wulfgar

Couldn't find a cab last night? Here's why

30 posts in this topic

I recall Medved taking quite an interest in the taxi back on GHPC with some input from Steveno. Worthwhile keeping a thread on the economics of the taxi.

http://www.theage.co...0325-1ca66.html

Couldn't find a cab last night? Here's why

Chris Johnston

March 26, 2011

An industry in meltdown.

IN EARLY 2009, 12 Melbourne taxi operators — owners of middling suburban fleets that form the backbone of an industry now in meltdown — held crisis talks.

The chatter was that the Brumby Labor government and its troubled transport minister, Lynne Kosky, had a grand plan to put more taxis on the streets — maybe as many as 500. They wanted to create lucrative taxi licences and sell or lease them, making millions and flooding the streets with cars.

Six months earlier a shirtless mob of Indian taxi drivers halted city traffic, protesting about safety. The media, meanwhile, was reporting a congested, violent CBD, long taxi waiting times for disabled people and how the average poorly paid driver wouldn't know Malvern from Mitcham. The taxi industry was hot, and Kosky's ministry was under pressure.

Mark Longton of SE Taxis in Oakleigh South called the talks. He runs a fleet of 50 cars. Like most, he doesn't own them but leases them under "assignment" from private owners.

He says the operators he summoned to the meeting felt excluded from discussions between the Transport Ministry and state taxi regulator, the Victorian Taxi Directorate, the industry's peak body, the Victorian Taxi Association, and the privatised taxi-baron duopoly of Silvertop and 13Cabs, which own the radio networks and huge fleets of cars.

Longton says there was "a lot of anger and emotion". The operators saw few benefits in the government's taxi licence plan, which came to be called the Greater Melbourne Taxi Release. An economic recession meant fewer corporate and "leisure" customers were using taxis and the addition of more taxis would mean "the big pie we were feeding from was going to get 500 more competitors".

The meeting decided to blockade Melbourne's CBD with 700 taxis, but the operators then baulked, fearing the blockade would work against their cause, Longton says.

The Greater Melbourne Taxi Release went full steam ahead. Two competitive tenders last year sold 530 taxi licences for cars and vans, making the state government the biggest player in an industry that it also regulates.

It created the licences and released them in two ways: either $180,000 up front for a car, lasting 10 years, or $28,550 a year for 10 years for a van. The 10-year lifespan allows the state to do it all again in nine years. It made the state government by far the biggest lessor of taxis in Melbourne and created a massive income stream.

Announcing the scheme, Ms Kosky said it would "reduce waiting times and improve passengers' experience".

The extra licences and cars were supposed to hit the streets this year.

But it hasn't worked. Despite earning the state up to $36million, with more to come, industry observers say a smaller driver pool means the scheme has worsened the existing problems with Melbourne's taxis — drivers with no sense of direction, dirty and mechanically unsound cars, credit card fraud and long waiting times.

The "desperates" willing to drive have to work harder for a decreasing pool of money. Operators have to cut costs still further. As standards fall, demand for taxis also declines. Taxi occupancy rates are at an all-time low of 27 per cent, which means an average taxi is occupied less than a third of the time.

The head of the Victorian Taxi Association, Neil Sach, this week called the scheme a ''disaster'', mainly because the federal government's overhaul of migration laws in February 2010, aimed at Indian students, meant there were fewer people to drive considerably more taxis.

The Saturday Age has established that the scheme was substantially driven by the Brumby Treasury as the global financial crisis gripped in 2008. A well-placed state Labor source said: ''Treasury was hunting for gaps in the last quarter of '08. They saw that revenue from stamp duty might fall and they saw this as a way to plug holes in the budget.

Advertisement: Story continues below

''It was good Treasury logic,'' the source said, ''but not great transport policy.''

The Saturday Age has also learnt:

¦Ms Kosky told a Victorian Taxi Directorate meeting in late 2008 that her hands were tied because of Treasury's enthusiasm for the scheme. Similarly, a small suburban fleet owner involved in discussions with the Victorian Taxi Association was told a year ago: ''At the end of the day, boys, you can argue against it all you like but Treasury wants it, so it will happen.''

