnel.
A submission received from a taxi driver 20 relates how after being assaulted
by a passenger; he reported the incident to the Police who then apprehended
and interviewed the persons responsible.
However, he was informed that it was necessary to view the security camera
images before consideration would be given to charging anyone.
The taxi driver was subsequently quoted a cost of between $220 and $440 (at
$110 per hour) to have the images downloaded by the camera company agent.
The driver was expected to bear this cost personally and could not afford the
quoted fee. He elected not to proceed with the matter.
It would appear that charges made for downloads at weekends are much
dearer than the charges made on weekdays (approximately ($80 to $100).
An education program is required regarding security camera image downloads.
The costs associated with the image downloads appear to be unreasonable.
Should there be any charge at all to the driver if a genuine emergency or
threatening situation has occurred?
In some situations, taxi drivers may deliberately jeopardise their own safety.
Such is the case with seat belts. Taxi drivers in NSW are exempt from wearing
seat belts. Many take the option of not wearing seatbelts!
The justification for the exemption has been the argument that drivers could be
restrained from behind during an assault if they are wearing a seatbelt.
20
Submission from Philip Stanfield
47
A number of submissions argue that a driver is more liable to be injured as a
direct result of not wearing a seatbelt during an accident than being injured
during an assault while wearing a seatbelt.
In his submission against the seat belt exemption, a taxi driver of many years
experience states:
Taxi drivers should wear seat belts. Airbags are meant to be used in
combination with seat belts. There is not good reason for drivers not to
wear seatbelts. 21
Dr Michael Henderson,22 an expert consultant in traffic injuries, submitted a
detailed paper with a compelling argument for removing the seatbelt
exemption. He outlines how drivers not wearing seatbelts endanger not only
themselves, but also their passengers and other road users.
Some taxi drivers endanger not only themselves but also other road users and
members of the public by driving extremely long hours.
Drivers work an average of 12 hours per shift, usually between 3.00am and
3.00pm and 3.00pm to 3.00am. Many drivers work five shifts per week and it
is not uncommon for some drivers to take the taxi out for the whole weekend,
subsequently maximising their earnings by exceeding the 12-hour shifts.
Of particular concern is the workplace fatigue experienced as a direct result of
the number of hours worked by taxi drivers. Research shows a person awake
for 16 hours has an attention span equivalent to a person with a Blood Alcohol
Content of .05.23
There are no regulations in place to limit the number of hours a taxi driver may
work.
Taxi networks and taxi operators have the ability to monitor the number of
hours worked by taxi drivers. However, there is little evidence to suggest this
happens. Taxi Networks and the Ministry of Transport are aware that many
drivers do not log onto the network radio dispatch system and therefore cannot
be adequately monitored.
Section 8 (1)(c) of the NSW Occupational Health & Safety Act 2000 requires
an employer to take all reasonable precautions to safeguard against workplace
injury. By not monitoring driving hours and the known associated fatigue, as
well as encouraging unsafe work practices, networks and operators may be
leaving themselves open to action by WorkCover.
The previous Department of Transport administered a Taxi Driver Safety
Committee with representation from:
21
Submission from Mr Ross Nelson
Dr Henderson has spent over 30 years in the area of road safety. He has extensive
experience in the areas of motor accident injury and trauma.
23 Dr Ann Williamson, NSW Injury Risk Management Research Centre, UNSW.
22
48






Department of Transport;
NSW Taxi Council;
NSW WorkCover;
Roads and Traffic Authority;
NSW Police Service; and
Taxi driver representation.
This committee was disbanded and no longer exists. Consideration should
now be given to the reintroduction of a similar forum to address the numerous
safety issues associated with driving a taxi.
Option
All taxi drivers be compelled to wear seatbelts.
A Taxi Driver Safety Committee be re-established.
Fatigue management provisions be investigated, with a view to
introducing mandatory provisions into the Regulation as soon as
possible.
49
Financial Structure of the Taxi Industry
in New South Wales
Taxi Networks in the Sydney, Wollongong and Newcastle areas were
traditionally established as cooperatives, with seven networks still operating
under that management structure. The two largest Networks in Sydney and
the Network in Gosford have now been transitioned to company structures.
While the financial objectives of the company structure Networks are profit
oriented due to the expectations of shareholders, the cooperatives reportedly
strive for only relatively minor profitability and in some cases a “break even”
outcome.
The major sources of income for the Networks are from radio fees charged to
Operators, taxi licence plate lease fees, commissions received from
CabCharge for the administration of fares through the CabCharge fare
payment system, CabCharge share dividends, insurance commissions and
other miscellaneous income.
Services provided by the Networks to their members include taxi radio and
communications services, various administration and support services
including lost property and complaints handling, the management of taxi plates
and licences, agencies for taxi insurances, processors of payments via the
CabCharge fare facilities and other related activities.
The networks were generally co-operative in providing financial information to
the Inquiry Team and this assistance is acknowledged. But it should be noted
that audited financial statements for 2003/04 were not as yet available for all
Networks and in the case of one Network the Team’s request for specific
financial information was denied.
The radio fees collected by the smaller Networks do not generally meet the
costs incurred in providing the radio and communications services, with the
other revenue sources enabling some Networks to keep their radio fees to a
minimum. Radio fees charged by the Networks range from $382 (plus GST) to
$865 per month (plus GST).
In respect of the smaller cooperative based Networks, the Inquiry team has
concerns regarding the disparity in the amount of fees paid for what appear to
be similar services.
However, based on the limited financial information provided it was not
possible to determine the reasons for the disparity and whether members are
receiving value for money. Further work in this area could provide a sound
basis for benchmarking the costs and revenues of the Networks, thereby
providing useful and relevant information for operators.
50
In contrast to the co-operatives, the two largest networks charge almost
identical radio fees and provide similar services to members despite a large
difference in the number of members they service.
It was noted that both these networks claimed that they were not making profits
from radio fees, but did advise that they earned significant additional revenue
from other services provided.
The Inquiry Team is however concerned that potential economies are not
being realised and that in a period of decreasing telecommunications costs this
does not appear to be the case in the taxi industry.
Whilst some Networks do not operate their own radio rooms, the smaller
Networks that do indicated that they have made a business decision to provide
a high level of personalised customer service in full knowledge that they will
not achieve the economies of scale that might be available.
Whilst acknowledging such a decision, the Inquiry Team has noted that in
comparing the Sydney Taxi Market which has four radio rooms as against
Brisbane which has two radio rooms, there appears at least a prima facie
argument that some rationalisation should occur.
However, the Inquiry Team believes that any decision in this regard is a
business decision for individual Networks to determine.
Despite the modest profit motive of the cooperatives, preliminary indications
are that the taxi Networks were in most cases able to achieve profitable results
in 2003/04. One Network however has recorded losses in each of the last four
years, with little prospect of reversing that trend in 2004/05.
It should also be noted that the absence of non-radio fee revenues, such as
CabCharge commissions, would see some of the profitable Networks also
recording operating losses. Some networks have been actively pursuing
government and corporate clients in an attempt to boost their revenue.
Another source of revenue is income from Nexus Plates, with a total number of
some 94 Plates distributed across Networks. It is understood that whilst these
Plates were initially issued by the Government at no charge a number of the
Plates have subsequently been sold between the Networks.
As a result, the plates have in most cases been assigned a value and
recognised on the Networks’ Balance Sheets. The valuation of the Nexus
Plates has however been dealt with differently by the Networks, which raises
some concern.
In view of the inconsistency in the approaches to the original issue, sale and
valuation of a number of the Nexus Plates, it is considered that it would be
appropriate to be further review the Nexus Plates generally and thereby better
understand the reasons behind the different valuation methodologies.
The high cost of taxi insurances in NSW was also a major concern of the
Networks. Whilst Networks could accept that taxis are a higher risk than most
51
other vehicles, they are frustrated because relevant data and documentation
has not been provided by the insurance industry. It is therefore difficult for the
taxi industry to implement internal strategies to address this issue.
A number of the Networks have disclosed solid asset bases, with land and
buildings being a major asset in many cases. Notwithstanding this, the ability
of some of the Networks to meet their current cash commitments is considered
to be poor and in one case in recent years, very poor.
As identified above, the review of the financial arrangements, performance and
structure of the taxi industry has uncovered a number of issues. It is
considered that it would be most beneficial to further review and analyse the
financial structure of the industry.
To facilitate this review process, it is suggested that the Inquiry Team request
assistance from IPART to undertake a comprehensive review to determine the
most appropriate financial and structural outcomes for the taxi industry into the
future.
Such a review should focus not only on the cost components of the Taxi Fare
Model, but should also analyse the revenue component. In addition, a detailed
analysis of specific costs incurred in providing radio/dispatch services should
be undertaken concurrently.
The Inquiry is also aware the ACCC is currently reviewing the authorisation
granted to the taxi industry in relation to provision by the Networks of radio
booking services to taxi operators on the condition they accept the CabCharge
Accounting System and display the decals of that account system.
The Inquiry understands the exemption may no longer be warranted and
considers that the outcome of the review will impact on further work
undertaken by the Inquiry. We will be interested in the outcome of the ACCC
review in that regard.
During the course of the Inquiry a number of the Networks expressed concerns
about the level of regulation in the Industry and were critical of the Ministry of
Transport, and its predecessors, perceived lack of planning and inaction
regarding ongoing issues (i.e. Fringe Plates) which have a financial impact on
the Networks.
Options
IPART be formally requested to join with the proposed Industry Reform
Taskforce to undertake a comprehensive review of the cost and revenue
components of the Taxi Fare Model including a specific analysis of
current radio/dispatch service costs.
52
The financial implications involved in the issue, sale, transfer and
valuation of Nexus Plates be further reviewed.
An analysis be undertaken of current insurance costs in liaison with the
taxi and insurance industries with the objective of reducing premiums, if
possible.
53
No Destinations Trial –
The right solution to the problem?
