Part D – Understanding and improving industry performance (PDF ...

Secondary networks – customer choice at work
The inquiry has found high levels of satisfaction with the
performance of secondary networks, with many regular
taxi users commenting that these networks provide more
reliable services than ‘standard’ taxi services. Benefits
reported by secondary network taxi customers include
knowing which driver is coming and when; having
access to a regular and trusted driver; and being able to
negotiate flat fares.
Generally, these customers report having obtained the
details of a particular driver or group of drivers from a
friend or colleague. They then call the driver or network
whenever they need a taxi.
The consumer research conducted for the inquiry by
Ipsos Social Research Institute also found that a number
of taxi users attributed their positive experiences to
having access to a secondary network. Ipsos reports that
these users:
…overwhelmingly found that such drivers
provided a far higher quality of service than the
standard, and were particularly pleased with
their reliability. Secondary network taxis were
also seen to be of a cleaner, more comfortable
standard. Further, as booking a taxi through a
secondary network bypasses the need to use a
booking service, passengers are usually informed
when the taxi will arrive and whether or not there
will be a delay … 24
Organisations working with people with a disability also
report ‘bypassing’ the primary NSPs to form relationships
with regular drivers and secondary networks. For
example, Blind Citizens Australia comments:
Many people who are blind or vision impaired choose
to establish a direct relationship with one or two
drivers, or a small network of drivers, with some
members noting that this guarantees them a better
quality service. 25
The Ipsos research identified examples where accessing
taxi services “was easy and customer centred in design”
and noted that most of these examples came from users
accessing services through a driver they know or a
secondary network. The Ipsos report concludes:
These services are seen to be comfortable, reliable
and driven by professional, friendly drivers.
Secondary network taxis also have benefits in terms
of access in that they can be booked through direct
contact with a driver, eliminating the need for booking
services. This model should be considered in
improving the broader taxi industry. 26
11.3. History of taxi networks
Taxi networks have played an integral role in forming
the structure of the taxi industry in Victoria. This next
section looks at their influence and evolution from
representative organisations into the corporations that we
see today. Their important role in leading innovation in the
technology field is also analysed.
11.3.1. Cooperative monopolies
As described in chapter 6, the Transport Regulation
Board (TRB) assumed responsibility for regulating the
commercial passenger vehicle industry in Victoria in
1952. The TRB found that while taxis were available
within 5km of the city centre, Melbourne’s suburbs had
very limited access to taxi services. To address this issue,
the TRB divided suburban Melbourne into a number
of taxi zones. Suburban taxi companies and individual
operators were then amalgamated as ‘depots’ with the
aim of ensuring that phone bookings for taxis could be
met efficiently. This early structure for booked services
contemplated – either consciously or not – that monopoly
providers in each zone would offer the most efficient
means of delivering a quality taxi service to customers.
Typically, early taxi depots were member-based
organisations run by taxi operators on a cooperative
basis. Taxi operators were directly involved in the
running of the depots and in making decisions about
depot rules and activities. Depots also assisted their
operator members by offering better buying power for
consumables such as fuel, vehicle parts and repairs.
Drivers were often placed in a common ‘pool’ by each
depot and shared by the taxi operators.
24 Ipsos Social Research Institute (2012), Op.Cit., p.80
25 Blind Citizens Australia, Submission to the Taxi Industry Inquiry,
SS155, p.2
26 Ipsos Social Research Institute, Op. Cit., pp.96-97
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