¦The VTA commissioned La Trobe University economists to study the plan. They found it would reduce earnings per cab by up to 12 per cent and would lower the capital value of taxi licences by up to 20 per cent. The VTA says it showed the report to the state government.

¦Former commissioner Greg Wilson, who presided over a major Essential Services Commission report on the taxi industry, moved to work with the Brumby inner sanctum as deputy secretary of policy and cabinet in 2008.

¦The state government pays a subsidy on some fares for disabled people so would have to pay more if fares went up. Industry experts link low fares with low standards.

¦Operators who bought the government-issued licences resold them only days later at a profit. This was allowed under the tender agreement. One owner-driver made a $9000 profit on a $180, 000 licence in two days.

¦At least four operators who won licences have returned them to the state government and asked for their $2000 bond back.

¦Of 330 wheelchair-friendly van licences issued, only 70 vans are on the road. Victorian Taxi Directorate general manager Peter Corcoran said more would come ''in the next few months''.

Moorabbin operator Alex Davidson, of Eastmoor Taxis, bought 87 licences for wheelchair-friendly vans. But he doesn't have the drivers to make it work.

The state government pitched the van tender as a boon for disabled people, yet Eastmoor so far has got only 12 on the road. The other 75 licences have not been activated. ''If we can't do it,'' Mr Davidson said, ''we will return them to the government.''

The ill-fated scheme has also shed light on the arcane inner workings of Melbourne's $800 million taxi industry, an under-regulated netherworld where most of the 4500 taxi licences worth $510,000 each on the open market are owned by a few people, including the Silvertop-owning Gange family, one of Australia's richest. Another major player is Sydney-based octogenarian Reg Kermode, the chief executive of Cabcharge, who partially owns Melbourne's 13Cabs and solely owns BlackCabs.

Former New South Wales premier Neville Wran is a Cabcharge director. Last year Cabcharge was fined $14 million after the Australian Competition and Consumer Commission alleged anti-competitive behaviour. The Cabcharge system is used by 95 per cent of Australia's taxis.

As controllers of Melbourne's taxi radio networks, the big depots of Silvertop and 13Cabs also make money from the tenders, at least in the short term. The depots charge operators $550 per car per month for the right to be linked to their call centres, totalling around $1 million each a month just for the extra licences the government created.

Yet even they can see the scheme's flaws. ''The market is flooded with licences with no one to drive them,'' says Andrew Skelton of 13Cabs. ''It was never done for the benefit of the whole industry. We knew that all along.''

This week the Victorian Taxi Association met new state Liberal Transport Minister Terry Mulder with a log of claims, including a fare rise of up to 29 per cent, and to discuss the government's still-embryonic plans to form a Taxi Commission to replace the Victorian Taxi Directorate.

Mr Mulder said the former government had been so focused on other public transport issues that taxis had not got the attention they needed. ''There was no interest in the taxi industry from successive ministers,'' said Mr Mulder, who says improving the industry will be one of his priorities.

He said the industry's problems were deep-rooted because there were so many vested interests. ''From the licence holders right down to where the cabbie actually picks someone up, there are an enormous amount of exchanges involved, and a number of profit extractions. We want to produce a more functional industry.''

Ms Kosky and fellow former Labor transport minister Martin Pakula declined to comment on problems in the industry.

Neil Sach of the Victorian Taxi Association said Labor had argued that more licences were needed because the taxi business had expanded. ''But that was completely wrong. The whole industry saw it as a money-raising exercise.

''The driver out there today at a rank waiting for a fare would say, 'Hang on, I'm here. If there is more demand, I can't see it'.''