It is easy in retrospect to find that even the most well-intentioned initiatives may
not produce desired outcomes. However, in the case of the “no destinations”
trial, it is hard to conclude that it has been anything other than a policy and
practical failure.
Based on misinterpreted and inconclusive data, senior management and the
Minister were mislead into believing that a trial of revised booking broadcast
arrangements would lead to improved customer service standards.
Based on unsubstantiated presumptions about driver attitudes, behaviours and
data, senior management in the Ministry and the Minister were lead to believe
a measured and successful trial was already underway on the Central Coast
and that this confirmed that such a trial in Sydney would improve fleet
utilisation, improve responsiveness by drivers and lead to more equitable
coverage of service across the Sydney basin.
The Minister may not have been advised that such a trial had previously been
undertaken and was not successful. Moreover, it does not appear from
documentary evidence provided by the Ministry that the Minister was told that
IPART had recommended against the implementation of “no destinations” as a
mandated provision for network booking.
Although some other jurisdictions, notably Brisbane, do not provide drivers with
destinations when they are operating within their nominated work areas or
zones, the system operates entirely at network discretion and is not imposed
by the regulator.
The fundamental assumption underpinning the trial is that supplying
destinations to drivers is a disincentive to drivers considering accepting radio
jobs. As one driver pointed out in his submission:
The policy of hiding all destinations only serves to make all radio job
offers equally unattractive but does not serve to make any jobs more
attractive than alternatives such as waiting at a rank or cruising a likely
area for a hail24.
This is recognised in the Regulation itself. In order to encourage drivers to
continue to take radio bookings during peak hour and at changeover, the
Regulation provides that destinations must be provided to the driver. This
provision has not been suspended during the operation of the trial.
24
Submission from Ernie Mollenhauer,p.2
54
In its 1999 Report on the Taxi and Hire Car Industry, IPART concluded:
That the purpose of not broadcasting destinations would be to ensure
that minimum service standards were met…. The Tribunal is of the view
that the best way of ensuring that minimum service standards are met is
to monitor and enforce these standards, while allowing individual
networks to determine how best they can be met. For this reason the
Tribunal does not recommend that networks be prohibited from
broadcasting destinations to drivers.
The Tribunal also noted that previous trials of no destinations “have met with
limited success”.
IPART indicated that the primary concerns with “no destinations” could be
summarised as:



A ban on broadcasting destinations would cause drivers to refuse bookings
near changeover times
Drivers would not be able to plan their route on the way to a job
Drivers would concentrate on rank and hail work and avoid phone
bookings, especially in areas where there are problems with regard to
driver safety and fare evasion.
These conclusions were not reflected in statements made by Ministry staff that
the trial would address “cherry-picking” by drivers and force them to take on
more and a greater variety of jobs, as well as improve fleet utilisation.
No reliable data has been produced to support these presumptions and in the
context of this Inquiry, more than 90% of the submissions reviewed and
interviews undertaken have commented that “no destinations” creates a strong
disincentive for drivers to undertake more telephone bookings.
That success of the trial was dependent upon driver satisfaction with the
concept and implementation of “no destinations” arrangements was recognised
by the largest network operating in Sydney. CCN observed in its submission
that:
It is important for the Inquiry to recognise however that whilst the
Passenger Transport Act and its Regulations ensure that the Authorised
Taxi Networks are focused on customer service because their continued
operations depend on it these Networks have no control over drivers
who bear the impact of such trials. It makes no difference to an
Authorised Network whether they must provide the destination when
they dispatch a booking. It does however impact on drivers’ attitudes in
general and as is true in any Industry better service will be provided if
the providers of that service are satisfied. CCN of course supports the
trial however the outcome can only properly be evaluated by
determining driver satisfaction, which will reflect in the end in service
level improvement if the system is right. Recent demonstrations by a
55
small group of drivers in protest of the trial appears to be an indicator
that there is a level of driver dissatisfaction evident.
There has been no measure included in the trial to confirm driver participation
and satisfaction rates (although demonstrations by a small group of drivers in
protest of the trial is not in itself conclusive of overall driver satisfaction).
The evidentiary basis for the need for the trial and the promotion of it as a
working solution to improving driver responsiveness would appear to have
been flawed.
In a letter to the Ministry in February 2004, the NSW Taxi Council advised inter
alia:
There are concerns amongst the majority of Sydney Metropolitan Taxi
Networks (SMTN) that it is possible that the introduction of the No
Destinations Trial may:







Reduce customer service, especially in outlying areas of low density
population;
Limit opportunities to introduce innovative customer services
Restrict opportunities for SMTN and drivers to provide the most efficient
service, ie multiple hire; drivers ability to plan/research route prior to pick
up;
Undermine the basic fabric of financial viability by limiting the ability of
the Taxi Industry to compete effectively with deregulated competitor
transport providers;
Create a decrease in taxi vehicles available for hire through the
exacerbation of the current critical taxi driver shortage
Place additional barriers to a taxi drivers’ risk management process; and
Reduce a network’s ability to exercise discretional “duty of care” to the
taxi driver.
There is no evidence that any clear outcomes for the trial were ever identified
prior to its commencement. While a variety of reasons have been offered post
hoc as explanations for why it was necessary, these explanations themselves
have not been articulated in terms of what would constitute a solution or a
success.
Impact on the delivery of taxi services for the disabled.
If the trial itself was being proffered as a solution, it is a cure that may be
harming the patient. The impact of the trial on the delivery of Wheelchair
Accessible services does not appear to have been taken into account.
Although WAT bookings were formally exempted from the trial, the Taxi
Council’s submission noted that the trial:
56
is likely to have an adverse impact on drivers of wheelchair accessible
vehicles and there are signs that it is having an adverse impact on the
services provided to wheelchair users…The no destinations trial makes
it virtually impossible for drivers to accept work off the radio without
running the risk that the job will take them to a destination that prevents
them being able to honour an existing booking. There are emerging
signs that drivers are ceasing to drive WATS as a result.25
Implementation of the Trial
The Trial was initiated after only cursory discussion with the industry. The
Minister announced that there would be a trial on 23 November 2003, yet the
first formally recorded discussion of the trial with industry took place at a Taxi
Advisory Committee [TAC] meeting some weeks later.
Minutes of the TAC meeting of 16 December 2003 indicate that the prospect of
a trial was put forward and that the Taxi Council representative indicated that
there were other issues, including the operation of trunk networks that were a
bigger priority in terms of resolving customer service issues. He also stated
that there would be a major strike by drivers if the Government were to
proceed.
No resolution was recorded, although in later documentation, this discussion
has been presented as endorsement of the proposal by the industry although
no networks were formally present at the meeting. Both the Taxi Council and
the TWU (as a member of TAC) have publicly indicated that the trial is solely
the initiative of the Ministry (and, in the case of the TWU, was formally
opposed).
At the point at which the trial formally commenced (21 April) no benchmarks
had been agreed, no survey or evaluation methodology had been established
and the communication with the public was limited to the Ministerial press
release to announce that the trial was underway.
It does not appear that consideration was given to the potential cost of the trial,
either for the Ministry or for the industry. The Taxi Council has indicated that
there were significant costs incurred by the industry in establishing the trial,
including software development to ensure compliance with data reporting
requirements imposed and revised by the Ministry.
They also foreshadow adjustment costs for the future, as
“some drivers are likely to leave the industry due to changes
imposed.”26
Has the trial resulted in an appreciable increase in service delivery to
customers?
25
26
Taxi Council Submission, p31
Taxi Council Submission p.30
57
Submissions received indicate that since the trial commenced:
 Waiting times have not experienced any significant improvement and in
some instances, appear to have increased;
 Fleet utilisation has decreased, with a considerable jump in empty runs,
particularly to the Airport;
 Drivers are abandoning jobs booked through the networks, choosing to
work off ranks rather than log in at all;
 The amount of “dead time” has increased and Fleet utilisation decreased,
as drivers will not risk taking calls off the radio in case they interfere with
pre-booked commitments or personal trips (such as collecting the children
from school, attending medicals or business appointments); and
 The critical shortage of taxi drivers has further deteriorated with a number
of networks advising of decreasing fleet utilisation.
Legion Cabs noted that since the introduction of the Trial their statistics:
…demonstrate that there has been no significant change in “pick-up
times” or “no-jobs” covered.27
Manly Cabs commented that the Trial:
…has caused a collapse to efficient fleet dispersal and impinged upon
the ability of drivers to safely service the maximum number of customers
in the shortest possible time.28
The following is a sample of other feedback received:
There has been ample scope for all networks to have tried or initiated
“no destinations” prior to NDT. “No destinations” calling has been tried in
the past and failed. It is respectfully suggested that it would be
instructive to inquire why no network did take that action.
Manly Warringah Cabs
Surely you must be aware that such a system was tried by the Liberals
back in the 90s and it was a complete and total failure, creating more
problems than it attempted to solve.
Andrew Demas (Driver)
The No Destination trial is proving impractical in some areas and is
posing significant difficulties for WATS drivers.
NSW Taxi Council
Rather than having ‘No Destination’, the allocation of jobs to taxicabs via
GPS would be a better mode of job allocation, importing more efficiency
into the job allocation process”…”The introduction of a ‘global offload’ of
jobs to any network provided that it is the nearest car to the pick-up
point is advocated strongly in this submission.
Flavio Fuentes (Driver)
27
28
Legion Cabs Submission p.10
Manly Cabs Submission p.10
58
No Destinations is a populist and simplistic approach that does not
address the real problems of the taxi industry which are no consultation
and the cooption of the industry to vested interests.
Sydney Metropolitan Taxi Association
The No Destination policy has had the opposite of the desired effect by
seeing an increased number of taxis abandoned with no-one prepared
to drive them under the prevailing conditions”…”The most significant
side effect of this policy (no destinations) is the reduction in driver
earnings leading to an exodus out of the industry of those drivers
capable of winning alternative employment. The last thing the general
public wants is a reduction in the availability of taxis or competence of
drivers.
