Rural Taxi Industry

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A Discussion Paper on the Rural Taxi Industry in New South Wales

Department of Transport

May 2001


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Table of ContentsAbbreviationsList of Tables

1. Introduction 11.1 Background 11.2 Aims and Objectives 11.3 Methodology 21.4 Structure of Report 3

2. An Overview of the Taxi Industry in Rural New South Wales 42.1 Structure 4

2.1.1 Taxi Licences 82.1.2 Taxi Networks 92.1.3 Taxi Drivers 10

2.2 Market Characteristics 102.3 Costs 112.4 Regulation 112.5 Differentiating between the Rural and Metropolitan Taxi Industry 142.6 Country Taxi Operators Association 153. Regulation and the Rural Taxi Industry 16

3.1 Introduction 163.2 Advantages/Disadvantages of Local Councils Regulating the Rural Taxi Industry 173.3 Who Should Regulate the Rural Taxi Industry? 18

4. Identification of Other Issues for Discussion 204.1 Supply and Distribution of Taxi Licences 204.2 Costs of Running a Taxi Business 214.3 Relationships with Other Transport Service Providers 224.4 Other Concerns 255. Options for Reform 26

5.1 Relationships with Other Transport Service Providers 265.1.1 Integrated Transport Provision in Rural NSW 265.1.2 Regulating Community Transport and Courtesy Buses 27

5.2 Supply of Taxi Licences 285.2.1 Information Needs 285.2.2 Demand for Taxi Services in Rural NSW 29


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5.3 Reducing Industry Costs 305.3.1 Advertising 305.3.2 Other Costs 31

5.4 Service from the Department of Transport 315.4.1 Appointed Contacts 315.4.2 Networking 32

6. Conclusion 32Bibliography 34Appendix 1: List of Organisations Consulted 35


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Abbreviations

ACCC Australian Competition and Consumer Commission

CTOA Country Taxi Operators Association

Department Department of Transport

HACC Home and Community Care

IPART Independent Pricing and Regulatory Tribunal

LPG Liquefied Petroleum Gas

MTD Metropolitan Transport District

NSW New South Wales

RTA Roads and Traffic Authority

TAC Taxi Advisory Committee

TTSS Taxi Transport Subsidy Scheme

TWU Transport Workers Union

WAT Wheelchair Accessible Taxi


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List of Tables

Table 1 Type and Distribution of Taxi Licences in Rural NSW

Table 2 Type and Distribution of Taxi Licences in Newcastle and Wollongong

Table 3 Concentration of Taxi Licences across Rural NSW

Table 4 Average Operating Costs of a Single Taxi in Rural NSW in 2000

Table 5 Summary of Taxi Regulation in NSW


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Section 1: Introduction

1.1 Background

In 1995 the Federal and State Governments of Australia made a commitment to amicroeconomic reform agenda to enable the establishment of common competition laws. TheGovernment of New South Wales made a commitment to reviewing all existing legislation thatrestricts competition in the marketplace prior to 2000. As part of this process, the Premier askedthe Independent Pricing and Regulatory Review Tribunal (IPART) to review the regulation ofthe taxi and hire car industries under the Passenger Transport Act 1990.

IPART commenced the review in October 1998 with the publication of an issues paperexplaining the process of the review and highlighting the key issues to be considered.Submissions were subsequently invited from interested parties and public hearings took placeleading to the publication of an interim report in August 1999. Following discussion andcomment on the interim report, a final report was published in November 1999.

After due consideration by the Government, the Minister for Transport, the Hon. Carl Scully,MP, announced a variety of new measures concerning the taxi industry in July 2000. One suchmeasure concerned the production of a discussion paper to investigate IPARTsrecommendation of delegating the regulation of the rural taxi industry to local councils.However, as the IPART report contains a heavy focus on the Metropolitan Transport District(MTD), it was felt opportune to canvass other issues relating to the rural taxi industry in thispaper.

It was considered that this might lead to a more focused approach to the specific needs of thetaxi industry with a view to providing more efficient and effective service delivery in rural

areas.

1.2 Aims and Objectives:

The principal aim of the discussion paper is to investigate IPARTs recommendation ofdelegating the regulation of the rural taxi cab industry to local councils. In doing so, the paperalso examines issues relating to the taxi industry generally in rural New South Wales (NSW).

More specifically, the objectives of the discussion paper are:

To outline the advantages and disadvantages of local councils regulating the taxi industry inrural NSW.

To examine whether there is any justification to making policy adjustments regarding ruraltaxi operators based on different conditions and/or needs in those areas.

To compare the relative operating costs of rural taxis as against urban taxis. To examine the implications of supply and demand for taxi services in rural NSW. To examine the concerns of the taxi cab industry regarding other forms of public transport in

rural NSW.


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To provide options for discussion with regard to particular courses of action.For the purposes of this paper, rural New South Wales refers to all areas outside theMetropolitan Transport District.

1.3MethodologyThe preparation of this discussion paper involved both primary and secondary research.

Primary Research

The aim of the primary research was to consult directly with taxi industry representatives andother organisations with an interest in the rural taxi industry. This consultation was achievedthrough study visits to a number of locations in the country as well as through meetings held inSydney. During such visits to rural NSW, focus group sessions with taxi industryrepresentatives and other relevant organisations took place.

The visits to rural NSW provided an opportunity to gain a first hand insight into how theindustry operates at local level in rural communities. Areas visited included the Central Coast,Newcastle, Wollongong, Wagga Wagga, Bathurst and Lismore. The primary research took placeduring December 2000 and January 2001. A list of organisations who were directly involved inthe consultation process can be seen in Appendix 1.