Standard taxi licence today: $510,000

Standard taxi licence in 2002: $300,000

Cost of 200 recently released licences lasting for 10 years only: $180,000

Number of taxis in Melbourne (including Frankston and Dandenong): 4700

HOW IT WORKS

Licence holders: May either drive taxi themselves or, more commonly, assign rights to an operator

Operators: Either drive taxis or make arrangements with shift drivers

Drivers: Must be licensed and receive their bookings from network service provider, usually either 13CABS or Silvertop

Network service providers: Charge taxi operators around $550 a month to provide dispatch service, meaning they have vested interest in getting more cars on the road

THE ECONOMICS

Fare takings in a year: $175,000

Running costs in a year:

¦ Vehicle lease $9000

¦ LPG $18,000

¦ Employing either 13CABS or Silvertop $7000

¦ Car maintenance $7000

¦ Cleaning $1300

¦ Tyres $1600

¦ Registration and insurance $8000

¦ Office costs $4000

¦ WorkCover $3100

¦ Licence $37,000

TOTAL $96,000

Source: Victorian Taxi Association

WHAT DRIVERS GET

Typical hourly pay for drivers: Traditionally drivers and operators have split takings 50/50, but it is now estimated that about 40 per cent of Melbourne's taxi drivers instead pay a simple flat rate of around $1600 a week to a taxi operator, for use of the cab.

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People in general have better things to do than to work for slave wages. Every industry is affected.

Edited by sydney3000

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Imagine what price fares would really be if customers weren't paying off a 500,000 license/government tax. Our taxi's are ridiculously expensive. I really liked the quote of

"Licence holders: May either drive taxi themselves or, more commonly, assign rights to an operator" - this certainly didn't used to be the case.

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Imagine what price fares would really be if customers weren't paying off a 500,000 license/government tax. Our taxi's are ridiculously expensive. I really liked the quote of

"Licence holders: May either drive taxi themselves or, more commonly, assign rights to an operator" - this certainly didn't used to be the case.

Licence $37,000 per annum. So about $1.05 in $5 you pay is for the license.

$45,000 for total vehicle costs, or $1.30 in $5 is vehicle costs.

40 cents in $5 for other costs.

So $2.75 in $5 for costs and $2.25 to the license holder and drivers.

The $80,000 PA of take after costs has to cover a living wage for two drivers and a cut for the license holder.

I don't think it would be quite as easy to lower costs as you imagine.

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Licence $37,000 per annum. So about $1.05 in $5 you pay is for the license.

$45,000 for total vehicle costs, or $1.30 in $5 is vehicle costs.

40 cents in $5 for other costs.

So $2.75 in $5 for costs and $2.25 to the license holder and drivers.

The $80,000 PA of take after costs has to cover a living wage for two drivers and a cut for the license holder.

I don't think it would be quite as easy to lower costs as you imagine.

Wouldn't a start being to make it a freer market.

At least they have kind of started doing that by allowing pre-booked hire cars which have been undercutting taxis.

If the numbers shown are accurate the owners of those taxis don't appear to be getting a good return. At $1600 a week flat rate they seem to be losing money.

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Wouldn't a start being to make it a freer market.

At least they have kind of started doing that by allowing pre-booked hire cars which have been undercutting taxis.

If the numbers shown are accurate the owners of those taxis don't appear to be getting a good return. At $1600 a week flat rate they seem to be losing money.

Something left out in the costs is the GST. 10% of fare takings or $17,500. It's said the GST sent a lot of good drivers out of the industry.

The $1600 wouldn't include fuel.

$96,000 pa less $18,000 LPG = $88,000

1600 x 52 = 83200

The takings are perhaps $90,000 after this. GST after tax credits $9,000, fuel $18,000, that leaves $63,000 pa for the drivers and there maybe some other costs to cover.

Maybe Steveno can correct the fine points since he's worked as a taxi driver.

A good reason things are so expensive is the gubberment and the high cost of financials, otherwise known as the bankerment.

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Something left out in the costs is the GST. 10% of fare takings or $17,500. It's said the GST sent a lot of good drivers out of the industry.

The $1600 wouldn't include fuel.

$96,000 pa less $18,000 LPG = $88,000

1600 x 52 = 83200

The takings are perhaps $90,000 after this. GST after tax credits $9,000, fuel $18,000, that leaves $63,000 pa for the drivers and there maybe some other costs to cover.

Maybe Steveno can correct the fine points since he's worked as a taxi driver.

A good reason things are so expensive is the gubberment and the high cost of financials, otherwise known as the bankerment.

So does that mean a $5,000 profit on a $500,000 asset? They really should introduce a FTBG.