Ernie Mollenhauer (Driver)
I have lost 2 full time drivers and 2 casuals in the last month. Put
‘destos’ back, it didn’t work 10 years ago and is still no good.
True Blue Taxis
In the frenzy to remove ‘destinations’ there has been no account taken
of the dynamics of taxi-cab driving. Experience has shown that many
drivers prefer to work close to home. These are the drivers who are
happy to do small fares, rank work, groceries, women with young
children and the elderly. It seems the whole argument about
‘destinations’ is nothing more than bureaucratic stupidity.
S. Simmonds (Operator)
Trial implementation issues
Previous trials, including the ongoing trial on Central Coast had not indicated
any demonstrable improvement in customer service outcomes. It is not clear
that the Minister or senior management were ever fully advised of the
inconclusive results of the Central Coast Trial until after this Inquiry had
commenced.
All the industry submissions and other documentary evidence provided by the
Ministry demonstrate that there was limited consultation with Networks,
Operators or Drivers before the approval of the trial.
There was inadequate consideration of any options for trial parameters or of
whether mandating what is in essence an internal business rule for the
networks was an appropriate action for the Ministry to become involved in, let
alone initiate.
No other jurisdiction regulates “no destinations”. This is a business decision for
individual networks.
It is, in reality, a part time trial, that does not operate at the key service problem
times. The Trial does not operate at shift changeover. This may to defeat the
59
purpose, if the purpose was to improve pick-up rates and manage availability
of taxis, especially at times of high demand and potentially limited service
supply.
The prescription of the changeover times when the trial does not operate may
undermine previous measures to provide improved customer service as
suggested in the following submission:
For years different Ministers have told us to stagger the changeover
times away from 3 o’clock, which I did. Now that has to finish because of
“no destos” these early changeovers are impossible.
Michael Martin (Driver)
There is anecdotal evidence to suggest that there has been an increase in the
number of drivers using ranks and not logging on to the radio networks. The
trial is not measuring this and is therefore unable to reach any valid
conclusions about the behaviour modification effect of the trial on driver’s work
preferences.
There is no system in place to manage “M3”s (no shows) and reporting on
whether there has been an increase in these since the trial started, is not
consistent. Drivers can travel up to 13 km to pick up, refusing hails, only to find
the fare is not there, either because there was a double booking on the radio
system or the passenger has left.
The ATO counts these kilometres as earnings and even though the driver has
earned no income, he or she has accrued a loss. Even if the passenger is
waiting, if the fare is only a short distance, the driver may not earn enough to
offset the costs involved in the dead running.
Moreover, some radio networks place the driver at the bottom of the queue for
another booking, irrespective of whether the fare was picked up or whether it
was a short booking after dead running for a long distance.
This is a serious drawback to a “no destinations” system.
Unless jobs can be allocated using a GPS tracking system, to ensure that the
nearest driver receives the booking and where there are protocols agreed
whereby the driver returns to the top of the queue in the event of an “M3”.
In its response to questions from the Inquiry, the Ministry stated:
“The need for a uniform approach to the management of radio bookings was
considered to be essential if any trial across the whole metropolitan area, and
therefore all taxi networks, was to be successful.”
It is not clear that the networks fully complied with this provision, as to do so
would have meant relinquishing their differing dispatch methodologies and
making adjustments to the various technologies deployed. In the event that the
dispatch systems were not absolutely the same, the trial may have been
further compromised.
60
With the exception of Premier, all other networks and the Taxi Council have
expressed concerns about the implementation and the conduct of the trial.
Beyond the existing reliance on rudimentary reports from the CFMS, there
does not appear to be a framework for monitoring customer feedback. The
public is probably unaware of the existence of the trial. Moreover, this is clearly
reflected in the latest reports from the Ministry’s CFMS database, which
indicate that almost no feedback has been received since 16 May.
Data requirements for the trial have changed several times since the
implementation of the trial. The current requirements appear to primarily
measure call centre efficiency and only obliquely address customer service
improvements through reporting on time waiting. The data being collected may
not capture the true size of the active fleet on any given day and therefore
does not provide a meaningful indicator of service efficiencies or fleet
utilisation.
However, the waiting time data is not being compared to any active customer
feedback, so it is difficult to form any conclusion about whether customers
themselves feel they are receiving a better service because of the trial.
Although over the course of the trial so far no common data requirements and
measures have been developed, the trial has not sought to standardise or
evaluate the different job allocation systems used by the four networks, each of
which uses a different method. The method of job allocation impacts on the
driver’s incentive to accept or reject a radio job.
Three of the four systems automatically allocate the job in the first instance to
the taxi with the longest waiting time in the queue with only one allocating on
the basis of two variables (longest queued and nearest taxi).
These preference allocations potentially exacerbate the dead running that may
be associated with ‘no destinations’ bookings (and in theory increase
passenger waiting times). Three of the four systems penalise a driver who
rejects a booking by placing them at the bottom of the queue.
The effect of differences in the job allocation systems on driver behaviour and
their interaction with the ‘no destinations’ edict is not being measured in the
trial.
Perhaps most alarmingly of all, at the outset of the Trial, the Ministry changed
two significant variables – the booking fee was increased at the same time as
the “no destinations” rule was applied. It is statistically impossible to measure
the effect of either changes, in terms of measuring the incentive or disincentive
impact.
Subsequent to the introduction of the Trial a moratorium on the regulatory
provision on trunks was announced. It is not clear what the impact of this
change on the trial will be or how the Ministry intends to enforce these almost
unenforceable provisions. They will almost certainly be subject to legal
challenge.
61
In addition, it is possible that the end of the moratorium will cause a further
decline in the number of drivers logging onto the radio network, should ‘no
destinations’ remain.
Interstate comparisons
As mentioned previously, there may be some argument as to whether Brisbane
really is an example of “no destinations” at work. However there are two
reasons why it may not be a valid comparison or justification for the trial here.
First, implementation of a ‘no destinations’ regime is not regulated. It was a
business decision made by the networks, in consultation with their fleet of
operators and drivers, with the aim of encouraging greater take up of phone
bookings rather than a reliance on rank and hail in the suburban areas.
Because of the zone log in system for drivers, ‘no destinations’ applies within
the driver’s login preference area.
Second, in Brisbane drivers and operators work on a 50-50 split of takings.
Both drivers and operators share the risk and appreciate the benefits of each
and every shift, so ‘no destinations’ becomes less of a potential risk to the
driver’s livelihood.
In contrast, because of the bailment arrangements which dominate the Sydney
market, the driver makes a fixed pay-in. Operators have little incentive to
support ‘no destinations’ as a concept as their share of the takings is not likely
to increase, but the driver faces increased financial risk.
In short, the structure of the Sydney industry does not support the operation of
the ‘no destinations’ model.
If any network felt that the application of the rule would offer them a
competitive advantage in the marketplace, there is nothing in the existing
regulation to prevent them from putting it in place.
In Melbourne, ‘no destinations’ is again an issue of network preference not
regulatory compulsion. In the Melbourne market there is a very high
dependence on phone bookings as rank and hail work is not common in the
CBD, because of the traffic congestion and movement of trams.
In its 2003 taxi fare determination, IPART noted that in the last seven years in
Sydney, radio bookings as a proportion of total taxi hiring’s have reduced from
36% to 29%.
In the most recent MOT Taxi customer user survey this figure had reduced
further to 20%. In its 2004 Fare Determination, IPART noted that the ratio of
radio to total trips looks no higher than one in five for urban taxis.29
29
IPART 2004 Fare Determination p.9
Passenger trips are discussed in footnote 3.
62
The Ministry has not provided enough data or arguments to justify the
implementation and conduct of the Trial and it is difficult to conclude than that a
‘no destinations’ policy is appropriate, at least in the Sydney metropolitan area.
Option
The ‘No destinations’ trials in Sydney and on the Central Coast should be
terminated.
In its place, immediate steps should be taken to introduce customer service
standards relating to bookings, including the development of protocols for
universal offloads.
A consultative process should be established, encompassing the active
participation of driver representatives, to agree on minimum performance
measures and indicators.
The standards should be phased in over 3 months, with monthly reporting
against escalating targets and monitored for a further 3 months, before being
subject to a review, which would include a customer survey.
There are a number of models (as discussed in Chapter one) for the collection
of data to measure achievement against agreed KPI’s. These should be
evaluated urgently, and assessed to applicability to the NSW taxi industry,
taking into account the incentive effects and cost apportionment that occurs
under a bailment system.
In addition, the Ministry should comprehensively modernise its policy
making with regard to the taxi industry and look at options for significant
improvement in the quality the advice it provides the Executive, the
Director General and the Minister.
A consultation process should be established to discuss service
innovations to be developed by the industry.
63
Where to from Here?
It should be noted that the Inquiry has had only three months to identify and
develop solutions to problems facing the industry, some of which have been
progressively crippling its operation for more than a decade.
In this interim report we have not offered final solutions – it would be arrogant
to do so. We believe there is a way ahead and this report serves as an
indication of areas for further development.
The Inquiry has undertaken a comprehensive consultative program with the
industry stakeholders and the general community. This approach has produced
a wealth of material. The Inquiry has identified the following key areas for
reform based on four major approaches:




Build a new relationship between Government and the industry, based on
co-regulation and a strong voice for direct participation and consultation;
Develop options for improved customer service, especially for dispatched
services, based on transparent, publicly reported standards with clear and
consistent performance measures;
Establish an industry vocation for drivers, that encourages the development
of a culture of continuous improvement; and
Implement plan for change and for growth that focuses on the progressive
elimination of restrictive and anti-competitive practice and confirms policy
making in the public interest.
