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Commercial Passenger Vehicle Industry Bill 2017

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Sam Hibbins MP
Member for Prahran
16 March 2017

Mr HIBBINS (Prahran) — I rise to speak on behalf the Greens to the Commercial Passenger Vehicle Industry Bill 2017. The disruption that has occurred in the taxi industry and the hire car industry through the arrival of Uber and other rideshare services has certainly brought incredible upheaval to that industry over the last few years, and this is something that I think governments around the world are grappling with.

Mr HIBBINS (Prahran) — I rise to speak on behalf the Greens to the Commercial Passenger Vehicle Industry Bill 2017. The disruption that has occurred in the taxi industry and the hire car industry through the arrival of Uber and other rideshare services has certainly brought incredible upheaval to that industry over the last few years, and this is something that I think governments around the world are grappling with.

This is an industry that was already facing a number of challenges. When you look at it I think that everyone understands that this really is an industry that was ripe for the sort of disruption that we are seeing across many industries. There were very high fixed costs for licensees to get their cars on the road — the cost of the licence, the cost of insurance, other regulatory requirements, the cost to maintain the required standards and obviously the other regulatory arrangements around set fares.

Can I just also thank the licence-holders who took the time out to visit my office to come and talk to me to discuss many of the concerns that they had, and to enlighten me with some of the challenges that they face in their industry. I really appreciate the time that the licence-holders in my electorate took to come and see me.

What we also took from these meetings was that we had an environment that was ripe for disruption. We had, essentially, somewhat of a monopoly by having just a number of booking agencies. That, in my view, led to a real lack of innovation and improvement within the sector. Then you had a competitor coming in with lower fixed costs and new and accessible technology that appealed to a lot of people. You did have the kind of disruption that we are now seeing.

This bill is really a set of judgement calls on the major issue of how you now regulate and bring these new rideshare services into the tent rather than leave them operating outside the existing regulatory framework. There are a number of questions. Are there valid compensation claims from licensees? Who should be paying for this: the new entrants, the rideshare operators, the passengers or the taxpayer? How should these funds for compensation be collected? And how do we very importantly ensure that those vulnerable passenger groups — those who rely on existing taxi services, the elderly, hospital patients, their families, people with disability, pensioners, communities in regional and rural Victoria — how do we make sure that they are not disadvantaged by any further changes?

As I said, Uber and other ridesharing services have disrupted the existing taxi industry and their business model. It provides a similar service of point-to-point transfer for a fare, and what we have essentially are the legal and regulatory environments that you would come to expect from a taxi — the regulation of the fare, the certain standards that they are required to abide by, grievances being able to be raised with the Taxi Services Commission — all being bypassed by the app-based rideshare service and the tracking system and booking service that they have. So to have one set of regulatory arrangements for taxis and a different set for rideshare providers is obviously problematic, and the Greens certainly support the regulation and the legalisation of ridesharing services.

Prior to the changes in the sector in 2016, to enter the taxi market an operator had to own or lease a licence. If taxi licences were to continue as an asset, certainly there would be a financial impost on the taxi operators that is not experienced currently by rideshare operators, despite the fact that they are offering an equivalent service.

The decision by this government is to go for a unified commercial vehicle licence. That is the way forward that they are pursuing and, in doing so, they are abolishing taxi licences. I understand that there are some taxi licence holders that want this status to be reinstated, but it does seem incredibly unlikely that this government would be inclined to do so. And if there was, one would see that there is a risk in the market for those licences, as they might not be resurrected after being suspended for several months, particularly if it is possible to quickly, easily and cheaply become a rideshare driver.

In terms of moving on to compensation, if you are going to be abolishing taxi licences, you have got to ask: is there a valid claim? I mean, the government did create these taxi licences. They did generate from the state. Many of them were obtained through private transfer, but they did originate with the government, and the government is essentially nullifying their status to create this unified licence, which has made their value essentially zero. This does imply that there are valid reasons for compensation for taxi licences but, as mentioned by previous speakers, each taxi licence has its own complex and different history of how it was obtained.

