Uber and Out: Claims for Taxi reform compensation cash now open

Legalising Uber will cost $250mil.


The Baird Government has officially opened the door to its ambitious $250 million compensation package for New South Wales taxi and hire car licence holders hit by the biggest regulatory shake-up of the sector in the state’s history, urging those affected to apply for “transitional assistance payments” of up to $20,000.

The much anticipated compensation cash package comes as Transport and Infrastructure Minister Andrew Constance presses on with reforms revealed in December last year that effectively legalised ride-sharing operations like Uber in the state at the stroke of a pen –but sent the value of taxi and hire car plates plummeting.

Already feeling the heat from competition regulators, the taxi industry in NSW – like other states – had been fighting a rear guard action to maintain what had been a crumbing legal monopoly under siege from online ‘point-to-point’ network operators which use private cars and drivers.

Although widely embraced by passengers, the new services created a significant problem for the government because they not only flew under the regulatory radar, but stripped away valuable revenue as well.

“We’ve ushered in a new era for the transport economy under the new Point to Point Transport Act, providing taxi, hire car and rideshare customers with more choice and increased competition,” Mr Constance said.

“In recognition that these reforms have liberated the point to point market, we’ve put in place one of the most generous industry adjustment packages in the world for taxi licence holders.”

While the changes undoubtedly legitimised newer ‘booked services’ operators and drivers who had previously faced stiff fines and prosecution, they also put the onus for compliance back onto network operators and businesses rather than leaving it to individual drivers.

At the time Mr Constance vowed the creation of a new, stand-alone, watchdog in the form of a specific Commissioner would be “the toughest regulator the NSW point to point transport industry has ever had.”

The Transport Minister also found himself getting some free advice from Apple co-founder Steve Wozniak at a press conference that Uber should not be allowed to become a monopoly.

Powers provided to the new Commissioner include ability to hit companies that fail to meet safety requirements with big, court imposed fines that are based on an offending firm’s profitability rather than a traditional sliding scale that typically hit drivers rather than their employers.

The get tough push also included criminal sanctions and jail sentences of up to two years “for nominated directors and managers found guilty of serious safety breaches” to discourage corners being cut.

“For the first time the buck will stop with the company making profit from the services – not just the driver,” Mr Constance said in December last year.

But before the regulatory stick is applied, the Baird government wants drivers and operators that have been financially hit by the legalisation of ride sharing to access relief funds.

Mr Constance said the NSW Government would now “write to more than 4,000 eligible licence holders” to let them know how to apply for the money, and would process each application “as quickly as possible.”

More specifically the $250 million relief package includes:

  • $98 million for payments of $20,000 per ordinary and transferrable licence, for up to two licences, for licences held before 1 July 2015;
  • $142 million for taxi licensees facing hardship as a result of the changes; and
  • Up to $10 million for a buy-back scheme for perpetual hire car licensees.

Mr Constance said affected licence holders would be able to access “dedicated Taxi and Hire Car Business Advisors” as well as or the NSW Taxi Council to get help filing applications for financial relief.

Applications for the money close on 13th January 2017 and can be made at www.transport.nsw.gov.au/pointtopoint/industry-assistance.

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One thought on “Uber and Out: Claims for Taxi reform compensation cash now open

  1. Oh goodness another industry being propped up by consumers — ie, taxpayers — contrary to their same interests. When is govt going to start looking after its main revenue suppliers.

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