Build a new relationship
The relationship between the Ministry and the industry has been suffering for
decades as a result of poor regulatory approaches by governments of all
persuasions. Poor regulation generates poor behaviour of the part of both the
industry and the Ministry. Mistrust and lack of openness on both sides is the
result.
In relation to the conduct of the “no destinations” trial, the Ministry provided
answers to specific questions asked of it in June on 9 August. The material
provided by the Ministry focuses primarily on the past history of the taxi policy
and compliance function and the lack of stability and resourcing it experienced
under previous administrative arrangements.
This lack of stability has been the subject of previous commentary by the New
South Wales Ombudsman. The 1998 report made a number of observations. A
lack of confidence in the Department is due to:


The constant change in senior officers and staff in recent years,
The apparent lack of continuity, commitment and follow through on issues
agreed for consideration and/or action between the associations, operators
and officers of the Department in the past…”
64
The Ombudsman further noted…
“The majority of industry participants do not have confidence in DOT as a fair
and impartial administrator.”
These factors have contributed to a historical lack of confidence that is still in
evidence in submissions received by this Inquiry, some six (6) years later.
The continuing lack of confidence in the Ministry is clearly evident in the
following extracts, from a number of Inquiry submissions.
Combined Communications Network mentions in its submission:
“CCN welcomes the Ministerial Inquiry because the Industry has been
concerned about the lack of communication and consultation with the
Ministry.”
The submission goes on to say:
“Throughout the 80’s the DoT in consultation with Industry
representatives developed a comprehensive policy for the future
direction of the taxi industry.” …”Unfortunately lack of communication
between the Ministry and the Industry has resulted in a breakdown
culminating in this Inquiry.”
Premier Cabs is critical of the Ministry in its submission to the Inquiry. Quoted
from the submission:
“Policy decisions and changes by MoT in recent years have lacked
foresight into the ramifications that flow from the decision. Some
decisions have been reactive and implemented without thought of the
long term result and whether there will be applicability if there are
changes in the marketplace.”
The NSW Taxi Council states in a letter to the Inquiry dated 8 July 2004
regarding statistics used by the Ministry:
“We believe that the lack of rigour and reliance on real facts and data in
decision making processes within the Ministry of Transport poses a
significant issue for the taxi industry and would request that you include
a consideration of this problem during the inquiry process.”
Legion Cabs, in its submission to the Inquiry, notes the lack of consultation
with the taxi industry and goes on to say:
“We trust that out of this inquiry, there is a commitment by the regulators
to consult, work with, and understand the industry to achieve positive
outcomes for all.”
65
The current inquiry has determined that it is now imperative that better
communication be pursued as a matter of urgency.
A Way Forward – working collaboratively on real solutions
It is time for a change of focus and a commitment to developing policy
expertise and effective communication in relation to the taxi industry, with the
same degree of rigour and professionalism that has been recently
demonstrated in relation to bus reform.
In order to ensure that the integrity and pace of reform necessary to achieve
real change is created, there is a need for an independent Task Force to be
established, to guide both the Ministry and the industry over the next two
years.
The role of the Task Force will be to confirm a co-regulatory framework, based
on reporting of performance across the whole of the industry, establish
collaborative interaction between all sectors of the industry and play a
facilitative role in industry development.
Submissions to the Inquiry included a range of alternative options to improve
customer service and improve booking efficiency.
Many of these options are worthy of consideration in the context of developing
and implementing customer service standards for networks; however, their
implementation should and will be a business decision for individual networks,
provided that performance standards are met.
There are many voices to be heard
The single most common issue raised by drivers (including owner/drivers)
during the course of this inquiry is the lack of representation and participation
of drivers in policy and regulatory decision making.
Despite the presence of a Transport Workers Union representative on the Taxi
Advisory Committee (TAC), drivers (only around 1% of whom are union
members) do not feel that they have a voice that is heard by Government or by
the networks.
Predominantly membership of the primary consultative body, the NSW Taxi
Council, is made up of operators and networks. Although the TWU and the
Labour Council notionally represent driver interests, this does not reflect the
make up of the driver community within the industry.
A number of informal owner/operator and driver organisations have been
established in recent years and their interests should receive equal attention.
Currently within the rules of the TAC, observers are invited to attend and yet
currently drivers groups are not invited or even advised of meetings.
66
Mechanisms for allowing more frequent and broader driver representation at
TAC meetings should be considered.
Communication back to the driver community is equally important and the
production of a simple newsletter, in the style of that produced by the New
York Taxi Commission would ensure greater bipartisan information exchange
could regularly occur. The newsletter could report on the outcomes of TAC to
the taxi community, and serve as an advisory of upcoming meetings.
A recent review of the operation of TAC made a number of recommendations
concerning the governance of the Committee and the need to properly account
for expenditure funded by the operator levy.
The review confirmed that TAC is well placed to provide advice to the Director
General concerning projects and ongoing initiatives that might draw funding
from the levy revenues, provided guidelines for submitting, evaluating and
monitoring projects were implemented.
During the life of the Industry Reform Task Force, it is suggested that TAC
serve as the principal industry advisory body, reporting to the Chair of the Task
Force. Revenues currently collected from the Operator Levy could be used to
fund projects and activities identified by the Task Force. Current funding for
Ministry functions should be reviewed.
Options for improved customer service
Currently, the Regulator sets and maintains the standards. The industry runs
its businesses.
The Inquiry has identified an urgent need to introduce minimum performance
standards and reporting measures that confirm the customer service expected
of all industry participants – networks, operators and drivers.
Ultimately, the systems each network chooses to adopt are a business
decision for the network. The Government’s role is, in partnership with the
industry, to establish minimum service standards and provide support to all
players in the industry to ensure they can be delivered.
Developing key performance indicators and reporting methodologies is a
matter of urgency and is the first priority for activity after this report.
In making business decisions about the most effective means to deliver the
expected standards, all industry participants have a right to expect a level
playing field within their service delivery sector and that government policy will
be developed and administered in a non-partisan way.
For example, in the case of trunk radio networks, a more logical approach to
regulating their operation might have been to acknowledge that they exist
(because they do and are a growth area of business due solely to customer
demand) and to insist that they be recognised and required to provide an
appropriate level of accountability, commensurate with the service they deliver.
67
In Western Australia, the regulation describes a booking service and
prescribes reporting and performance standards accordingly. Rather than a
focus on the communication method, the regulatory framework more
appropriately focuses on the function of a network.
If we were to consider such an approach in New South Wales, it would have
the advantage of ensuring that trunk and other networks would be obliged to
compete fairly whatever their communication method (radio, telephone or
computer) and be obliged to meet the same standards for safety and
accountability.
It would also create business opportunities for existing networks to negotiate
service/administration packages for a suitable fee for driver groups who may
operate private booking services. It would allow the development of preferred
driver schemes in alliance with the major radio-based networks and facilitate
the development of broader offload systems and premium services.
These would ensure a larger pool of taxis and an emphasis on competition on
the basis of service quality, which can only improve customer service overall.
If we use the regulation as an enabling tool rather than an instrument of
prohibition, customer demand rather than vested interest will have a better
chance of determining which services are available in the market.
The services that customers created
Private booking services already exist. They do so because customers want
them. The industry recognises that these are a growth sector within the
business, and wants to expand in this direction.
In fact, the very networks that now complain so bitterly about the existence of
trunk networks, were in part responsible for their creation, as at least one
network installed the trunk radios in taxis in the first place. The belated cries for
enforcement now come at a time when drivers and operators who have worked
hard to deliver a higher level of service are potentially eating into the potential
profits of the major networks.
While concerns about a level playing field have some legitimacy, given that
compulsory network fees currently remain, it does seem somewhat
disingenuous for the networks to seek to use the Regulator to eliminate
potential competitors.
Perhaps it is time to consider changing the regulation in response to consumer
demand and rather than take an ostrich like approach, think about what we are
really trying to achieve by regulating these services in the first place.
In the earlier discussion on trunk or private networks, we identified that the
problem with this activity from a regulatory point of view is the distortion in
business costs created by allowing these operators to escape reporting and
safety management responsibilities. Options for addressing these concerns
while encouraging service competition have been discussed in Chapter Two.
68
It is also the case that the regulatory framework can no longer be seen as the
enforcement tool of the few, who wish to use the government as an indirect
means of guaranteeing them commercial advantage or monopoly
arrangements, at the expense of others.
The further point to be made here is that without improvements and service
expansion along these lines, competition from hire car groups and tourist
vehicle operators will cause serious harm to the taxi industry, which may lead
to a service decline and reduced availability in taxi services overall.
For as long as we restrict the operation of premium services we effectively
reduce the ability of the taxi industry to compete in lucrative niche markets.
Contrary to the long-held (and mythical) view that encouraging premium
services will drive the price of basic services up, the experience in other
markets indicates the existence of competitive premium services encourages
service improvement overall, and also provides an income stream that assists
in keeping dispatch services viable.
Fundamentally, if customers are prepared to pay more for a service they want,
is it not better for business to encourage opportunities to develop this income
stream, rather than have them take their business out of the sector altogether?
In this Interim Report one approach has been suggested. We are sure that this
will be one of many areas of further debate and comment in the future.
Options
An Industry Reform Task Force be established to operate independently
of the existing operational policy area of the Ministry.
The Task Force will be mandated to build appropriate relationships with
all industry participants and drive regulatory, policy and procedural
reform in the taxi industry, with the aim of instituting a regulatory and
administrative framework which supports improved customer service.
The Task Force operate for two years.
Levels of driver participation and representation in policy-making forums
including the peak body, the Taxi Advisory Committee be enhanced.
During the life of the Industry Reform Task Force, TAC serves as the
principal industry advisory body, reporting to the Chair of the Task
Force.
That revenues currently collected from the Operator Levy be used to fund
projects and activities identified by the Task Force.
69
Other issues
Throughout the course of the Inquiry a number of practical issues impacting on
the operation of the taxi industry in general and specific terms were raised.
These are dealt with individually below.