Secondary Research

Secondary research involved an analysis of written material from a variety of sources. Sourcesincluded:

The IPART Issues Paper, Interim Report and Final Report regarding the taxi and hire carindustries in NSW.

Submissions to the IPART inquiry into the taxi industry from individuals and interestgroups.

Minutes from meetings of the Department and Taxi Industry Joint Consultative Committee. Department of Transport files and papers.


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1.4Structure of ReportThe discussion paper is divided into 5 sections.

Section 1 provides an introduction to the discussion paper and the methodology employed in itspreparation.

Section 2 contains a profile of the taxi industry in rural NSW. The profile provides a currentsnapshot of the industry including relevant statistical information.

In section 3, the advantages and disadvantages of local council involvement in regulating therural taxi industry are explored. In addition, new approaches to policy formation are discussed.

In Section 4, other issues pertinent to the rural taxi industry are discussed.

Section 5 focuses on the options for reform of the rural taxi industry.

Finally, the conclusion draws together the main themes of the paper with a view to the nextsteps in the consultation process.


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Section 2: An Overview of the Taxi Industry in Rural New SouthWales

2.1Structure

The rural taxi industry encompasses all taxi services outside the Metropolitan Transport District.This is a vast geographical area and, consequently, the industry varies considerably due to localconditions. In cities such as Newcastle, Wollongong and Gosford, taxis play a key role insupplementing public transport while in small towns, taxis may be the only form of publictransport available. Indeed, in some parts of rural NSW, there are no taxi services whatsoever.

The rural taxi industry is divided into different operational areas, within which single ormultiple taxi operators exist. An operational area may be a transport district (as in Newcastleand Wollongong), a city, a town, a group of towns or a local government area. In addition to

variations in the size and nature of operating areas, the taxi industry varies from single operatorsto large networks, made up of numerous operators in an area.

Table 1 outlines the number of taxis per area, the type of licence and the number of taxisoperated by licensees. Table 2 provides similar data for Newcastle and Wollongong. From thisdata, the following observations can be made regarding the structure of the taxi industry in ruralNSW.

63% of towns in rural NSW have 4 taxis or less with only five urban centres outside Sydneyhaving greater than 30 taxis each.

86% of all taxi licences outside of the Metropolitan TD, Newcastle TD and Wollongong TDare unrestricted licences. The figure for Newcastle and Wollongong is 94%.

10% of all taxi licences outside of the Metropolitan TD, Newcastle TD and Wollongong TDare WAT licences. This figure falls to 3.1% inside the Newcastle and WollongongTransport Districts.1

85% of all licence holders operate their own taxis outside of the Metropolitan TD, NewcastleTD and Wollongong TD. Within Newcastle and Wollongong, 72.3% of licence holdersoperate their own taxis.

1 Unknown quantities of unrestricted licences are attached to wheelchair accessible vehicles throughout rural NSW.


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Table 1-Type and Distribution of Taxi Licences in Rural NSW