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So does that mean a $5,000 profit on a $500,000 asset? They really should introduce a FTBG.

The price they put on the taxi license plate is $37,000 PA. Maybe they work its value on what 500k would pay on a term deposit.

500k buys you a permanent license plate, so it is a question of what 500k invested is worth. If rates fall then the value of the plate annually falls.

Edited by wulfgar

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I think like most things government wise it is ludicrous that over and above licensing which granted should be a thorough and rigorous process. This licensing priocess perhapos has some costs clawed back by government. Over and above this there should be no ownership of somethign like a taxi license which is nothing more than a contrived way of giving someone ownership of something they should not really have.

It is not like a lobster fishing license designed to keep a certain catch. I mean what is the sustainable fishery here, punters who want to get home from work?

The only people you are talking about being robbed here are the owners of the original taxi lecenses who now see competition in the form of 550 new government licenses. if they cannot get drivers to work for less pay then they might have to take less cut. Why should they get any cut of something which is just a piece of paper from government which allows them to own a taxi?

So the value of the plate falls if more are issued. I think that is a good thing.

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So the value of the plate falls if more are issued. I think that is a good thing.

It's more than that. The government is running a monopoly. If you don't buy one of their licenses they'll line up the guns against you. The parliaments ignore the law on a regular basis:

Monopolies - http://www.austlii.e...1980240/s8.html

(5) And be it declared and enacted by authority of the present parliament,

That all monopolies, and all commissions, grants, licences, charters and

letters patents heretofore made or granted, or hereafter to be made or

granted, to any person or persons, bodies politick or corporate whatsoever, of

or for the sole buying, selling, making, working or using of any thing within

this realm, or the dominion of Wales.

(6) Or of any other monopolies, or of power, liberty to faculty, to dispense

with any others, or to give licence or toleration to do, use or exercise any

thing against the tenor or purport of any law or statute.

(7) Or to give or make any warrant for any such dispensation, licence or

toleration to be had or made; or to agree or compound with any others for any

penalty or foreitures limited by any statute; or of any grant or promise of

the benefit, profit or commodity of any forfeiture, penalty or sum of money,

that is or shall be due by any statute, before judgement thereupon had.

( 8 ) And all proclamations, inhibitions, restraints, warrants of assistance,

and all other matters and things whatsoever, any way tending to the

instituting, erecting, strengthening, furthering or countenancing of the same

or any of them.

(9) Are altogether contrary to the laws of this realm, and so are and shall be

utterly void and of none effect, and in no wise to be put in use or execution.

It could also constitute cartel conduct:

Cartel Conduct - http://www.comlaw.go...lume_1#param314

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I agree the issue of licenses restricted so that a profit is can be made is scandalous to begin with but if they are releasing many more surely that is a good thing?

The government issuing licenses should be a case of do you have the qualifications. Then Show us your car, Then pay $20,000.00 say for enforcement, then here is your license good luck on the road.

Thats it. no restrictions other than the criteria to have a decent taxi driver and taxi itself.

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Number of taxis in Melbourne (including Frankston and Dandenong): 4700

Not really a great deal on the road. They all hover in and around the CBD where the clients will pay that much.

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Not really a great deal on the road. They all hover in and around the CBD where the clients will pay that much.

Shall we include that the reason for many people taking a taxi is the lack of public transport. Who controls public transport? Now there is a conspiracy theory.

Rant continued:

Will all those people lamenting the carbon cost of outer suburban bogans please pay their fair share of the increased house prices back to additional infrastructure to those in the outer suburbs.

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Shall we include that the reason for many people taking a taxi is the lack of public transport. Who controls public transport? Now there is a conspiracy theory.

Well Medved's argument is taxi travel could be much more affordable for the average person and in fact should be an alternative to other types of public transport.

The GST was a killer, a tax I've always opposed.

The GST is a on tax efficiency measures, why should things like taxi's and take away meals be heavily taxed.......are these things really luxuries?

The Federal government put it's hand in the pie and sucks out 17,500 pa on the average taxi. The government has taken the wages of a part time driver in on fell swoop.