Wheelchair Accessible Taxis (WATs)
Many submissions have argued that the Ministry of Transport and the Taxi
Industry has not done enough to lift the provision and standard of WAT
services to make them comparable with services offered by regular taxis.
While the Ministry of Transport has attempted to introduce a number of
measures to encourage the take-up of WAT licenses, their progress has been
disappointing. For their part, the Taxi Industry has argued that the costs
associated with operators taking up WAT licenses (vehicle, equipment, etc) are
prohibitive, a barrier to entry, and it therefore affects their ability to improve
overall service standards.
In looking at the issue of WAT services, the Inquiry notes that the Minister for
Transport Services has formed a Taskforce to specifically investigate the
provision of WATs in NSW. While this Inquiry does not wish to pre-empt this
process and its recommendations, it does believe that WAT services are of
such a concern to the community that the issues need to be discussed.
As of July 2004, there were approximately 6100 taxi licenses on issue in NSW.
Of this number, 458 or 7.5% of taxi licenses were wheelchair accessible30.
The actual number of WAT licenses on issue needs to be clarified as there are
currently only 435 WATs in physical operation across NSW, as 23 of the WAT
licenses on issue have not yet been placed on vehicles by the Taxi Networks
due to taxi availability.
In addition to these licenses, there are reportedly a number of WAT ‘nexus
plates’ that were issued in the 1980’s in an attempt to encourage taxi operators
to improve WAT services. The issue of ‘nexus plates’ will be discussed in
another section. However, it is understood that these additional licenses have
not been utilised by operators for their intended purpose.
At present, the 435 WATs in NSW are located in the following areas 31:





30
31
Sydney Metro – 285
Newcastle – 4
Wollongong – 8
Gosford / Wyong LGA – 20
Country NSW - 118
Information provided by the Ministry of Transport – July 2004 figures.
Information provided by the Ministry of Transport – July 2004 figures.
70
In terms of the cost of a WAT licence, the Ministry of Transport currently issues
WAT licences in metropolitan areas32 on a short-term basis for $1,000 per
annum. In comparison a perpetual regular taxi licence in a metropolitan area is
presently valued at approximately $238,50033.
In Country NSW, WAT licences are offered free of charge.
In the Sydney metropolitan areas, WATs are accessed via the “Zero 200”
booking service. In Sydney, this service is owned and operated by the
Combined Communications Network.
In Newcastle, Wollongong and country NSW, WATs can be booked through
local taxi companies.
There is no regulated time for how quickly WAT bookings are to be taken-up.
However, section 53 (5) of the Passenger Transport (Taxi-cab Services)
Regulation 2001 states that:
The authorised taxi-cab network provider must ensure that every person
who books a wheelchair accessible taxi-cab through the network is
advised, within a reasonable time, of the time at which it is estimated
that the taxi-cab will arrive at the nominated collection point.
To further ensure that WAT bookings are taken by drivers, section 56 (1) of the
Passenger Transport (Taxi-cab Services) Regulation 2001 states that the:
The driver of a wheelchair accessible taxi-cab that is available for hire
must accept a hiring offered by a person using a wheelchair in
preference to a hiring offered by a person not using a wheelchair.
In terms of the training to become an accredited WAT driver in NSW,
prospective drivers are required to undertake a two-day course, which costs
$242. The training primarily entails the appropriate care that must be met when
transporting persons with physical disabilities.
In the document Accessible Transport Plan for NSW Agencies, the NSW
Government has recently finalised its Action Plan for implementing the
Commonwealth Disability Standards and has outlined the key reforms
agencies will need to implement to comply with the Standards. In terms of
WATs, they focus on:





32
33
increasing the number of WATs;
considering strategies to reduce the cost of owning/operating a WAT;
developing improved measurement of WAT performance standards;
training more drivers to operate WATs; and
developing initiatives to promote the use of WATs.
Sydney, Wollongong, Newcastle & Central Coast
Information provided by the Ministry of Transport – July 2004 figures.
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Community issues with the performance of WATs
A variety of issues in relation to WAT service standards were drawn to the
attention of the Inquiry.
In summary, however, the universal theme presented by the community was
their basic dissatisfaction with the differences in service standards between a
WAT and a regular taxi service. Many individuals and organisations were also
dismayed with what they viewed to be a lack of understanding of the needs of
wheelchair bound and physically disabled people.
The key concerns raised by the community were:




The general lack of provision of WATs by taxi networks;
The issues in booking and high waiting times for WAT services;
The lack of training of WAT drivers; and
The impact of the no-destination trial on existing WAT services.
Interestingly, the overwhelming majority of submissions the Inquiry received
came from individuals and organisations in the Newcastle/Hunter region
regarding WAT services in their area.
The views expressed by this group are indicative of the above issues identified
as facing all users of WATs in NSW. Specifically:
On the issue of a lack of WAT service provision, Grant Nickel, Hunter Regional
Officer, of the Spinal Cords Injuries Australia stated:
There are only 5 WATs servicing a region in excess of a quarter of a
million people that stretches over a large geographical area.
Michael Earp, Chair of the Newcastle Alliance commented that:
The Newcastle City Council has health services and shopping and
recreational activities which would be accessible to disabled people;
however, they are not able to access the city by taxi.
On the issue of booking and waiting times in the Newcastle/Hunter region, Richard
Cusick stated:
Wheelchair users are expected to make bookings weeks in advance to
have the best chance of securing a cab.
Maryanne Ireland, Community Support Officer, Paraquad Newcastle supported
this view by stating:
Generally to book a WAT for a specific time requires 1 week notice for a
weekday booking, 2 weeks notice for a weekend booking, and as much
as 3 weeks notice for booking on significant days, e.g. Mother’s Day,
Christmas Day.
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In relation to appropriate training for WAT drivers, Valerie Shevels, Carers
Action Network states that:
Services complain that either drivers are not being trained appropriately
in dealing with passengers with a disability or drivers are ignoring their
training. Sometimes accidents have occurred as a result of
inappropriate assistance with straps or with ramps.
As to the no-destination trial, People with Disabilities noted that it:
Recognises the significant use of unauthorised networks by drivers, and
passengers. It is estimated that over 60% of WAT use is outside of the
official networks’…’There is currently some confusion amongst WAT
drivers. Some PWD members report experiences where WAT drivers
are also not being given destinations. This can inconvenience
passengers’.
In addition to the above, there was a general view expressed to the Inquiry
that, given we have an increasingly ageing population, there is going to be a
greater need for WAT services in the future. Consequently, there is a need for
decision-makers to act now to implement the necessary changes required to
promote the take-up of WATs in NSW.
Taxi industry concerns with WAT services
A number of the submissions did discuss the problems the taxi industry faces
in providing an acceptable level of WAT services. Principally, the key issues
raised were:



The prohibitive costs of entry to become a WAT operator and driver;
WAT bookings are not lucrative due to the time incurred by drivers in
carrying out each booking; and
Disabled people are quite often difficult to deal with and made for
unpleasant working conditions, thus making it hard to attract new drivers.
In agreeing that the above were the key issues for the industry, CCN also
noted that a problem was that Taxi Networks have no statutory power to
require operators to operate WATs. So while they can encourage operators to
take-up WAT licences, CCN argued that at the end of the day, without an
ability to direct operators towards WAT licences it will always come down to
operators making a commercial decision on services they provide.
The ‘commercial decision’ view is one that is not restricted to operators but is
also shared by taxi drivers. Taxi driver, Chris Edwards, states that:
The WAT driver tends, therefore, to shy away from non profitable wheel
chair job offers by either not logging on or not logging on to a particular
suburb where it is known that there are wheel chair jobs on offer or not
responding to the radio call. That driver can then go back to the Airport
or City ranks and get ordinary profitable fares.
73
While the taxi industry notes there are financial issues in attracting operators
and drivers to provide WAT services, the Industry does recognise
improvements can be made. In their February 2004 Review of Fares for Taxis
in NSW - Issues Paper, IPART highlighted that the Taxi Council had stated in
its 2003 submission that it was determined to lift WAT service levels so that by
2005, the waiting times for WATs would be comparable to those of regular
taxi’s.
In an attempt to promote WAT provision and service levels, the Ministry of
Transport has, over the last decade, introduced a number of measures to
encourage the take-up of WAT licenses across NSW. These incentives have
included:





Providing short term $1000pa licenses for metro regions and free licenses
for country regions;
Reimbursing drivers for the cost of WAT training;
Providing interest free loans (max $30,000 or half the price of a vehicle) to
country operators for the purchase of or conversion of WATs.
Extending the regulated standard life of a WAT to 10 years (standard taxis
in metro are 6 years while country taxis are 8 years)
Van type WATs are able to charge higher rates when carrying 6 or more
passengers.
The fact that these incentives have not been very successful means that there
now needs to be more direct action taken by the Ministry of Transport and the
Taxi Industry to increase the take-up of WAT licences.
Options
The Inquiry believes the following options should be subject to further
investigation and referral to the WAT Taskforce, as a means to improve
WAT services:
Alternative/additional funding sources be developed to provide further
financial incentives to WAT owner/drivers;
Liaise with Taxi Industry and Government to identify potential new
market areas for WAT vehicles;
Increase the booking fee for WATs, or introduce a lift fee, so drivers are
financially incentivised to take WAT bookings;
Subject to independent review and analysis, nominate that a Taxi
Network has a prescribed percentage of WATs operating within its
network (eg 10%);
Based on population and demographic characteristics, the Ministry of
Transport should provide localised WAT targets for metropolitan and
country regions across NSW;
74
Promote the development and acquisition of a universally designed cab
which would be for both wheelchair and able bodied passengers; and
The Ministry of Transport should work closely with the Taxi Council and
Taxi Networks to ensure waiting times for WATs are comparable to those
of regular taxi services.
Sydney CBD – Restrictions on Taxis Setting Down/Picking Up.