Town Numberof Taxis

UnrestrictedLicence

WATLicence

Short-term

Licence

TaxisOperated

by licenseesAberdeen 1 1 0

Albury 28 25 3 27

Alstonville 1 1 1

Armidale 16 15 1 12

Ballina 7 4 3 6

Balranald 1 1 0

Bargo 1 1 1

Barham 2 2 2

Barooga/Tocumwal 3 3 3

Batemans Bay 4 3 1 4

Bathurst 28 27 1 17

Bega 4 3 1 4

Bellingen 2 1 1 2

Bermagui 2 2 0

Berry/Shoalhaven Head 2 2 2

Blackheath 4 4 3

Blaxland/Glenbrook 3 3 2

Blayney 1 1 1

Boorowa 1 1 1

Bourke 4 4 4

Bowraville 1 1 1Branxton/Greta 1 1 1

Broken Hill 20 19 1 20

Bunendore 1 1 1

Buronga/Coomealla 1 1 1

Byron Bay 6 3 2 1 6

Camden Haven 1 1 1

Casino/Coraki 13 13 13

Central Coast 73 49 13 11 56

Cessnock 15 15 15

Cobar 4 4 3Coffs Harbour 17 12 5 13

Condobolin 2 2 0

Cooma 10 10 10

Coonabarabran 3 3 2

Coonamble* 3 3 3

Cootamundra 3 3 3

Corowa 4 3 1 4

Culburra 2 1 1 2

Dareton 1 1 1

Deniliquin 4 4 2

Dubbo* 20 18 2 17

Eden 2 2 2

Evans Head 1 1 1


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Town Numberof Taxis

UnrestrictedLicence

WATLicence

Short-termLicence

TaxisOperatedby licensees

Fingal Head 1 1 1

Forbes 7 7 7

Forster/Tuncurry 7 3 4 7

Gilgandra 1 1 1Glen Innes 4 4 4

Gloucester 1 1 1

Goulburn 28 28 27

Grafton 14 13 1 14

Grenfell 1 1 0

Griffith 11 9 2 6

Gundagai 2 2 2

Gunnedah 8 8 8

Guyra 1 1 1

Harden/Murrumburrah 1 1 1Hay 1 1 1

Howlong 1 1 1

Huskisson 5 2 3 5

Inverell 8 7 1 7

Jindabyne 2 2 2

Junee 2 2 2

Katoomba 22 21 1 13

Kempsey 13 13 12

Kiama/Gerringong 5 4 1 5

Kingscliff/Chinderah 3 2 1 2

Kurri Kurri 6 6 6Kyogle 2 2 2

Laurieton 2 2 2

Lawson 4 4 4

Leeton 4 4 3

Lightning Ridge 1 1 1

Lismore 28 26 2 22

Lithgow 11 11 10

Macksville 3 3 3

Maclean 2 2 2

Maitland 30 29 1 25Manilla 1 1 1

Merimbula 4 2 1 1 4

Milton/Ulladulla 5 4 1 5

Moama 6 2 4 5

Moree 14 14 14

Morisset 3 3 3

Moruya 3 3 3

Mudgee 8 7 1 5

Mullumbimby* 5 3 2 5

Mulwala 2 2 2

Murray Downs District 1 1 1


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Town Numberof Taxis

UnrestrictedLicence

WATLicence

Short-termLicence


Murrumbateman 1 1 1

Murwillumbah 7 7 4Muswellbrook* 9 8 1 0

Nambucca Heads 4 4 3

Narooma 4 3 1 4

Narrarbri 6 6 6

Narranderra 3 3 3

Narromine 2 2 2

Nelson Bay 2 1 1 1

Nowra* 13 9 4 13

Oberon 1 1 1

Orange 30 29 1 24Parkes 12 11 1 7

Picton/Tahmoor 4 4 4

Port Macquarie 13 8 5 12

Queanbeyan 16 15 1 13

Quirindi 1 1 1

Scone 2 2 1

Shire of Port Stephens 1 1 1

Singleton 6 4 2 6

South Bowenfels 1 1 1

SouthWest Rocks 2 1 1 2

Springwood 4 4 3Sussex Inlet 1 1 1

Tamworth 22 20 2 20

Taree* 15 14 1 15

Temora 2 2 2

Tenterfield 2 2 2

Thredbo 1 1 1

Tocumwal 1 1 1

Tomaree Peninsula 6 3 3 6

Tumut 5 5 4

Tweed Heads 13 12 1 12Uralla 2 2 2

Urunga 1 1 1

Wagga Wagga* 29 23 6 23

Walgett 1 1 1

Wangi Wangi 2 2 2

Wauchope 4 4 4

Wellington 5 5 5

Wentworth 1 1 0

West Wyalong 3 3 1

Weston/Kurri Kurri 3 3 0

Wingecarribee 18 17 1 18

Wingham 3 3 3

Woolgoolga 2 1 1 2


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Town Numberof Taxis

UnrestrictedLicence

WATLicence

Short-termLicence


Yamba 1 1 1

Yass 4 4 4

Young 8 8 8

TOTAL 926 799 92 35 790

* In each of these locations, a small number of taxis are licensed to operate in a largeroperational area.

Source: Department of Transport, January 2001

Due to the scale of the taxi industry in Newcastle and Wollongong, data from both TransportDistricts is provided in Table 2 so as not to distort the data from the remainder of rural NSW.

Table 2-Type and Distribution of Taxi Licences in Newcastle and Wollongong

Transport District No. ofTaxis

Unrestricted WAT Short-Term

Others TaxisOperated byLicensees

Newcastle 158 146 4 2 6 124

Wollongong 127 122 5 82

TOTAL 285 268 9 2 6 206


Table 3 provides a picture of the scale of the taxi industry across rural NSW. It is clear from thetable that the taxi industry in rural areas is predominantly made up of small operators. 63% ofall operating areas in rural NSW have less than 4 taxis in operation with just 15% havingbetween five and nine taxis. Only 10% of operating areas have a taxi industry in excess oftwenty taxis.

Table 3- Concentration of Taxi Licences across Rural NSW

No. of Cabs 0-4 5-9 10-14 15-19 20-24 25-29 30+

No. of Areas 89 21 11 6 4 5 5


2.1.1 Taxi LicencesThe most common form of licence in rural NSW, including Newcastle and WollongongTransport Districts, is the ordinary unrestricted category, which accounts for 88% of all licencesissued. Unrestricted licences were issued free of charge and can be traded within the authorisedarea of operation. However, as those former annual licences have taken on a perpetual statusand as the Department of Transport, since 1990, has issued no such licences, they haveaccumulated a considerable market value in some areas. The market value varies significantly

throughout rural NSW. A number of variables affect the value of taxi licences including whetherthere is a shortage of taxis or excess taxis, population trends, competition from other transport


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providers and Departmental policy. There is no limit to the number of licences that theDepartment may issue or that an individual may hold.

The taxi industry structure varies across rural NSW. In some towns, one person or family mayown and operate all taxi licences while in others a local network may comprise differentindividual operators with each operating just one licence.

The WAT licence category accounts for 10% of all licences in rural NSW. In addition, there isan unknown number of WATs operating on ordinary unrestricted licences.

Short-term licences account for 4% of licences issued since 1990.

82% of all licence holders in rural areas, including the Newcastle and Wollongong TransportDistricts, operate their own taxis. The remainder lease their licences to operators of taxibusinesses. When compared with figures from the Metropolitan Transport District, thisrepresents a significant difference between the rural and metropolitan taxi industries. There is nolimit to the number of taxis an operator may manage.

Taxi Licences in Newcastle and Wollongong

Unrestricted licences represent 94% of all taxi licences in the Newcastle/Wollongong TransportDistricts. This is almost 10% higher than the average across the rest of rural NSW. WATlicences account for 3.2% of licences in Newcastle/Wollongong. When the proportion of WATlicences in Newcastle/Wollongong is compared with the rest of rural NSW, it can be seen that,proportionately, there is more than three times as many WAT licences in the rest of rural NSWwhere they are issued free of charge. Short-Term licences account for 0.7% of taxi licences.