Going by the number of taxi's in Melbourne, the sector would employ perhaps 25,000. Melbourne would have have about 2 million full time and part time employee's. So about 1 in 80 of the workforce would be employee in the taxi. The elite rulers are happy with the current state because the taxi service is there for them, but they don't want labor expended on taxi's for Joe Average.

There's the conspiracy.

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Medved's old favorite makes the news again.

Taxi drivers stage mock funeral

Date November 28, 2012 - 12:03PM

Adam Carey A convoy of up to 200 taxis is converging on Parliament House in a mock funeral procession at noon in protest against proposed industry reforms they say will bankrupt small business owners.

The protesters, members of the state's multibillion-dollar taxi industry, will attempt to hand Premier Ted Baillieu a funeral wreath and ask him to sign a card that reads: "As Premier, I offer my condolences on the imminent death of small business in Victoria should this government adopt the Fels report into the taxi industry in its entirety, especially the unnecessary devaluation of existing taxi licenses, with no form of compensation, effectively killing off as many as 3000 small businesses in this state.”

Many of the taxi drivers who have joined today's convoy are being paid $50 to be there.

Harry Katsiabanis, spokesman for protest organisers Taxi Industry Stakeholders Victoria, said it was fair to pay ordinary drivers to protest because they were forgoing income.

Advertisement "These guys make $8 an hour. It's unfair for them not to make any money, so they are being compensated," Mr Katsiabanis said.

The Victorian taxi industry is on the cusp of almost unprecedented industry reform. A 15-month inquiry by Professor Allan Fels, the former head of the Australian Competition and Consumer Commission, proposed 145 reforms and innovations in a bid to raise the service standards of Victoria's oft-maligned taxis.

The Baillieu government has until December 12 to respond to the final version of Professor Fels' report, which has not been made public but is believed to closely resemble the draft version.

The industry says many of the report's recommendations are fair but is fiercely opposed to two key reform proposals – reducing the value of taxi licences and ditching the requirement for operators to affiliate with a booking network.

Mr Katsiabanis, who owns a taxi depot and a number of licences, said the Victorian taxi industry was mostly made up of small business owners, not "mega-wealthy taxi tsars".

"There are 10 people in Victoria who own 10 or more taxi licences. Most of the rest own one or two," Mr Katsiabanis said. "We're not talking about Kerry Packer here, we're talking mums and dads who work to put their kids through school."

Taxi licence values have ballooned beyond $500,000, but have recently declined towards $400,000.

But Professor Fels said the taxi industry "needs to put the interests of customers first, not those of networks, licence holders, brokers and others".

"Otherwise the Victorian public will continue to get poor service," Professor Fels said. "The protest shows that unlike the Victorian public, the leaders of the taxi industry still don't get it – the industry needs major reform."

In a report commissioned by industry group the Victorian Taxi Association, a leading analyst of Australia's taxi industries has lashed out at Professor Fels' reform ideas as fanciful, predicting they would impose economic hardship on drivers and clog city streets with prowling cabs.

Professor Des Nicholls, an economist at the Australian National University, said decisions to boost the number of taxis in Victoria should be based on hard data about the level of public demand for them, not a theoretical conviction that there is "latent demand".

"There is no evidence there's latent demand that's untapped," Professor Nicholls said. "Every overseas study shows if you massively increase the supply of taxis, the demand doesn't keep up. So if you increase the supply by 15 per cent, you need the demand to increase more than that. And it's not going to happen."

Professor Nicholls predicts there will be "an extended period of chaos and turbulence" if the Baillieu government adopts in full the report's recommendations.

He said the Victorian government already had all the data it needed to make an informed decision about how many taxis Melbourne needs, if only it used the booking data of networks 13Cabs and Silver Top. The network duopoly has data on every meter activation in the city, and the time between bookings and pick-ups, both of which could be used by the government regulator to chart changes in supply and demand.

He said this was one good reason to maintain the requirement to affiliate with a booking network, the other being to prevent unaffiliated drivers from congregating at the airport and major cab ranks or cruising the streets in search of fares.

However, the regulator, the Victorian Taxi Directorate, does not currently collect this data. It uses a public interest test to make decisions on releasing new taxi licences.

