Wednesday, 16 September 2015
I rise this evening to speak on Uber, the ride-share app that is challenging the current position of the taxi industry, particularly in Queensland. Uber Technologies Incorporated is an American international transportation network company that uses an application, or an app, that a consumer can download and use on their mobile phone. Uber is a digital disrupter that is currently avoiding Commonwealth and state laws. Uber may be popular amongst users, but it is a villain to Queensland taxi drivers, regulators, employment law and government revenue. Even some UberX drivers are now realising how little money they are making—approximately $10.70 an hour once all operating and self-employment costs are taken into account.
Uber—in particular UberX—do not use professional drivers, nor do they use a modified, commercially insured vehicles. Currently in Queensland, it is the Department of Transport and Main Roads that decides who can drive whom around and who administers the law that governs the licences for drivers. In my home state of Queensland, Uber is illegal under the Transport Operations (Passenger Transport) Regulation 2005 in Queensland, which requires a person to have authorisation to operate a public passenger vehicle providing public passenger service.
The previous LNP government issued a cease and desist order to Uber. Between June 2014 and June 2015, Uber drivers in Queensland have received more than $1.7 million in fines. Yet we see Uber continue to grow in popularity, in particular with young consumers and drivers who own late-model vehicles and who are in search of extra income.
As you know, Mr Acting Deputy President, the coalition government believes in enterprise and small business. That is why I find this issue a particularly vexing one. On one hand, I applaud the entrepreneurial spirit of Uber and those seeking to make public transport more efficient and user friendly. But at the same time, I feel for small businesses—the mum-and-dad business taxi owners who have bought a legitimate and legal taxi licence that costs on average $390,000 in my home state of Queensland.
Currently, there are 3,264 cabs in service across Queensland. These cabs are owned by more than 2,800 owners. More than 1,200 companies are taxi operators, while the industry employs more than 15,000 drivers. Around 48 per cent of all these licences in Queensland are held by small operators with fewer than five taxis.
Taxi service licences in a geographical area are sold by competitive tender by the state government. These licences may then be bought and sold as assets. The cost of these licences varies due to the geographical area in which they operate. Furthermore, there are overheads which do not apply to Uber but which apply to taxis before they can operate. These include taxi service licences and accreditations.
Unlike Uber taxis must serve passengers in sequential order, either in terms of when their phone or their app booking is received or where they are in a taxi rank queue. Exceptions are made for wheelchair-accessible taxis, as they must give priority to passengers in a wheelchair or on a mobility scooter. Cabs must also be no more than six years old, or eight years old for a wheelchair-accessible vehicle, and they must have a taximeter installed. Drivers must also provide itemised receipts on request and must accept all methods of electronic payment. They must hold open licences for more than 12 months; pass daily criminal history checks and obtain a medical certificate for motor vehicle driving. They must also pass a national minimum English standards assessment and complete a driver-training course. Every vehicle must have a six-monthly inspection and a subsequent certificate of inspection.
Uber drivers do not have these overheads and regulations, creating an unfair advantage. Their drivers are not required to have a blood alcohol level of zero when driving customers, they do not have to have safeguards for the consumer and a driver is not under any obligation to ensure that they are not fatigued.
Various states and territories have placed obligations and levies on the taxi industry, especially in the area of passenger safety. Members of the Queensland taxi industry must pay a security levy to the state government to address antisocial behaviour at taxi ranks on weekend nights. Other mandated safety costs require every taxi to have three GPS locators installed and an approved security camera system that is installed and operational. Additionally, one of the GPS locaters must be contained within the security camera and be able to withstand high temperatures in case the taxi is ever incinerated. This ensures that any footage and GPS data can still be accessed. These safety features further add to the costs of the service obligations placed on the industry.
I acknowledge that Uber falls under state and territory jurisdictions with regards to passenger transportation laws. I also acknowledge that these laws may vary from jurisdiction to jurisdiction. I understand that the ACT and Western Australian governments have offered a strong indication that Uber is likely to be able to operate after an innovative industry review. I am also advised that Victoria has taken steps to accommodate Uber into its existing regulatory regime, although the service remains illegal. And south of the Tweed, the New South Wales government has announced the launch of an independent task force to examine the future sustainability of taxis, hire cars and other emerging point-to-point transport providers, including ride-sharing models. The task force will also examine the possible impact of any regulatory changes on existing investors and, if necessary, will make recommendations on a possible adjustment package. With some states and territories looking to legalise Uber, it is clear that a national consensus will not be reached. Whilst regulating Uber is of course necessary to maintain public safety and to ensure that Uber and its drivers meet their tax and other obligations, removal of constricting layers of red tape is necessary to enable the small business operators to survive in an ever-competitive market.
Uber is a multinational business based in California, with a value of over US$51 billion. It claims that it does not employ drivers but simply 'partners' with drivers. In geographical areas with over 10,000 people, service contracts for taxis exist between the state and booking companies. All vehicles in the geographical areas are required to be associated with a specific booking company. In Brisbane, this includes Black & White Cabs and Yellow Cabs. Booking companies are obliged by law to provide a universal service. This means that they are required to have a specific number of taxis on the road, spread across a geographical area.
Taxis are required by law not to discriminate. They are to provide services for the disabled and must undertake school pick-ups, compared to UberX, which only takes those who download the app. Booking companies are required to take bookings by telephone as well as electronic means. Unlike Uber taxi call centres employ people, compared to a swipe on a mobile screen.
Maximum fares for taxis are gazetted. There is no maximum gazetted fare for Uber. Surge pricing during peak usage can see users paying three times or more than the usual fare. Taxi fares may be paid using a variety of means, predominantly cash or card, whereas Uber patrons register their credit cards using the app before utilising the service, with the final transaction occurring overseas.
In May 2015 the ATO declared that Uber drivers needed to register for GST from 1 August or face appropriate consequences. It is my understanding that a legal challenge is underway against the ATO in the Federal Court. As noted previously, the billing for an Uber transaction occurs overseas at three per cent tax in Singapore. One can only assume how much, or how little, income tax is paid by Uber in Australia.
To date, the Queensland government has not undertaken a review of ride-sharing services or pointed towards reform in this area. However, Queensland's taxi strategy expires at the end of 2015. What is clear is that a dual approach is required. A number of states are moving to legalise and regulate ride-sharing apps. I call on the Queensland Labor government to even the ledger and to look at strategies that even-up the playing field so that everyone gets a fair go. The taxi industry is an integral part of the wider public transport network, and plays a vital role for the sick, the elderly, the disabled and those who live in areas not serviced by traditional public transport.
They are very good examples of deregulation of the taxi industry internationally, with varying degrees of standards implemented and with benefits for both the taxi industry and consumers. For example, our New Zealand neighbours removed quantitative restrictions on the number of taxi licences in 1989. After deregulation, the number of taxis increased substantially, like in other deregulated markets. The New Zealand experience demonstrates that deregulation or the removal of quantity and price controls with appropriate introduction of quality standards can bring about a restructuring of the industry in a way that benefits both consumers and suppliers alike. A fair go for all is all that I ask for. While competition is desirable in any market, it must occur on a level playing field where all participants are subject to the same market entry requirements.