2.1.2 Taxi NetworksThe high proportion of licensee operators in the rural taxi industry ensures the closeinvolvement of licence holders in the organisation of the industry at local level. In many partsof rural NSW individual taxi operators have come together to form networks to run theirbusiness. In many cases, these networks manage licences, operate taxi businesses and in almostall cases, provide dispatch services. All taxi networks must be authorised by the Department toprovide dispatch services. While there is no need for licence holders to be members of a taxinetwork, operators are required under the Passenger Transport Act 1990 to be connected to anetwork if there is one in the area. In rural areas, there is one taxi network in each operationalarea. This means that in practice, almost all operators are members of the local network.

Dispatch services vary across NSW depending on the size of the city or town and theavailability of technology. Newcastle and Wollongong taxis operate from a computerised taxidispatch system whereas smaller towns often use two way radio communication with a centralbase. In some very small rural areas, mobile phones may be the sole method of providingdispatch services.

In some towns, a rostering or preferred car system is in place by agreement amongst the taxioperators. This results in some taxis being removed during quiet periods and all taxis beingavailable during peak periods. Shifts are calculated to ensure that all drivers have an equal shareof quiet and busy periods and thus, equal opportunities to earn income. However, the rostering

of cars has not found favour with the Australian Competition and Consumer Commission(ACCC), which has intervened to prevent such restraints on free trade in some areas.


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2.1.3 Taxi DriversTaxi drivers are authorised by the Department of Transport and are subject to a number of rulesconcerning their behaviour. There are 4,081 authorised drivers in rural NSW. This figure

contains an unknown large proportion of drivers who are presently inactive within the industryand, as such, it is difficult to identify the exact number of active drivers. Taxi driving tends tobe viewed as a temporary employment opportunity by many drivers, which leads to a relativelyhigh turnover of drivers, especially in larger towns and cities. This is not so much the case insmaller towns where taxi driving is often a lifelong vocation for drivers.

All drivers must obtain an appropriate licence under theRoad Transport (Driver Licensing) Act1998 and must have a Police, Roads and Traffic Authority (RTA) and medical check as part ofthe Departmental driver authorisation process. Driver training in rural areas is left to thediscretion of the individual network with training content focused on local geography andspecific aspects of the local market. All drivers of cars connected to a network are required to

wear a uniform that is agreed between the local network and the Department.

2.2 Market CharacteristicsThe rural taxi industry has a combined phone, rank and hail market structure. The majority ofbusiness comes from the phone and rank elements of the market with a much smaller proportioncoming from on-street hailing. This is due to the fact that a large proportion of the market isdoor-to-door trips as well as trips from shopping areas that have ranks conveniently locatednearby.

Taxi passengers reflect a broad cross-section of society and the reasons for using taxi servicesare varied. Older people and young people with disposable income tend to use taxi servicesrelatively frequently in rural areas. It is also evident that people with disabilities are animportant user group and often depend on taxis for accessible transport in rural areas.

The Taxi Transport Subsidy Scheme (TTSS) was introduced in 1981 in order to promoteaccessibility for people who cannot use public transport because of their disability. It does thisby subsidising 50% of the taxi fare up to a maximum of $30. This allows people with a seriousand permanent disability to travel by taxi for work, study, medical treatment and leisureactivities.

Another aspect of the taxi market in rural NSW is contract work in relation to providing servicesfor children with special needs and providing services for medical institutions. The taxi industryprovides transport for children with special needs to and from school under the School StudentTransport Scheme. At many locations throughout NSW, the taxi industry provides a valuabletransport service enabling members of the public to attend medical appointments and assistingthe health sector in carrying out its responsibilities. The Department of Veterans Affairs usestaxi services to provide transport for eligible veterans, war widows and their dependents for thepurposes of medical treatment. Examples of services provided to the health sector include thetransport of x-rays and blood samples between hospitals or doctors surgeries.


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2.3 Costs

The Country Taxi Operators Association (CTOA) estimates that the average cost of running asingle taxi business in rural NSW in 2000 was $114,718. However, it must be emphasised thatthis figure represents the average cost of running a single taxi and due to the nature of the ruraltaxi industry, there are significant variations in costs between large cities such as Newcastle and

Wollongong and small rural towns throughout NSW. There is a need for an independent,objective assessment of expenses incurred and revenue generated by the taxi industry in ruralNSW to be carried out. Such a study would provide reliable data for informing policy formationregarding the rural taxi industry. Table 4 shows the breakdown of the Associations estimate ofthe average costs of operating a single taxi in 2000.

Table 4- Average Operating Costs of a Single Taxi in Rural NSW in 2000

Expenses: Cost ($)

Fixed Expenses:

Vehicle Lessee Payments 7,703

Insurances 6,013

Government Charges 839

Base or Network Fees 7,800

License lease fees 7,800

Annual Establishment Costs 500

Variable Expenses:

LPG Fuel 16,975Maintenance labour 5,355

Vehicle Parts and Panels 4,425

Cleaning 3,152

Tyres 1,650

Administration Labour 7,868

Operators Superannuation 3,465

Operator and driver earnings 35,448

Uniforms 2,546

Other 3,179

TOTAL OPERATING EXPENSES 114,718

Source: Country Taxi Operators Association, January 2001

2.4 RegulationThe need for regulation within the taxi industry has long been a topic of debate in NSW.However, as pointed out in the IPART Final Report on the Taxi Industry in NSW (1999);

The debate is not about whether the taxi industry should be regulated or deregulated. It is

almost universally accepted that some form of regulation of the taxi industry is required, given


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the nature of the market. Rather, the debate is about what aspects of the industry should be

regulated, and to what extent they should be regulated. (IPART, 1999:5)