Professor Allan Fels said the regulator had failed for years to break the industry's self-interested stranglehold on the allocation of taxi licences. "The Victorian public is ill-served unless there is a clean break with industry and its pressure to restrict the number of taxi licences," Professor Fels said.

Suggestions the streets would be flooded with cabs were alarmist, he said. "Ours is a balanced, even compromised approach, because a licence will cost $20,000 a year for five years. That will kill off any irrational entry."

A spokesman for the City of Melbourne said that if the number of taxis on the city streets grew, they would work to ensure the increased traffic at major cab ranks was well managed.

Read more: http://www.theage.co...l#ixzz2DTiEuEsh

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Taxi licence values have ballooned beyond $500,000, but have recently declined towards $400,000.

Artificial scarcity. Medved-style deregulation would mean those licenses are worth nada.

Note that only about 10 people own more than one or two licenses. Policy and regulation is (or has been) dictated by vested interests. The public pays more than they should and smaller operators are squeezed out. It would have to be one of the most corrupt industries in Australia.

I'll be interested to read the recommendations but would find it hard to fathom the gubment would devalue taxi licenses.

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These guys make $8 an hour. It's unfair for them not to make any money, so they are being compensated," Mr Katsiabanis said.

You what?! That is about 16K per year! That has to be wrong.

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Artificial scarcity. Medved-style deregulation would mean those licenses are worth nada.

Note that only about 10 people own more than one or two licenses. Policy and regulation is (or has been) dictated by vested interests. The public pays more than they should and smaller operators are squeezed out. It would have to be one of the most corrupt industries in Australia.

I'll be interested to read the recommendations but would find it hard to fathom the gubment would devalue taxi licenses.

Fixed it so that you could be talking about pretty much Australia full stop.

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You what?! That is about 16K per year! That has to be wrong.

No, it's about right after costs. The trick is to work 72 hours a week. A taxi is shared between 2 drivers or more in some cases.

Look earlier in the thread for cost estimates.

But we need more Indians because $8 an hour is way too much!laugh.gif/>

Let's say a taxi works 144 hrs a week. Typical take would be $1800 a week at best. The taxi license has to be paid, vehicle and running cost and 2 drivers to keep.

Edited by wulfgar

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It's all about artificial scarcity... look at the rentiers and gubment squirm...

http://www.abc.net.a...852?section=vic

Calls for radical overhaul of Victoria's taxi system

An inquiry into Victoria's taxi system has recommended sweeping changes to the way drivers are trained and also proposes new measures to put more taxis on the roads.

The final report of the 16-month inquiry, headed by Professor Allan Fels, was tabled in Parliament today.

It calls for cheaper taxi licences and wants them to be easier to obtain.

But the Victorian taxi industry has urged the State Government to ignore the key findings.

David Samuel from the Victorian Taxi Association says making licences cheaper, would flood the market.

He says it would also make owing or driving a car less lucrative.

"We want sustainable reform to our industry and we've been calling for that for a number of years," he said.

Professor Fels has also called for drivers to undergo London-style knowledge tests.

He says the industry needs major reforms, and only implementing some of his recommendations would be a missed opportunity.

"You cannot have the other reforms without doing something about licencing, that gets more competition and it creates room to, in effect, pay for the reforms," he said.

The State Government says it will consult further before responding to the recommendations.

Transport Minister Terry Mulder says the Government will consider whether to compensate licence holders, if the reforms go ahead.

"There is some concern, as I say, in relation to licence values. Those matters will be considered when the Government does respond," he said.

"There's a short period now, up until the 30th of January, for additional information to be given to assist us with our final response."

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It's all about artificial scarcity... look at the rentiers and gubment squirm...

Well they have to get their money back before the driver-less cars render their industry on a par with the hansom cab.

Disclaimer: I am really excited by the thought of a cheap chauffeur and the logical extensions of all the cars talking to each other.

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You what?! That is about 16K per year! That has to be wrong.

Last taxi I was in (2 weeks ago?) the driver told me he made $60 for a 6 hour shift. So its wrong, but its not that wrong.