The issue of the restrictions on taxi drivers setting down and picking up
passengers within the Sydney CBD area has been an on-going issue for a
number of years.
In December 1999, New South Wales adopted the national Australian Road
Rules. This resulted in changes to kerb-side traffic signage in many areas
within the CBD and the introduction of numerous ‘No Parking’ and ‘No
Stopping’ signs. The changes made it illegal to drop off or stop to accept fares
in many CBD areas.
The situation in the North Sydney CBD area is considered even worse for taxi
drivers. The taxi rank in Miller Street has been removed and stopping is illegal
on the Pacific Highway.
In order to comply with passenger’s requests, many drivers are required to
ignore the traffic signs and risk significant fines. Mr Peter Ramshaw, Assistant
Executive Officer, NSW Taxi Council informed the Inquiry that:
We (and the networks) receive complaints virtually daily from taxi drivers
who consider they have been unfairly booked for simply trying to meet
the needs of their passengers. In a number of cases they have been
physically threatened or assaulted by passengers if they do not stop
where the passengers want top get out. 34
Mr Ramshaw also supplied a map of the Sydney CBD area indicating
significant areas within the CBD where it is illegal to pick up or set down
passengers.
The problems caused by the restrictions have been recognised by the industry,
Government agencies, and City of Sydney Council for some time. City of
Sydney Council stated in September 2002: “
Of concern to the City, are informal indications from the Roads and
Traffic Authority that “No stopping” restrictions will soon be required to
replace existing “No Parking” restrictions on all non-signalised
intersections. Such restrictions would be inappropriate or unnecessary
in many instances in Central Sydney, and if implemented, would reduce
the legal options for taxis to pick-up and set down passengers. 35
34
35
E-mail from Mr Ramshaw to the Inquiry headed ‘CBD Taxi No Stopping map.
Letter to Transport NSW from City of Sydney Council dated 4 September 2002.
75
The Inquiry recognises that there are certain areas where taxis can legally set
down passengers, such as loading zones, motor bike parking zones, taxi
zones, works zones, etc. However, the reality is that it is impractical, if not
impossible to utilise many of these areas.
The Inquiry is also aware that some taxi drivers continually rank illegally in
certain parts of the CBD where parking restrictions apply. Quite correctly
infringement notices are issued when illegal ranking is detected. Whether this
situation is a result of too few or incorrectly placed taxi ranks needs to be
addressed.
In a letter dated 1 July 2003, the NSW Taxi Council advised the Lord Mayor:
The lack of available space where taxis can legally pick-up and drop-off
passengers in the CBD is a continuing source of frustration for drivers
and is a source of complaints and feelings of ill will from passengers.
The matter has come to a head as a result of significantly increased
enforcement and the subsequent increased incidences of drivers being
fined. Clearly drivers cannot afford to risk the cost of fines so unless
they are allowed to legally do what their passengers require, then
drivers will tend to avoid the city and services will be diminished as a
result. Taxis add significantly to the functioning and general milieu of the
CBD, we consider that the efficiency and effectiveness of taxi transport
in the city should be an important consideration for your Council. 36
Numerous attempts have been made to address the recognised problems
facing taxi drivers operating within the CBD. However, to date the issues have
not been resolved.
In a newspaper article in July 2004
for the Taxi Action Group, argued:
37
taxi driver Michael Jools, a spokesman
There aren’t enough taxi ranks around the city, which means the drivers
who can afford to turn down a fare will drive past people who are
standing in ‘no stopping’ zones trying to hail a cab.
Mr Jools said some drivers were prepared to risk a fine rather than lose a fare,
or have a complaint lodged against them with the Ministry of Transport.
Attempts have been made to address specific streets or areas within the CBD
identified as presenting problems for taxi drivers.
Rather than attempt ad hoc solutions, this Inquiry believes representatives of
the Ministry of Transport, RTA, City of Sydney Council, NSW Taxi Council,
NSW Police and drivers should attend a forum to identify the adequacy of taxi
facilities within the CBD’s of Sydney and North Sydney and identify the steps
needed to provide a practical solution for all parties.
36
Letter dated 1 July 2003 from NSW Taxi Council to the Lord Mayor, City of Sydney Council.
Sydney Morning Herald 10 July 2004 article by Alexandra Smith titled ‘Rising taxi rancour as
fines grow.
37
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Considering the lack of success to date, it may be appropriate that parties are
directed from a ministerial level.
Option
The Inquiry recommends a forum be convened to identify the problems
associated with supplying an acceptable taxi service within the CBD
areas of Sydney and North Sydney and provide acceptable solutions.
More specifically to address the issues of set down and pick up areas,
the location and number of taxi ranks but also to include other identified
issues.
Authorised Taxi Inspection Stations
Taxis in New South Wales are required to undergo inspection for compliance
with the Roads and Traffic Authority’s (RTA) vehicle ‘Safety Check’ standards
under the Rules for Authorised Inspection Stations.
In addition, taxis are required to comply with prescribed standards by means of
the Manual of Inspection Standards for Taxi/cabs, produced by the Ministry of
Transport.
Regulations and standards address the condition and cleanliness of taxis
including interior and exterior fixtures and fittings.
Taxis must also meet requirements in regard to safety equipment such as GPS
tracking, security cameras or security screens and other driver protection
equipment.
To ensure taxis meet all requirements, they must undergo regular inspections
at an Authorised Taxi Inspection Station (ATIS). An ATIS is a RTA Authorised
Inspection Station (AIS) staffed by qualified inspector/s who are authorised by
the Ministry of Transport to inspect taxis.
All ATIS inspectors are required to undergo additional specific training on taxi
standards. This additional training is arranged and administered by the NSW
Taxi Council.
To ensure on-going compliance with vehicle standards, Ministry compliance
staff undertakes daily on-road taxi vehicle inspections.
Approximately 1000 taxis are inspected each month. Taxis detected with
defects are issued with ‘Non Compliance Notices’ (NCNs).
The current on-road inspection regime is a huge drain on Ministry staff
resources.
77
IPART in its report on the Review of the Taxi Cab and Hire Car Industries
states:
The Tribunal favours a regulatory framework which requires taxi
companies and co-operatives to be directly responsible for driver and
vehicle standards, while DoT monitors and enforces service standards
maintained by the company or co-operative… 38
The Tribunal recommends that taxi companies and co-operatives be
made directly responsible for driver performance and vehicle standards.
39
This Inquiry agrees with IPART’s recommendations and believes Ministry staff
resources could be better utilised in a service monitoring capacity. In 2003, the
NSW Taxi Council trialed an initiative to improve taxi vehicle and driver
presentation standards.
The Taxi Council trained and engaged Quality Liaison Officers (QLOs) to
conduct random vehicle inspections throughout the metropolitan area. QLOs
are rostered on 3 to 4 days per week on a 7-day, 24-hour roster. Any
breaches of standards are reported back to the Taxi Council and relevant Taxi
Network.
The Taxi Council monitors the inspections and any required follow up by the
network.
It should be noted previous attempts at ‘co-regulation’ in relation to on-road
monitoring of vehicle/driver presentation were terminated following instances of
‘selective action’ being taken.
Drivers attached to Individual taxi networks were authorised by DoT to take
action against other taxi drivers found to be breaching regulations/standards.
DoT became aware that some authorised drivers were only taking action
against taxi drivers attached to networks other than their own. DoT
subsequently withdrew all industry compliance authorisations.
However, the current QLO trial is not faced with the dilemma of discriminatory
action being taken, as the QLOs are not attached to any taxi network and are
contracted only to the NSW Taxi Council.
A right of appeal should be included in any agreement made with the Taxi
council regarding QLO and vehicle inspections. The system of appeal would be
along the lines of the current ATIS appeal mechanism, suggested format:


38
39
The recipient of any disputed action contacts their network and advises
details of dispute,
The network arranges an independent inspection of the taxi. If this supports
first inspection, the operator must comply,
Page IV Overview and summary of recommendations – IPART Final Report.
Page 80 IPART Final Report Review of the Taxi Cab and Hire Car Industries.
78

If action taken by QLO was found not to have been justified, the matter is
then reported to Taxi Council for appropriate action and resolution.
Deliberate misuse or neglect of responsibilities by any QLO would result in the
withdrawal of any authorisation.
In its submission to the Inquiry, the Taxi Council stated:
Significant improvements have been achieved since the trial
commenced in late 2003.”…”The proportion of vehicles and drivers
found to be offending has decreased by about 80% since the
commencement of the trial.40
This Inquiry believes that the Ministry should liaise with the NSW Taxi
Council in regard to the expansion of the QLO trial and eventual transfer
of responsibility regarding vehicle and driver presentation compliance
from the Ministry to the Industry.
The Ministry should still be involved in vehicle quality control. This would
involve random or targeted audits of ATIS records and in particular recent ATIS
vehicle inspections, based on intelligence obtained from the Taxi Council, Taxi
Networks and also from the complaints database.
Option
The Ministry liaises with the NSW Taxi Council in formulating a strategy
and vehicle inspection regime where the Ministry takes on a less ‘hands
on’ role allowing a shift of responsibility from the Ministry to the Industry.
Ministry compliance staff should assume a greater monitoring role as
recommended by IPART. In regard to taxi presentation, this should
involve ATIS audits with removal of authorisation for ATIS noncompliance.
E Tags
The Inquiry has not had time to give full consideration to the issues
surrounding the implementation of E Tags in this Interim Report. However,
cursory investigation has made it clear that E Tags are an essential innovation
for Taxis and fully supports their implementation.
The Inquiry notes with concern that the taxi networks and industry bodies seem
committed to imposing the cost of the E Tag on the Driver: we do not believe
this is workable. Moreover, consultation with TransUrban has suggested that
their systems will provide the necessary accountability to enable operators to
monitor use. The inquiry believes operators should be responsible for E Tag
subscription and that this cost should not be borne by drivers.