Regulation of the taxi industry in NSW is justified on the basis of the need to provide foruniversal access, minimum standards of service quality and safety standards. The taxi industryin NSW has a long history of regulation dating back to the pre-1930s. Up to 1982, local

government was responsible for issuing taxi licences and regulating fare structures. These rolescould only be performed after consultation with the Department of Motor Transport.Responsibility for all aspects of industry regulation was transferred to the Department of MotorTransport in 1982 (whose public vehicle responsibilities were subsequently taken over by theDepartment of Transport)

At present, the Department and the RTA regulate the taxi industry. The Department has primaryresponsibility for the regulation of the industry. This authority is derived from the PassengerTransport Act 1990 and the Passenger Transport (Taxi-cab Services) Regulation 1995. There isadditional legislation which has a bearing on the manner in which taxi services are provided,including the Transport Administration Act 1988, the Workers Compensation Act 1987and the

Industrial Relations Act 1996. Furthermore, there is extensive vehicle, driver and passengersafety legislation administered by the RTA.

The Transport Administration Act1988 deals with the respective responsibilities of the Ministerfor Transport and the Director-General of the Department of Transport in providing publictransport generally. It also provides for the delegation of the Director-Generals powers and setsdown the boundaries for the various transport districts.

Under the Passenger Transport Act 1990, regulatory powers include the authority to issuelicences, set fare levels and driver and vehicle standards. The Passenger Transport (Taxi-cabServices) Regulation 1995 is concerned with specific aspects of the operation of taxi services.

Key elements of the Regulation deal with:

Accommodation standards for taxis Maximum age of taxis Operation of taxi-meters Security devices Condition of taxis Information in taxis such as the rights and obligations of the hirer and the display of fares Child restraint systems Signs and lights on taxis including provisions of taxi network decals, livery and advertising Stand-by taxis Records maintained by drivers and operators and the retention of such records Fares Behaviour of drivers and passengers Driver uniforms Lost property Carriage of goods and animals Taxi StandsSince the introduction of the Passenger Transport Act 1990, a shift towards increased industry

co-regulation between the Department and industry representative groups has taken place.Industry groups play a key role in relation to customer complaints handling and assist inenforcing standards that are set down by the Department.


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Table 5 provides a summary of the various elements of taxi regulation regarding rural NSW.

Table 5- Summary of Taxi Regulation in NSW

Regulation Main FeaturesLicensing - Different types of licences

- Licences are transferable (except short-term licences)- Director-General can impose licence conditions as hesees fit (operating hours/vehicle type)

Pricing - Maximum fares set- Additional tariffs set

Networks - Must be authorised- Standards, such as response times for booking,

monitored

Operators - Must be accredited- Must be able to meet safety and vehicle standards- Must have sound financial standing- Must be of good repute

Drivers - Need driver authorisation- Must have no criminal record and good driving history- Must be medically fit- Required to display driver authority in vehicle- Act and Regulation outline driver offences- Must wear uniform

Vehicle Standards - Must be clean- Age restrictions- Must be connected to network-

Standard livery- Limited advertisingCustomer Service - Display of passenger rights and obligations in vehicle

- Maximum fares displayed in taxisCompliance - Team of Departmental officials enforce compliance

(investigate complaints, issue fines for non-compliance)

The Taxi and Hire Car Bureau was established within the Department in August 2000 to deliverall taxi and hire car policy, regulatory and administrative functions on a State-wide basis. TheBureau is located in Parramatta. The Bureau consists of personnel who focus on policy andplanning, licensing and authorisation, compliance, legal and administrative issues. Anintegrated approach to the regulation of the taxi industry is now provided at one location underthe direction of a General Manager.

The RTA also plays an important role in the regulation of the taxi industry. The RTA issuesdrivers licences, registers vehicles, monitors vehicle safety standards and authorises taxiinspection stations.


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2.5 Differentiating between the Rural and Metropolitan Taxi IndustryIn order to understand the nature of the taxi industry in rural NSW, it is important todifferentiate between the industry in the Metropolitan Transport District (Sydney) and theremainder of NSW.

The industry in rural NSW has characteristics that make it distinct from the industry in Sydney.However, the industry outside Sydney cannot be viewed as a homogenous entity with similaroperations, needs and concerns. As outlined earlier, the industry varies in structure from townswith one taxi operator to the large cities of Newcastle and Wollongong which have large fleetsof taxis and which operate in a market that displays aspects of both metropolitan and rural NSW.

The following are some of the differences that distinguish the taxicab industry in rural NSWfrom the industry in the Metropolitan Transport District.

The taxi industry in Sydney consists of 12 networks each of which have large fleets whilethe rural industry has 151 networks with two-thirds of them operating less than 4 taxis.Thus, there are vast differences in the scale of operations between the metropolitan and ruralindustries.

All 12 networks in Sydney operate within the one transport district whereas in rural NSW,there is one network in many operating areas.

85% of taxis in rural areas are licensee operated compared to approximately 50% in theMetropolitan Transport District (IPART;1999:77). The large proportion of taxis that arelicensee operated in rural areas ensures licence holders play a more hands-on approach

within the industry compared to their metropolitan counterparts.

The rural taxi industry is very much dependent on repeat business because of the limited sizeof localised markets. This ensures that an incentive exists for licensee-operators and driversin rural areas to build relationships with the public to ensure a strong taxi industry locally.This also provides an incentive for the industry in rural areas to ensure an efficient service isprovided and that customer complaints are dealt with swiftly and fairly. In metropolitanareas, the scale of the industry and the large customer market combine with the effect thatrepeat business is a relatively minor concern for individual taxis.

