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

The inquiry considers that there is a need to rationalise
existing government regulation in relation to taxi networks
and work to achieve a much more effective balance
between industry self-regulation, government regulation
and competition. The DOT appears to share this view
although it is also concerned that there are underlying
weaknesses with self-regulation.
Fundamentally, it is DOT’s view that the accreditation
schemes have been unable to significantly influence
the motivations of industry participants because the
underlying regulatory structure remains in place. As
with previous legislative reforms in the sector, the
accreditation regimes have simply layered new rules
on to a regulatory model which has changed little
since the 1930s. 42
Significantly, the VTA is also highly critical of accreditation
arrangements and in discussions with the inquiry has
proposed an alternative structure where responsibility for
managing quality services is the domain of networks and
not the regulator.
The inquiry is sympathetic to the view that the industry
should be primarily responsible for service performance,
though it has some qualifications to this view:
• NSPs must have legal responsibility for the adequate
performance of services provided under their brands.
Without affecting any responsibility that operators and
drivers have, it is considered that NSPs should be
covered by the consumer guarantee provisions of the
Australian Consumer Law (see case study).
• NSPs should actively monitor the performance of
their operators and drivers to ensure they adhere to
appropriate standards.
• NSPs need to implement customer complaint
handling procedures that are in line with
approved standards.
• Procedures and remedies should be put in place to
discipline operators and drivers who fail to adhere to
appropriate standards. These procedures need to
adhere to natural justice principles. They should include
provisions to suspend an operator and/or driver from
the network for an appropriate period of time.
• Regular reports on service delivery should be
provided to the regulator and the regulator needs to
have powers to audit these reports as required.
• NSPs and the regulator need to work collaboratively
to ensure industry-wide sanctions can be imposed on
persistent offenders.
• Safety considerations must be of paramount
consideration for the regulator and to its industry
monitoring and enforcement efforts need to focus
particularly on this.
Despite claims by the VTA to the contrary, the power to
discipline operators and drivers was not taken away from
them. NSPs continue to have the ability to seek liquidated
damages from drivers and operators in relation to poor
service performance and to impose penalties where
these do not conflict with the general law. NSPs have
argued that they do not have the capacity to adopt an
even more effective measure, which would be to suspend
a poor performer from the network for an appropriate
period of time. It was suggested to the inquiry that this
would involve a restraint of trade. However this matter
was clarified by the Federal Court as far back as 2000. 43
As long as the sanction imposed is arrived at fairly and
honestly and the sanction is necessary to protect the
NSPs interests, an NSP can take this action.
It seems the NSPs have felt compromised in taking action
against drivers who have not performed adequately.
To take a driver off the system would also potentially
adversely affect operators who are the main source of
income for the NSPs. Far from being a negative, however,
the inquiry considers this would be a good thing as it
would reinforce the incentives of operators, as well as the
NSPs, to ensure drivers did the right things.
The inquiry considers that it is essential to have a clear
understanding of the respective responsibilities of NSPs
and the regulator so that unnecessary duplication of
roles is avoided and a more co-operative approach
to regulation is achieved. Where possible, regulation
imposed on NSPs should be outcome-based and avoid
unnecessary prescription, which characterises the current
regulation. To this end detailed discussions with the
VTA have been held covering a large number of matters
including the following:
Fares
• Fare refusal
• Short fare
• Refuse WAT work
• Bookings
Driver appearance
• Driver identification
• No uniform
• Hygiene
42 Department of Transport, Submission to the Taxi Industry Inquiry
SS168, p.21
43 Aerial Taxi-Cabs Co-op Society Ltd/as Canberra Cabs v Lee, FCA,
1628, 2000
Understanding industry performance CUSTOMERS FIRST 235