40
Page 24 NSW Taxi Council Submission to the Ministerial Inquiry into the Taxi Industry.
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The Inquiry notes that there are plans to use the E-Tag system to collect other
tolls and charges such as the proposed Airport Toll. This toll is likely to have a
significant impact on business travellers who travel frequently and may create
a disincentive to use taxis if the toll is added directly to the metered fare.
However, the Inquiry does not believe that the toll can or should be absorbed
by the driver/operator and must therefore be passed on to the customer.
The toll may impact on the supply of Taxis to the airport.
This is an issue for further consideration.
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Conclusion
The objective of this interim report has been to identify and address the issues
that are constraining service improvement in the Taxi Industry in New South
Wales. It does not and cannot pretend to solve all the problems that have been
noted in the Report.
Some options for discussion have been suggested. These indicate the
direction in which the inquiry team believes the Government and the industry
should now move forward.
This report has been critical of both Government and Industry with regard to
past performance. However, the Ministry and industry submissions to the
Inquiry have made it clear that most participants realise that there is a need for
change in the way the industry does business, and that this change must
happen quickly.
In suggesting a forward agenda, it is obvious that the current regulatory
framework must change to reflect more self-determination on the part of the
industry and a greater attention to establishing, monitoring and achieving
minimum customer service standards.
It is not the role of Government to prescribe the operation of the industry, only
to ensure that it provides safe, reliable and quality service to the travelling
public.
The overall impression gained from the submissions, the interviews and the
other information gathered during the inquiry is that for a very long time the
regulatory framework has become distorted towards protecting the interests of
some industry players and in turn both punitive or ineffectual in managing
others.
It no longer provides an effective or appropriate structure to support or
encourage proper consumer protection, provide surety for industry investors
and the workforce or allow business innovation and growth.
In creating a co-regulatory approach, some previous decisions such as ad hoc
issue and variations in licensing conditions will need to be addressed. Creating
greater opportunities for competition on the delivery of dispatch services will
need to be debated and workable approaches to these issues, and others,
including “trunk” or private networks, will be implemented.
Discussion, development and implementation of these policy and operational
initiatives will be the first part of industry and government building a new
reporting and working relationship.
This will involve owner/drivers and drivers and will require the Ministry to
modernise its policy and consultation activities in relation to the taxi industry,
so that it can enhance its credibility as a source of reliable information and
analysis.
81
Overall the Ministry for Transport has demonstrated in the last 12 months that
it can and does achieve innovative and successful reform in other areas. Its
recent work on the delivery of bus services in the State must serve as a
positive example of what can be achieved.
In the next phase of the Inquiry, an Issues paper will be prepared for circulation
among all stakeholders. Further consultations will also take place, before the
preparation of a final report by the end of the year.
The inquiry team looks forward to exploring the ideas expressed in this report
with all interested parties, over the next three months.
82
APPENDICES
Submissions received:
(Persons or organisations who have made a number of submissions using the
same name have been listed only once.)
NAME
Adid, Mohammed
A’dison, Cheryl
Aquilina, John
Ahmed, Faruque
Anderson, P F
Anon
Anon
Anon
Anon
Anon
Armstrong, Hon Ian
Aston, Gregory
Badgery, Frank
Bailey, Trevor
Bailey, Philip
Baumgarten, Michael
Beamer, Hon Diane MP
Boumelhem, Tony
Bradley, Trevor
Brown, Tricia
Byrne, John
Burrell, Chris
Campbell, Hon David MP
Campbell, Malcolm
Chaudhry, Rajendra
Chesterton, Rhonda
Clifford, Pamela
Coates, Geoff
Coe, David
Coleman, David
Crittenden, Paul MP
Crofts, David
Cusick, Richard
Deal, Anthony
Debman, Peter MP
Demas, Andrew
Doyle, Sharon
ORGANISATION
The Limousine Line
NSW Cabbie Welfare Assoc. Inc.
Member for Lachlan
Member for Mulgoa
ACU University
UniCab Australia Pty Ltd
Member for Illawarra
Transport Workers Union of Australia
Premier Cabs Pty Ltd
TWU Representative
Unicab Australia
Member for Wyong
City Strategy - Newcastle
Member for Vaucluse
Cabcharge Australia Ltd
83
Earp, Michael
Edwards, Chris
Elias, George
Fahoun, Arof
Frazer, David
French, Phillip
Fuentes, Flavio
Gooch, Astrid
Goodworth, Geoff
Grove, Colin
Graham, Jenny
Harmata, John
Harrison, Howard
Hayle, Ron
Hawtin, Warren
Heaton, A
Henderson, Dr Michael
Hedley, Ross
Hinde, Michelle
Hirsch, T J
Hitchenson, Mark
Hoenig, David
Houlihan, Paul
Hunt, Lisa
Ireland, Maryanne
Johnson, Anna
Jools, Michael
Jools & Bradley
Katakalos, Arthur
Kelly, Peter
Kennedy, Paul
Kondic, James
Lang, Phil
Lawrence, Ian
Lennon, Cliff
Lewis, Vivienne
Lindholdt, Peer
Lukabyo, Fred
Lussick, Wal
Mannion, Patricia
Martin, Michael
Marshall, Col
Maunder, Ray
McAully, Neil
McMahon, Les
McPherson, John
McKenzie, Jim
Mintz, Phillip
Mollenhauer, Ernie
Moore, B
Moore, Clover MP
Newcastle Alliance
People With Disabilities
Sydney Airport Corporation Ltd
Newcastle City Council
NSW Taxi Council Ltd
St George Cabs Co-op’ Ltd
Camden Council
Transurban NSW & QLD
Paraquad Newcastle
Office of the NSW Privacy Commissioner
Taxi Action Group
Cabbie Magazine
Combined Communications Network
Manly Cabs (Trading) Co-op’ Soc’ Ltd
True Blue Taxis
Legion Cabs (Trading) Co-op’ Soc’ Ltd
Member for Bligh
84
Moore, Gary
Moore, Peter
Musgrave, David
Nelson, Ross
Nevinson, Wayne
Nickel, Grant
Nicholas, Andrew
O’Conor, R G
Orkopoulos, Milton MP
Petition with 52 signatures
Polonski, Sergio
Potter, Felix
Poulton, Chris
Ranford, Craig
Ratay, Maureen
Ridley, Michael
Rigas, Nicholas
Roberts, Jenny
Rofial, Soloman
Rowe, James
Russell, Erick
Ryan, Hon Susan
Sartor, Hon Frank MP
Schmidt, Gary
Schwaiger, Heinz
Scifo, Gerard
Scott, Tim
Scully, Hon Carl MP
Scruby, Harold
Shevels, Valerie
Sidhu, Dilbah
Simmonds, Sue
Sistynine, Rhino
Slee, Roger
Small, Peter
Smith, John
Stanfield, Phillip
Stewart, Laurie
Stokoe, Brian
Strange, Richard
Strathmore, Michelle
Tink, Andrew MP
Tougher, William
Utting, Doug
Versteege, Paul
Wallis, Ray
Watkins, John
Walmsley, David
Weldon Brother
West MP, Grahame
Council of Social Service of NSW
Spinal Cord Injuries
The Sydney Taxi School Pty Ltd
Member for Swansea
Wesley Mission
Sydney Metropolitan Taxi Association
RSL Ex-Servicemens Cabs Co-op’ Ltd
representing Perry, Barbara MP, Member for
Auburn
Member for Rockdale
Schmidt Electronic Lab’ Pty Ltd
Telstra
Minister for Roads
Pedestrian Council of Australia
Carers Action Network
Southern Highlands Taxi Service
Raywood Communications
Member for Epping
Spinal Cord Injuries Australia
Member for Campbelltown
85
Wilkins, Brian
Williams, Elizabeth
Williams, Faye
Williamson, Peter
Country Taxi Operators Association
Bretabac Pty Ltd
86
1999 IPART Report on Taxis & Hire Cars – Status of Implementation of
Recommendations
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
Recommendation 13 (Sect 9.2.2 in Report)
The Tribunal recommends that the number of taxi licences in Sydney
be increased by 5 percent per annum between 2000 and 2005, and that
in 2003 the Government review outcomes of these and other measures
arising from the Tribunal’s recommendations
The number of Sydney taxi licences should be
increased by 5% pa for five years
Recommendation 14 (Sect 9.2.3 in Report)
The Tribunal recommends that all new licences issued in Sydney
between 2000 and 2005 be six-yearly, non-transferable licences.
Recommendation 15 (Sect 9.2.5 in Report)
The Tribunal recommends that any additional licences to be issued be
leased via a transparent tendering process.
Recommendation 17 (Sect 9.2.5 in Report)
The Tribunal recommends that all new licences issued between 2000
and 2005 require that the licensed taxi be on the road between 2 and 4
pm each weekday.
Recommendation 1 (Sect 5.7 in Report)
The Tribunal recommends that the Department of Transport develop
and publish at six monthly intervals the results from the measurement
of the demand for and supply of taxis services. These measures should
include:
 waiting times at taxi ranks for passengers and taxis at the head of
the queue – measured by surveying ranks at six monthly intervals
 average waiting times for radio bookings – measured by
comparing audited statistics provided by taxi companies and cooperatives
 average numbers of radio bookings per vehicle – measured by
comparing audited statistics provided by taxi companies and cooperatives
All additional licences issued should be 6 yr
short-term ones, be issued by tender, and the
taxis must be on the road every weekday
between 2pm and 4pm
This was estimated to have increased the number of Sydney
taxis by 1,268 and was not implemented. However, 60
unrestricted short-term licences were issued in 2000,
Wheelchair Accessible Taxi (WAT) restricted licences have
been issued on request for some time and continue to be so
issued.
60 licences were issued by tender for 6 year terms but did
not require the taxis to be on the road between 2pm and
4pm. However, regulations now require WATs to remain
on road during driver changeover period.