Whats really wrong is taxi plate owners paying drivers to strike in order to perpetuate the plate owners asset value, preventing drivers ever being able to owner operate on the amounts they earn (this was the context of the $8/hr quote fromt he original story)

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The retired taxi driver assigns his licence to another operator for $26,000 a year. Mr Korolik, who came from Russia ''with $10 in my pocket'', paid $35,000 for his licence in 1983 and drove a cab for three decades. In his view, an industry built up by many hard-working migrants has been unfairly attacked. ''The government found an easy target - the taxi industry.''

Interesting, worth 465k, he claims he rents the license for $26,000 pa. That 5.6% earnings pa. Note that the price of a license seems to have followed the price of the median house. The gross earnings of a license are in the region of 180k pa. The profits from that must provide license earnings and the income of two full time drivers or the equivalent.

Secret world of our taxi titans

Date January 5, 2013

Adam Carey

0501taxis-300x0.jpg VICTORIA'S taxi industry is dominated by a few major taxi licence owners, the largest of whom have obscured the full extent of their wealth by listing their holdings under a string of different names.

There are 5250 taxi licences in Victoria - valued at about $480,000 each - yet just eight businesses own more than 10 licences.

The full list of licence owners - never before revealed but seen by The Saturday Age - shows an industry controlled by a small school of big fish, with intricately intertwined business interests.

They are: the Gange Corporation, owners of Silver Top Taxis; Cabcharge, which owns 13Cabs; the Granger family, which is linked to Silver Top and 13Cabs; John Vlassopoulos, who owns Ambassador Taxis; Jim Dendrinos of Bayside Taxis; the Shehata family of ECM Taxi Brokers; Phillip Humphreys, who is linked to Silver Top; and Murrell Enterprises, which dominates Geelong's taxi industry.

Advertisement Swimming around them are hundreds of smaller fish who own between one and 10 licences. Some of them are owner-drivers who hit the road every day to make a living. Some licences serve as investment funds for small collectives that effectively have no active involvement in the industry.

Together, big and small, these are the people who own Victoria's taxi industry, and who are fighting a desperate rearguard action to fend off reforms being considered by the Baillieu government, which they argue will trash what they have spent their lives labouring for.

The Gange Corporation, directed by brothers Kevin, John and Alf Gange, is easily the largest operator in Victoria's taxi industry, with almost 120 licences held under different names. Fifty-five are registered under the name of defunct taxi company Astoria, 41 in the name A. Gange, 10 in the name Littles and 12 to Silver Top Taxis.

The Gange Corporation also owns Silver Top, which together with 13Cabs has cornered the lucrative taxi booking business, taking a $7000 annual network affiliation fee from almost every working cab in Melbourne.

13Cabs is owned by Cabcharge, which also owns 24 taxi licences under the name Black Cabs, and six under the name Arrow Taxi Services.

Cabcharge is also linked with the Granger family, a veteran

player in Victoria's taxi industry, which owns 24 licences. The late Noel Granger, a 1956 Olympian, acquired his licences in the early 1960s, and was chairman of Silver Top Taxis from 1993 to 2003, before it was bought by the Gange family. Granger Transport also owns more than 5000 shares in Cabcharge, a 0.5 per cent stake.

These are among the old guard of Victoria's taxi industry. Other newer entrants have also amassed large licence holdings. John Vlassopoulos owns 31 taxi licences as well as the Ambassador taxi brokerage and driver training school in North Melbourne.

Jim Dendrinos of Bayside Taxis, a depot in Cheltenham, owns 18 licences. The Shehata family also owns 18 licences. Michael Shehata bought his first taxi licence in the late 1980s, paying about $100,000 to start his own taxi business. Over time he bought ''one after the other'', he said.

Metropolitan taxi licences were trading at $515,000 a year ago, putting the value of Mr Shehata's investment at more than $9 million.

But he insists that he is not wealthy and in fact cannot contemplate retirement, even though he is in his 70s.

Mr Shehata, who emigrated from Egypt 50 years ago, still runs a taxi business in Reservoir, not far from his home in working-class Thomastown in Melbourne's north.

He says he borrowed to grow his taxi business, to ensure a livelihood for his wife and five children, all of whom are in the business.