The rural taxi industry depends largely on telephone bookings and pick-ups from taxi rankswhereas the industry in Sydney has a high dependence on the hail market.

Fixed shift pay-ins by bailee drivers are preferred in metropolitan areas whereas in ruralareas the norm is for bailees to take a percentage of shift revenue with the operator meetingoverhead costs from the remaining percentage of shift takings.

Taxi operators and drivers in rural areas are more likely to know their customers personallythan in metropolitan areas due to the small size of many towns.

Due to the above differences, the issue of how the taxi industry in metropolitan and rural areas is

classified for policy purposes must be considered. At present, the Department recognises theMetropolitan, Newcastle and Wollongong Transport Districts as defined under the TransportAdministration Act1988 and those towns, groups of towns or local government areas outside thetransport districts.


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The only regulatory clauses that apply to the Metropolitan Transport District, Newcastle TD,Wollongong TD and the Central Coast, and not State-wide, are the requirements for driverprotection screens, vehicle tracking devices and security cameras in taxis. However, rural taxiindustry representatives feel that there is a need for policy to further differentiate between the

metropolitan and rural taxi industries (though advertising on cars was the only example given).

Industry representatives from both Newcastle and Wollongong assert that their industry hasmore in common with rural areas than the metropolitan area. As such, there is a feeling thatdriver safety requirements concerning Sydney should not have been extended to Newcastle andWollongong. Rather, industry representatives feel that safety requirements that reflect localconditions in Newcastle and Wollongong should have been devised.

However, there are many examples of where the Department has specific Regulations orpolicies which distinctly benefit the rural (other than the three big coastal cities) taxi industry,e.g. they are able to charge higher fares; they can keep their taxis two years longer; their drivers

and operators require no training; and they have been spared the significant expense of fittingvehicle tracking devices, protection screens and security cameras. In addition, their CTPinsurance premiums and workers compensation premiums are very much lower than citypremiums.

In conclusion, it is possible to distinguish key differences between the taxi industry inmetropolitan and rural areas with Newcastle, Wollongong and, to a lesser extent, the CentralCoast, displaying characteristics of both the metropolitan and rural industries.

2.6Country Taxi Operators Association (CTOA)The CTOA is the representative body of taxi operators in rural NSW. The Association has acurrent membership of approximately 450 taxi operators. Membership of the Association isopen to any accredited operator in rural NSW. The Association is closely affiliated with sixregional taxi associationswith each regional association electing two representatives onto theCTOA board of directors.2

The CTOA is also closely linked to and has representation on the NSW Taxi IndustryAssociation and the NSW Taxi Council. In addition, the CTOA is also represented on the TaxiAdvisory Committee (TAC) and the Taxi Joint Consultative Committee, both of which are

convened by the Department of Transport.

2 The six NSW Regional Taxi Associations cover the NorthWest, North Coast, Central West, Southern, South Westand Hunter regions.


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Section 3: Regulation and the Rural Taxi Industry

This section outlines the issues related to who should regulate the taxi industry in rural NSW.

3.1 IntroductionThe Department is the primary regulator of the taxi industry in rural NSW with the RTA alsoplaying a role in regulating the industry. With the introduction of the Passenger Transport Act1990, co-regulation between the Department and industry groups has been encouraged to ensurecompliance with the rules governing the industry.

The advantages of the Department as regulator include:

The presence of a body of expert personnel concerning taxi industry issues. A strong relationship with taxi industry representative bodies. An integrated approach to all aspects of the taxi industry. An objective approach to decision making. A dedicated taxi and hire car bureau with administrative and operations systems in place. Direct access to the Minister for Transport.The final report of the IPART review of the taxi and hire car industries in NSW recommendedthat;

the Department of Transport in conjunction with industry and local councils, investigate

options for delegating the regulation of taxis in NSW rural and regional areas to local

councils. (IPART;1999:86)

The rationale for this recommendation appears to have come from the South Australianregulatory model, where local councils regulate taxis in rural areas. IPART states that;

this approach has advantages in that it allows for the regulator to be abreast of local

conditions and allow for flexibility across the state. (IPART;1999:86)

The IPART final report does not specify whether it is referring to possible local councilinvolvement of all aspects of taxi regulation or specific aspects of regulation. Local councils inrural NSW had limited responsibility for the issue of licences and changing of fares prior to1982. Full responsibility for those aspects of regulation then became the responsibility of theDepartment of Motor Transport (and later the Department of Transport).

The Local Government Act 1993 provides Councils with the powers to administer regulatorysystems. Local Councils role in regulation includes issues as diverse as control of buildingdevelopments, noxious weeds and dogs. At present, the only issues that necessitate directcontact between the taxi industry and local councils in rural areas, concern local traffic

management and the location of taxi ranks.


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3.2 Advantages/Disadvantages of Local Councils Regulating the Rural TaxiIndustry

The following advantages and disadvantages can be identified in relation to potential localcouncil involvement in regulating the taxi industry.

Advantages

Decision-making and service provision would be devolved to local level, so that, forinstance, maximum fares could be set according to the affluence or otherwise of the localgovernment area.

Local councils could ensure more frequent interface between the local taxi industry andthemselves as the regulator.

Local councils have an intimate knowledge of community needs and would be well placedto respond to community concerns regarding the taxi industry.Disadvantages

There is enormous diversity within local councils across NSW in terms of size, structure,resources, roles, responsibilities and approaches to service delivery. This would lead tohuge diversity across local councils in relation to the way in which regulations and standardswithin the taxi industry are enforced. Neither the public nor the taxi industry wouldappreciate such diversity.