The results from the measurement of the supply
and demand for taxis be published by the
Department every 6 months
Not implemented due to lack of funding and staff resources
87
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
Sydney WAT licence fees should be reduced to
$1,000 pa, minimum operating hours should be
reduced to 10 a day and drivers should be paid
an extra $5 for WAT jobs


average number of hirings per vehicle – measured by sample
recordings of vehicle movements and hires using GPS tracking
Recommendation 3 (Sect 5.9.1 of Report)
The Tribunal recommends that the annual fee for a metropolitan
wheelchair accessible taxi licence be reduced to $1000, the minimum
operating hours be reduced to 10 hours per day, and the Taxi
Transport Subsidy Scheme be adjusted to pay drivers an additional $5
collection fee for each hiring.
Recommendation 11 (Sect 8.4.3 of Report)
The Tribunal recommends that current network performance standards
be regarded as benchmarks and that the Department of Transport
prepare a public report every six months comparing the performance
of each Sydney taxi company and co-operative against these
benchmarks.
A public report should be prepared monthly
comparing taxi network performance
Recommendation 12 (Sect 8.5 of Report)
The Tribunal recommends that taxi companies and co-operatives be
made directly responsible for driver performance and vehicle
standards.
Taxi networks should be responsible for driver
performance and vehicle standards
Recommendation 5 ( Sect 5.10.4 of Report)
The Tribunal supports continued regulation of complaints handling,
but recommends that the Department of Transport take a more active
role in investigating complaints, taking disciplinary action where
warranted, and reporting back to passengers.
The Department should take a more active role
in complaints handling
Recommendation 19 (Sect 10.4.1 of Report)
The Tribunal recommends that the current restriction on the number of
hire car licences be removed. Hire car licences should be issued to
any person who can satisfy the quality-based entry requirements. All
hire car businesses should operate under the same licence
conditions.
All hire car businesses should operate under the
same licence conditions
Setting of short-term WAT licence fees at $1,000 pa
implemented
 The requirement for a minimum time on the road has
now been removed having originally been 0 hours, then
20 hours, then 10 hours
 The cost of paying a fee for WAT jobs was considered
prohibitive (estimated at $3,000,000 pa)
Not implemented due to lack of funding and staff resources
Under implementation. Network standards have been
drafted and circulated among Taxi Advisory Committee
members for comment. When their comments are received
they will be considered for incorporation before circulation
of a new draft for public comment.
Implemented. An improved taxi complaints systems
commenced operation of the 14th April, 2003
Not implemented. It was not considered appropriate that
hire cars restricted to school formals, weddings and funerals
(for which driver authorisation and licences are not
required), should be able to perform unrestricted hire car
work for which both a licence and a fee are required, plus
driver authorisation
88
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
Recommendation 20 (Sect 10.4.1 of Report)
The Tribunal recommends that area-based restrictions on hire car
licences be removed
Area-based restrictions on hire car licences
should be removed
Recommendation 21 (Sect 10.4.2 of Report)
The Tribunal recommends that hire car licence fees be reduced to an
amount which reflects the administrative and compliance costs
associated with the industry.
Hire car licence fees (in Sydney) should be
reduced to an amount which reflects the
administrative and compliance costs associated
with the industry
Recommendation 23 (Sect 10.4.4 of Report)
The Tribunal recommends that regulations governing the management
of hire car businesses be removed unless necessary to address specific
service quality issues.
Regulations governing the management of hire
car businesses should be removed unless
necessary to address specific service quality
issues
Not implemented. Many country licensees (who have paid
comparatively small licence fees) would have been able to
compete unfairly with Sydney and North Coast operators
who have paid much more for their licences.
Sydney fees have been halved (to $8235 pa) but lowering
fees to levels recommended by IPART (estimated between
$100 and $1,500), was considered to have amounted to
almost total deregulation overnight. The new Sydney fee is
due for review after August, 2003
Not implemented. Following public consultation on the
draft new Regulation in 2001 there was no support for
substantially less control over standards, service and safety
issues covered in the Regulation.
Recommendation 24 (Sect 10.4.5 of Report)
The Tribunal recommends that the current regulation of hire car
vehicle standards be maintained.
To avoid developing a large mini-cab industry
as in Britain, the current regulation of standards
should be maintained. In this contest IPART
says that the process of reducing regulation must
be gradual and that some regulation should be
maintained over the next five years.
The prohibition preventing hire cars from plying
for hire and standing on ranks should continue.
Accepted and implemented. While the standards have been
maintained, many unnecessary restrictions have been
removed in line with IPART’s concerns. This has resulted
in a much greater choice of vehicle types and removed age
limits.
The Department should investigate whether the
regulation of hire cars in rural and regional areas
should be delegated to local councils.
As mentioned above, public consultation has already
confirmed that there is no support from any quarter for this
in respect of taxis and there is not doubt that the situation
with hire cars would be the same.
Recommendation 25 (Sect 10.4.6 of Report)
The Tribunal recommends that the prohibition preventing hire cars
from plying for hire through street hails and at taxi ranks be
maintained.
Recommendation 22 (Section 10.4.2 of Report)
The Tribunal recommends that the Department of Transport
investigate whether hire car regulation should be delegated to local
councils in rural and regional areas in conjunction with the regulation
of taxis.
Accepted and implemented. The prohibition has been
specifically spelt out in the new Regulation as an offence.
89
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
Recommendation 6 (Sec 6.2.1 of Report)
The Tribunal recommends that the Department of Transport review the
effectiveness of the current taxi driver training syllabus and testing
procedures. The Department of Transport should set the curriculum
and examine applicants on the course material. Accreditation with the
Department of Transport should not be a pre-requisite for teaching the
taxi driving course. Applicants should be permitted to sit the
examination after completing a self study course if they choose not to
attend a school.
Taxi drivers training and testing should be
reviewed, training schools should no longer be
approved and open learning by applicants should
be accommodated,
Accepted and implemented, thought there is still some work
to do before full open learning access is available.
Recommendation 18 (Sect 9.2.6 of Report)
The Tribunal recommends that the Department of Transport in
conjunction with industry and local councils, investigate options for
delegating the regulation of taxis in NSW rural and regional areas to
local councils.
Investigate options to delegate the regulation or
rural taxis to councils
Implemented. Investigations, including extensive public
consultation, confirmed that there was no support for such a
proposal from any sector
Recommendation 7 (Sect 6.2.2 of Report)
The Tribunal recommends that driver safety be a key objective of
regulating the taxi industry. Enhanced driver safety will directly
benefit drivers and passengers as it will improve drivers’ working
conditions and should increase the availability and quality of taxi
services.
Recommendation 8 (Sect 6.2.2 of Report)
The Tribunal recommends that the Department of Transport audit
operators’ compliance with insurance requirements and educate
drivers and operators about Insurance and WorkCover requirements.
Driver safety should be a key objective of
regulating the taxi industry
Implemented. Examples include requirements for vehicle
tracking devices, driver security cameras, internal boot
releases and driver training on the avoidance and handling
of threatening situations. Regular surveys are also carried
out in regard to taxi driver safety.
The Department should audit operators’
compliance with insurance requirements.
Accepted and implemented, involving much tighter new
legal requirements on operators.
Recommendation 9 (Sect 7.3.4 of Report)
The Tribunal supports the continued regulation of vehicle standards,
but recommends that the maximum age of taxis operating in rural and
regional areas be increased to 8 years.
The maximum allowable age of rural taxis
should be increased to 8 years
Accepted and implemented
90
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
Recommendation 10 (Sect 7.3.4 of Report)
The Tribunal recommends that the Department of Transport institute a
system to penalise authorised taxi inspection stations if they fail to
inspect taxi vehicles properly.
Recommendation 16 (Sect 9.2.4 of Report)
The Tribunal recommends that area-based operating restrictions be
removed from the 25 licences in Sydney which are limited to operating
to operating in suburban and city fringe areas.
Authorised Taxi Inspection Stations should be
penalised if they fail to inspect taxis properly
Recommendation 19 (Sect 10.4.1 of Report)
The Tribunal recommends that the current restriction on the number of
hire car licences be removed. Hire car licences should be issued to
any person who can satisfy the quality-based entry requirements. All
hire car businesses should operate under the same licence conditions.
The current restriction on the number of
(Sydney) hire car licences should be removed
Implemented. If an authorised officer at an Authorised
Taxi Inspection Station is found not to be satisfactory
checking the ‘comfort standards’ of taxis, the authority may
be revoked.
Not implemented. Experience showed fringe area taxis
tended to work in the more lucrative parts of Sydney, at the
expense of the fringe areas. Fringe area contracts are now
being phased out and replaced with new operating areas on
the country model, with licensees restricted to operations in
such areas. This is expected to significantly improve
services in Sydney’s fringe areas.
There has never been a limit on the number of short-term
hire car licences available to the public
Recommendation 19 (Sect 10.4.1 of Report)
The Tribunal recommends that the current restriction on the number of
hire car licences be removed. Hire car licences should be issued to
any person who can satisfy the quality-based entry requirements. All
hire car businesses should operate under the same licence conditions.
Hire car licences should be issued to any person
who can satisfy the quality-based entry
requirements
Metropolitan fringe area taxis should be free to
operate throughout Sydney
There are no criteria applicable to licensees.
These Recommendations not specifically picked up by Dept
Recommendation 2 (Sect 5.8.3 of Report)
The Tribunal recommends that the Department of Transport adjust
fares from Sydney Airport by setting a minimum fare of $10.
Recommendation 4 (sect 5.9.1 of Report)
The Tribunal recommends that the Department of Transport amend
taxi network standards to require Sydney taxi networks to be
responsible for the service standards provided to passengers with
disabilities and that the Department of Transport monitor and enforce
these standards. Sydney taxi networks should be required to have 10
91
IPART RECOMMENTATION
RECOMM AS NOTED BY DEPT
STATUS
per cent of their fleets as wheelchair accessible vehicles.
92
93