Australian Politics and Policy - Senior, 2019a

Australian Politics and Policy
transport industry. As heavy vehicles cause the most damage to the road network,
a system of user charging has been in place for some time, but it is still some way
from capturing the external costs of road damage. Working with the industry, the
Department of Infrastructure, Regional Development and Cities has implemented
the National Heavy Vehicle Charging Pilot. In the near future, various pricing
options, which might include a reduction in fuel excise and vehicle registration fees,
will be ‘mock billed’ and tested by road transport businesses, with a view to testing
the new system on an opt-in basis paying with ‘real money’. Technology is enabling
such opportunities to improve regulation, but it can introduce new problems for
government–business relations, which we discuss in the next section.
Emerging issues – disruptive influences
The taxi industry in Australia was one of the last regulated monopolies to be
subjected to market liberalisation and disruptive technologies. As late as 2013,
a report on the Victorian taxi industry made no mention of the emerging ridesharing
industry led globally by Uber, a multinational corporation. Ride-sharing
businesses are part of the growing sharing economy, where individuals use their
private assets, such as their cars or their houses (with businesses such as Airbnb),
to sell services using proprietary smartphone ‘apps’ that provide the marketing and
billing systems. While the Australian Capital Territory anticipated ride-sharing and
reformed the taxi industry, the states did not. Allegedly, Uber began operating
throughout Australia despite laws prohibiting unregulated businesses from operating
in the point-to-point transport industry. This presented a complex problem
for the state governments. Consumers wanted to use ride-sharing because it was
cheaper and there was a perceived lack of customer service from the existing regulated
taxi operators. Governments were forced to reform the industry, resulting
in protests from taxi operators, many of whom saw the value of their investment
in taxi licences reduced significantly with little time to adjust to the changing
conditions. State governments were forced to compensate taxi licence owners and
to implement packages to ameliorate the effects of industry disruption. Taxi operatorshavecommencedaclassactionagainstUberseekingfurthercompensation
for lost business.
Unlike the approach adopted with sugar industry, the taxi industry disruption
was almost a complete surprise to regulators and taxi operators alike. This level of
disruption could have been avoided had the reforms been introduced years before,
but neither government nor the industry was prepared. The most striking part of
the introduction of ride-sharing was not so much the advances in technology, but
the way that the technology has been used globally to disrupt traditional industries.
While other jurisdictions have attempted to ban ride-sharing operators, consumer
demands are forcing governments to enable new services, thus challenging the
command and control approach where it matters most – at the ballot box.
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