Local Council staffs are inexperienced in relation to dealing with the taxi industry. Local Councils may lack objectivity when making policy decisions regarding the taxi

industry due to the localised nature of the issues involved.

The proliferation of taxi fares across operational areas would be confusing to the public. Local Councils already have a wide range of responsibilities to carry out with limited staff

resources.

As taxi industry regulation requirements are not provided for within the current role andstructure of local councils, it is likely that a legislative, or at least a regulatory, amendmentwould be needed to legally devolve responsibilities.

The financial cost of devolving regulatory functions to local councils would be prohibitive. It is likely that a new taxi regulation section within councils would need to be established to

carry out the devolved duties.

Consultations with local council representatives and rural taxi industry representatives havegenerally shown no support for the involvement of local councils in regulating the taxi

industry. It is pointed out by both sectors that as the current system of regulation is efficient,there is no need to transfer authority to regulate from the Department to local councils.


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The possible amalgamation of councils at a future date would cause further restructuring toregulatory arrangements.

3.3 Who should Regulate the Rural Taxi Industry?

The issue of who should regulate the rural taxi industry is one that was raised as a result of theIPART review of the taxi industry. In examining the merits of the Department and/or localcouncils regulating the rural taxi-cab industry, the following considerations should be taken intoaccount.

ObjectivityThe regulating body must be impartial in its dealings with the taxi industry.

TransparencyThe decision-making processes of the regulator must be transparent in order to attract theconfidence of the taxi industry and the travelling public.

AccountabilityThe regulator must be directly accountable to the public for its actions.

CapacityThe regulator must have the organisational capacity and resources to ensure a quality service isprovided in the public interest.

The advantages of local council involvement in the regulation of the taxi industry point to thebenefits of devolving decision-making to local government while the disadvantages outlinedfocus on the logistical and administrative concerns which such a transfer of powers would bringabout. In short, the advantages tend to focus on a theoretical argument for local councilsregulating the industry while the disadvantages focus on the impact in real terms of such achange. Moreover, neither the taxi industry nor local government has expressed support forsuch a proposal.

Despite any perceived merits of devolving power to local councils, it can be concluded that thedisadvantages of local councils regulating the rural taxi industry far outweigh any advantages ofthe proposal. It is evident that the public interest is best served by continued regulation of therural taxi industry by the Department. The establishment of the Taxi and Hire Car Bureau withinthe Department provides for an integrated approach to all aspects of the taxi industry and is bestpositioned to guarantee an efficient system of regulation for the taxi industry.

The Taxi Advisory Committee (TAC), a committee made up of representatives from a range ofinterests with a stake in the taxi industry, serves as a forum for discussion of the development ofthe taxi industry as well as further strengthening the integrated approach of the Department. 3

3 The TAC is made up of representatives from the Department of Transport, Roads and Traffic Authority, NSWTaxi Council, Country Taxi Operators Association, Disability Council of NSW, Tourism NSW, Public TransportAuthority, NSW Transport Training Board and the Transport Workers Union.


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Local councils could, however, have a greater role in relation to the co-ordination of publictransport provision at the local level in NSW. There appears to be merit in local councilsplaying a greater role in facilitating better communication between transport providers at locallevel. This idea is explored in more detail later.


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Section 4: Identification of Other Issues for Discussion

This section details other issues related to the rural taxi industry which require discussion.

4.1Supply and Distribution of Taxi LicencesThe supply and distribution of taxi licences in rural NSW has been a matter of discussionbetween the Department and the Taxi industry for some time. There is a widespread viewwithin the taxi industry that certain locations in rural NSW experience a shortage of taxis whileother locations have excess taxis relative to the local market. This position would appear to besupported in the IPART review of the taxi industry, which states:

wide disparities in the number of taxis per 1000 population suggests there may be too few taxis

in some locations and a surplus in others (IPART, 1999:84)

While focusing solely on the ratio of taxis to population is limited as an approach to assessingtaxi supply, it does highlight the variations that exist between locations throughout NSW. Inaddition, the market value of licences in rural NSW varies significantly depending on marketconditions in local areas. A study of taxi licence values in 1997 clearly demonstrated acorrelation between the number of taxis per 1000 population and the market value of licences.The value of taxi licences in well-serviced areas was significantly less that the value of licencesin less well-serviced areas. (IPART,1999:85)

The presence of well-serviced and less well-serviced areas has been caused by a number offactors, namely;

Increased urbanisation of coastal communities at the expense of inland rural areas. Decrease in overall population of rural NSW. Industrial decline and government centralisation of services has seen rural areas lose

employment.

Changes in social trends such as increased second-car ownership, extended shopping hoursand new home entertainment products have all negatively affected the taxi market.

Growth in alternative forms of transport such as Community Transport and courtesy buseshave eroded the traditional taxi market. During 1999-2000, CT providers performed onaverage 13,537 trips per month assisting 26,411 clients.(Department;2000:33)

Changing leisure and holiday trends have led to a huge growth in the tourism industry atcertain rural locations. For example, the Northern Rivers region received 182,000international visitors in 1999 while the region between Nelson Bay and Coffs Harbourreceived 170,000 international visitors in the same period. (Tourism NSW,2000:36)

Taxi industry representatives have argued that fewer taxis should operate at some locations.They feel that less taxis would lead to a more vibrant and profitable business environment for

taxi operators and is more desirable than having idle taxis for significant periods of time.


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At present, some networks operate a rostering system in areas well serviced by taxis. However,this practice has attracted the attention of the ACCC and is viewed as being in breach of theTrade Practices Act 1974 (Commonwealth) and the Fair Trading (Amendment) Act 1998(NSW). In addition, the rostering of taxis depends on the voluntary agreement of all taxioperators to operate such a system.

