DRIVE NOW July 2022

VICTORIA news
VICTORIAN METRO TAXI
RANK & HAIL
Fare Review
The Essential Services
Commission (ESC) are reviewing
maximum fares for unbooked
taxi services that begin in
the metropolitan and urban
zones, which cover most of
metropolitan Melbourne,
Geelong, Ballarat, Bendigo,
Frankston, Dandenong, and the
Mornington Peninsula.
The ESC released their draft
decision on maximum fares for
unbooked taxis on 1 July 2022.
Their draft decision is to
increase the maximum
fares for unbooked taxi
trips that begin in the
Melbourne metropolitan
or urban and large
regional zones by 10.4 per
cent.
The proposed increase will apply
equally to the tariff components
(flagfall, distance rate and time
rate) for each tariff period.
This is the first fare increase
proposed since 2014 and reflects
recent increases in the costs
of providing unbooked taxi
services.
The new taxi cost index suggests
that the costs of operating
unbooked taxi services have
increased by 10.4 per cent since
the last fare review in 2020. The
main contributors to the 10.4 per
cent increase are:
• fuel costs at 6 per cent -
accounts for the change in
fuel costs
• driver labour at 4.3 per cent:
accounts for the use of the
Fair Work Commission's
annual wage review as a
cost inflator for driver labour
instead of the wage price
index (transport, postal and
warehousing).
The draft decision takes
into account the Victorian
government's recent
amendments to the Commercial
Passenger Vehicle Industry
Act 2017, which gave the
ESC discretion to consider
the Fair Work Commission's
annual wage review and the
commercial viability of operating
a taxi service when setting the
maximum fares.
The ESC proposes to include a
fare adjustment mechanism in
their price determination which,
if needed, would allow maximum
fares to automatically increase or
decrease between fare reviews
without requiring a price review.
The fare adjustment mechanism
will only account for any changes
in fuel prices and next year's
wage review by the Fair Work
Commission.
Taxi driver earnings depend on a
combination of:
• the demand for and supply
of commercial passenger
vehicle services
• the demand for and supply
of taxi drivers
• fares charged
• how revenue is shared
between taxi drivers and
operators, which is currently
at a minimum 55:45 ratio.
14 July 2022