''That's what makes me borrow all this money and to make the business, because I don't like my kids to be on the dole, because I myself didn't take one cent in my life from the dole or from the government,'' Mr Shehata said.

''And I like my kids to be the same, to depend on themselves and to work hard and survive. That's why we make this a family business.''

The Baillieu government has been handed an extensive list of reform recommendations for the industry, following an 18-month-long industry inquiry chaired by former Australian Competition and Consumer Commission head Professor Allan Fels. Professor Fels has put forward a stridently free-market formula for overhauling an industry many feel provides unacceptably poor customer service.

The single most contentious recommendation of the inquiry's 271-page final report is the call to remove restrictions on licence numbers, and to lower their price to $20,000 a year over five years.

Professor Fels argues this would break existing licence holders' stranglehold on the industry and increase the number of cabs on the street. Under his reform model, licences could be rented out at $20,000 a year, a drop from the current annual rate of about $30,000.

Currently only the state government can issue new licences, and does so according to a ''public interest'' test. In the inquiry's view, these restrictions have pushed up licence values unreasonably, turning them into cash cows for investors with little or no stake in service quality or driver welfare.

Attempts to speak to Silver Top managing director Kevin Gange were unsuccessful. Also president of the Victorian Taxi Association, he evidently prefers to let the industry group speak on his behalf and has not been interviewed in years. The association's council membership is mostly drawn from Silver Top and 13Cabs.

Association spokesman David Samuel insists the association does not work to serve the interests of licence holders. ''The VTA constitution is explicit that it does not protect the interests of licence holders, because what we didn't want to be doing was propping up the value of the licence, it's not our role as we see it,'' Mr Samuel said

But the Victorian Taxi Association is not the only industry voice that has campaigned against the Fels reform blueprint. John Vlassopoulos is president of Taxi Industry Stakeholders Victoria, a collection of owners and operators who formed a new lobby group last year. The group's spokesman, Harry Katsiabanis, who is himself a multiple licence owner, and Professor Fels have clashed in the media in recent weeks over the best way forward for the industry.

''How would Professor Fels feel if someone told him they were going to take away everything he'd worked for?'' Mr Katsiabanis said.

The public has until January 30 to respond to the Fels report and the government is expected to make its own response in April. The extreme apprehension within the industry appears to have had a depressing effect on licence values.

In November, seven licences were traded for $350,000, down 28 per cent from $480,000 in October.

Professor Fels said licence values must drop to encourage new people into the industry and improve the working conditions of taxi drivers, who are among society's lowest-paid workers.

A taxi driver who has followed the Fels inquiry closely since it began said Victoria's taxi industry was dominated by an entrenched cabal that consistently fought to lock new competitors out.

''Every time you open a closet you find the same five people in there,'' he said.

But Professor Fels effectively conceded when he handed in his final report in September that small-time licence owners risked taking a heavy financial blow under his reforms.

Single licence owner Yakov Korolik, 72, said he would be financially stricken by a plunge in licence values. He considers his licence to be his ''superannuation''.

The retired taxi driver assigns his licence to another operator for $26,000 a year. Mr Korolik, who came from Russia ''with $10 in my pocket'', paid $35,000 for his licence in 1983 and drove a cab for three decades. In his view, an industry built up by many hard-working migrants has been unfairly attacked. ''The government found an easy target - the taxi industry.''

Read more: http://www.theage.com.au/victoria/secret-world-of-our-taxi-titans-20130104-2c91y.html#ixzz2H2I1olYj

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The vested interest monopolies, oligopolies and cartels can whine as much as they like but when the government is out of money they will look for more and on occasion it hits up the rich for a contribution. In the same way the licences should be rented from the government all property should be rented from the government. You don't have a basis for a nation if the assets within the nation are held by a select few citizens or even non-citizens.

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oh jesus sydney, i dont know what scares me more, vested -opolies, or your marxist ideal. I spose the same goes for tow trucks, i was looking at the idea of buying one, and found out there are only so many liscences, and as a driver ownere you just work for the guy who has one. never self employed, bbut as a contractor.

another thumb in the eye of free markets that our australia is sposed to hold so dear.

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