Some were obtained many decades ago, when the cost of the taxi fare has been long recouped. Some licences were traded earlier this decade for prices in excess of $400 000, and some people who obtained these licences did make very significant financial decisions to obtain those licences: houses were mortgaged, relatives were called on for loans and trusts were established with multiple benefactors. If you consider the financial stress that these people are under, there certainly is a valid claim for compensation. There are some people whose taxi licences are essentially their nest egg, their life savings. They are relying on it for their retirement. Do these people deserve compensation? Well, certainly they do. There certainly is a case for them to be compensated.

Considering that there is a dedicated regulatory body in the form of a Taxi Services Commission that notionally monitors the sale and purchase of taxi licences, you would think there would be a comprehensive dataset that provides the full history of each licence to really facilitate the issue of compensation and how each licence-holder would be compensated based on the price paid for their licence and what price was paid. But we have been advised unfortunately that this data from the Taxi Services Commission is unavailable, which is incredibly disappointing.

So in the absence of enabling a more sophisticated and detailed approach to compensation, the government has gone for a one-size-fits-all approach. Regardless of how much was paid for the licence or how long it has been held, the compensation totals $100 000 for the first licence and $50 000 each for the subsequent three licences.

For some taxi licence holders, who have got 40 or more licences, this would be welcome, and they would be likely to survive and prosper in the deregulated environment. For families that have mortgaged their house and have paid over $400 000 — —

Mr Gidley — As I have indicated previously, Acting Speaker, this is a very serious issue. It requires the due attention of members of the government because it is a government bill. There are many members in the bar, not in here listening to the debate and considering the debate, and I draw your attention to the state of the house.

Quorum formed.

Mr HIBBINS — As I was saying, clearly, for those who really rely on their licence as their nest egg or have paid significant amounts for it, the $100 000 is still likely to result in significant negative financial outcomes. There is a Fairness Fund that has been proposed by the government to assist those who face, essentially in some cases, financial ruin, but this does seem to be a messy arrangement where there are going to be winners and losers.

There is a $2 per trip levy proposed, and this has been opposed to varying degrees by almost every stakeholder in this industry: the operators, the rideshare drivers, booking service providers and passengers. Our main concern with the levy is how it affects vulnerable groups, including those who rely on taxis every single day, and there are a wide range of people who do that for a variety of reasons. This would add up to several hundred dollars a year. The people who rely on taxis and use them almost every day are often the least well off and the most vulnerable in our community. The impact that this $2 levy would have on them is a serious concern for us. It does feel that the projected revenues collected from this levy are a conservative estimate and they may underestimate how much will actually be collected.

People with disabilities are also a major concern for us. They are heavily dependent on point-to-point transport — on the multipurpose taxi program subsidies. Their experiences had been varied: some have had great service for many years with the same driver in a fully compliant wheelchair taxi; others have had very poor experiences. We understand that reforms to this industry do have the potential to increase the range of services available to people with a disability, but certainly the regulatory environment and the controls provided for people with a disability need to make sure that no person with a disability is left out and no geographic region is left out either.

It is the Greens' position that these issues need to be assessed further before this Parliament can make an informed decision. Therefore I am going to move a reasoned amendment, which I understand will be an amendment to the opposition's reasoned amendment: I move:

That all the words after 'until' be omitted with the view of inserting in their place the words 'the Legislative Council economy and infrastructure committee has tabled its report on the need for, and appropriate structure of, regulation of ride sourcing services such as Uber'.

There is an existing committee inquiry looking into these matters, and this amendment will allow the opportunity for in-depth examination of the issues and allow for the further input of experts, individuals, businesses and government organisations. As I said, there is an existing committee inquiry looking into these matters. I am not of the view that we need to refer this to the Public Accounts and Estimates Committee, as the opposition has proposed. I think there already is an existing inquiry looking into this issue, and that would be the best place for this bill to be considered.

I am moving that reasoned amendment, but in doing so I also state that the Greens cannot support this bill in its current form.

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Sam Hibbins MP
Member for Prahran
16 March 2017




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