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

In 1999, the Victorian Government entered into a
contract with Cabcharge to use its in-car EFTPOS
system to automate the Multi Purpose Taxi Program
(MPTP), a taxi subsidy scheme for Victorians who are
severely and permanently disabled. To facilitate the new
arrangements, the regulator mandated that all taxis be
fitted with a Cabcharge EFTPOS terminal (with some very
limited exceptions). This requirement further cemented
the position of Cabcharge and the networks in the
provision of non-cash taxi payments. Secondary EFTPOS
providers have been hampered in breaking into the taxi
market by both the Cabcharge/MPTP partnership and by
hardware limitations on taximeters to only interface with
one EFTPOS terminal. 33
In the early 1990s, computer-aided dispatch systems
were introduced, replacing two-way radios and
dramatically altering the dispatch methods of depots. 34
The linking of inbound calls to cars via more sophisticated
booking and dispatch systems further created a
dependence on the emergent networks, as each
individual taxi operator needed the network’s equipment
to access bookings.
Advances in communications infrastructure technologies
led to the digitisation of exchanges, allowing many
organisations to reduce the workforce involved in
answering calls manually. The eventual automation of
incoming calls via the utilisation of Interactive Voice
Recognition (IVR) technologies and more recently internet
bookings is now at the point where more than one third
of bookings received by the two major NSPs are handled
without human involvement.
In effect, the major NSPs have entrenched their positions
over time by consolidating their control over network
services via centralised call centre systems and emergent
EFTPOS technology. In this way, the networks have
ensured a reliable – and profitable – revenue stream
through providing industry infrastructure rather than
providing the actual ‘on the ground’ services.
Competition in the booking and payments markets
has been constrained until relatively recently;
however, improvements in wireless technologies
and the growth in smartphones has started to
open up opportunities for competitors.
11.4. Current regulation of taxi
booking services
11.4.1. Network accreditation
The number of NSPs within an area is not formally
restricted by regulation (other than that NSPs must hold
accreditation). In practice, however, the combination
of zoning, licence conditions and regulatory decisionmaking
has resulted in high NSP concentration and local
monopolies in many country markets. The requirement
for accreditation of NSPs was introduced as part of
the wider industry accreditation scheme in December
2007. In order to be accredited, primary NSPs must
demonstrate that:
• Relevant persons in relation to the organisation are of
good character
• They have the business and financial capability to
effectively carry out their activities
• Systems are in place to provide for the safety of
drivers and passengers
• They record specified information to enable inspection
and audit of their operation
• Systems are in place to ensure that prioritisation of
bookings for wheelchair work
• They have documented disciplinary procedures
for drivers
• A system is in place to ensure that customer
complaints are sufficiently managed and resolved.
The rationale for having to demonstrate business and
financial capability seems questionable and is not clearly
related to safety and other market failure considerations.
Primary NSPs are issued with an accreditation that
applies for a period of five years. The accreditation
enables them to advertise their services to the public and
display branding on the interior and exterior of taxis. The
accreditation is issued applicable to a particular zone
and restrictions apply to the number of taxis that are
permitted to affiliate with the NSP.
33 The issue is canvassed in greater detail in chapter 12
34 See Smith, Jack (1996), Silver Top: the first 60 years, Silver Top Taxi
Service, Melbourne
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