Taxi and hire car industry reforms

The Victorian Government is introducing Australia's first fully open and competitive commercial passenger vehicle regulatory model, which puts passengers first.

Taxi and hire car services, which include rideshare services, will operate under an aligned set of rules for the first time, creating a level playing field for all industry participants. This will drive greater consumer choice, better service and decrease fares.

Passenger safety will be strengthened by the accreditation of all drivers including rideshare drivers, which involves police checks. Industry will be held to account for training and education.

Operating a taxi or hire car will be simple and more affordable – with annual licence fees of up to $23,000 removed.

The commercial passenger vehicle service levy - a $1 per trip levy on the industry - will help support a fair, reasonable transition package and improvements to accessible point-to-point transport services.

What’s changing?

More choice, on demand

Once the final changes come into effect in early 2018, all vehicle licensing requirements will be removed and replaced with a simple vehicle registration process.

Removing the licensing requirements will make it easier for service providers to enter and compete in the market. More competition means:

  • more choice
  • shorter wait times
  • better value
  • improved service standards.

Improved safety and accountability

Providers of commercial passenger vehicle services booked, for example, on the phone or via an app, will have greater responsibility for safety and service delivery.

The Taxi Services Commission requires booking service providers to be accredited, so they can be held to account for these responsibilities. They will need to demonstrate they have effective processes in place for dealing with safety issues, customer complaints, service quality concerns and protect the privacy of passengers and drivers when bookings are taken.

The TSC requires all drivers, including rideshare drivers, be accredited, which includes passing police, medical and driving history checks and being subject to ongoing criminal data matching.

The government will continue to work with Victoria Police to ensure the safety of passengers.

Vehicles providing services booked on the phone or via an app will need to meet the same basic safety requirements expected of all passenger vehicles. Vehicles engaging in rank and hail work will need to meet additional requirements such as installing cameras. This recognises the anonymous nature of rank and hail work.

Better services for people with a disability

The government is investing $25 million to improve and expand commercial passenger vehicle services for people with a disability.

The wheelchair lifting fee, an incentive paid to taxi operators and drivers, has already been increased from $16.70 to $20 per trip.

We have committed to appoint a dedicated Commissioner for disability services to the Taxi Services Commission.

We have also started a review of all subsidies and incentives for accessible point-to-point transport services to provide users with better access to convenient and reliable transport.

Flexible fares

Once the reform package is fully implemented in 2018, all booking service providers will be able to set their own prices for booked (i.e. via an app) work.

This gives providers of booked services the flexibility to offer passengers loyalty discounts and cheaper fixed fares for popular trips, such as from the CBD to Melbourne Airport.

Maximum fares for unbooked (rank and hail) services will still be regulated in metropolitan and urban zones.

More consumer protections will be in place to help passengers make informed choices (for example, requiring an accurate fare estimate is provided to passengers before the trip begins).

Industry levy

A $1 per trip industry levy (the commercial passenger vehicle service levy) will apply to all commercial passenger vehicle trips, starting in 2018.

The levy will fund Australia’s most generous transition package for the taxi and hire car industry and improvements to accessible transport services.

The levy replaces annual licence fees of up to $23,000 which should considerably reduce the cost of operating a commercial passenger vehicle service, allowing cheaper fares for passengers.

Service providers – not consumers – will be required to pay the levy for each trip. It will be calculated on a total number of trips and booking service providers will be able to choose when and how they apply it in the new flexible fare environment.

The levy start date will be 1 July. For more information about the levy, see the State Revenue Office.

Simpler vehicle licensing requirements

Once the final changes come into effect in 2018, all vehicle licensing requirements will be removed and replaced with a simple vehicle registration process. This will make it cheaper and easier for service providers to enter and compete in the market.

Industry transition assistance

The Victorian government is supporting the taxi and hire car industry with a $494 million assistance package - the largest industry assistance package in Australia.

The support package includes:

  • Transition assistance payments
  • Fairness Fund
  • Rebates to annual and peak service licence holders

Legislative change

Victoria’s taxi and hire car reforms are complex and will be delivered through two sets of legislative change.

The Commercial Passenger Vehicle Industry Bill 2017 passed by the Victorian Parliament on 10 August 2017:

  • abolished licence fees for taxis and hire cars
  • allowed for the regulation of rideshare providers in Victoria
  • established the framework for a $1 per trip industry levy (the Commercial Passenger Vehicle Service levy) which will start in 2018.

The Commercial Passenger Vehicle Industry Amendment (Further Reforms) Bill 2017 passed by the Victorian Parliament on 12 December 2017:

  • removed the distinction between taxis and hire car (including rideshare) vehicles, making them all commercial passenger vehicles
  • introduced flexible fares for all booked (ie via an app) commercial passenger vehicle services along with stronger consumer protections
  • regulated maximum fares for unbooked (rank and hail) commercial passenger vehicle services in metropolitan and urban areas
  • replaced complex licensing requirements with a simple registration system
  • made all industry participants responsible for passenger and driver safety
  • gave the industry regulator extra enforcement powers to reflect its new broader focus.

The reforms will be progressively implemented throughout 2018.

The levy will commence in 2018 after the new consumer protection provisions are in place. The exact date will be confirmed in 2018.

More information

For more information, visit the TSC website.