The taxi industry put forward a plan in 1996 to transfer taxi licences from well-serviced areas toareas that were less well serviced. The rationale for this plan stemmed from a belief thatappropriate taxi service levels could be achieved throughout rural NSW by transferring licencesin such a manner. However, as the Passenger Transport Act 1990 could not accommodate sucha proposal, the industry wanted a significant Treasury contribution and with probity concernsidentified, the plan was not viable.

While there are still some areas which the taxi industry believes have excess taxis, the shortageof taxis in other areas has sometimes been dealt with through the issuing of licences. However,some remote parts of NSW remain severely transport disadvantaged without any form of public

transport.

4.2 Costs of Running a Taxi BusinessThe average operating costs of a single taxi, as identified by the CTOA, are presented in section2.2. Industry sources claim that profit margins have become increasingly tighter in recent years.This is attributed to a number of factors:

Increase in expenses, especially in relation to the cost of insurance, workers compensationand fuel.

Changing demographic and social trends have led to a decline in taxi patronage in ruralareas.

Other forms of transport, namely Community Transport and courtesy buses, have reducedthe size of the potential market for taxis in local areas.

In order to improve the profitability of taxi businesses, rural industry sources have made anumber of suggestions to the Department and other relevant bodies. These include a:

- reduction in the annual operator accreditation renewal fee.- reduction in Workers Compensation premiums.- reduction in Compulsory Third Party insurance premium- reduction in associated transportation costs

Annual Operator Accreditation Renewal Fee

The annual Operator Accreditation Renewal Fee is set at $260 per taxi. The fee is allocated tothe Taxi Advisory Committee for the purposes of industry-related education, training, driver andpassenger safety, enhanced service delivery, use of technology and other developmentalinitiatives. It is felt by rural taxi industry representatives that there is an insufficient linkbetween the fee paid and the benefits received in return by the rural industry. The CTOA would

like to see the accreditation fee reduced by half for rural operators.


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Workers Compensation Premiums

WorkCover NSW manages the States workplace safety, injury management and workers

compensations systems. Workers Compensation premiums are set on a per licence basis. Thecost for rural operators is $1,550 per licence per annum. The CTOA argues that the rates leviedby WorkCover NSW penalise operators in small and medium sized towns who only engagedrivers on a casual basis, sometimes for only one or two shifts per week. The Association hasargued that different categories of workers compensation premiums should be established inorder to reflect the manner in which the rural industry operates. This approach would seeoperators who engage drivers on a casual basis pay less than operators who engage drivers on amore regular basis. The CTOA continues to liaise with WorkCover NSW on this issue.

Compulsory Third Party Insurance

Compulsory Third Party (CTP) insurance premiums have risen by 0.19% since the 5 th October2000. The cost of CTP for rural operators is now $2,496.80 per annum. According to theCTOA, this represents a significant expense for the rural taxi industry.

Transportation Costs

Transportation costs in NSW rose by 7.9% in 2000.4 This was primarily due to fuel priceincreases while motor vehicle repair and servicing costs also contributed to increased overheads.This data confirms anecdotal evidence from taxi industry representatives across rural NSW whohave expressed concern about the rising price of Liquefied Petroleum Gas (LPG) and its impacton profit margins.

In addition to the above cost issues, the CTOA believe that a relaxation of advertisingrequirements laid down by the Department and increased regulation of Community Transportand courtesy buses would improve the market environment for the taxi industry in rural NSW.Both of these issues are explored in more detail later.

4.3 Relationships with Other Transport Service ProvidersIt is possible to identify the following forms of transport provision at local level in rural areas.

Taxi Public bus. Courtesy bus. Community Transport (CT) Private Hire CarsPublic Bus Services

The relationship between the taxi industry and other forms of local public transport in rural

NSW manifests itself in a number of ways. In relation to public bus services, it is evident that

4 Consumer Price Index-Quarterly Report, December 2000


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for the most part a relatively good relationship exists between operators of both forms oftransport. Although both modes of transport are targeting a similar market, the operationalpractices of both industries allow for a relatively peaceful co-existence. While public buses

operate to set timetables and routes, taxis offer greater flexibility to the public and cater for otheraspects of the local market such as door-to-door carriage and contract work.

Courtesy Bus Services

Courtesy bus operators tend to be viewed as direct competition by the taxi industry. One issuein particular that is of concern to the rural taxi industry is the growth in the number of courtesybuses in recent years. A courtesy bus is a bus that is provided by a particular business for thepurposes of transporting patrons to and from their premises. Sometimes, businesses combinetheir resources in order to operate a courtesy bus service.

The rationale behind operating courtesy buses is that the provision of free transport will enticecustomers to a particular hotel, club or retail outlet and so give a competitive advantage to thebusiness. In some cases, a hotel or club may purchase their own bus and operate the courtesyservice while others pay a commercial bus operator a set hourly rate and he/she responds torequests for transport to and from the sponsoring business from the public. In some rural areas,the RTA and local councils have co-operated to provide courtesy buses as an alternative todrinking and driving.

The taxi industry view the operation of courtesy buses in this manner as unfair as they arecapturing part of the taxi market without being subject to the same level of regulation. TheCTOA believes that as transport is being provided to the public, issues such as licensing and

driver and vehicle standards should be regulated under the Passenger Transport Act 1990.

Community Transport

Similar concerns are expressed by the taxi industry concerning the operation of CommunityTransport (CT). CT is the term used to describe the range of government subsidisedcommunity-based transport services which are targeted at disadvantaged people in order tofacilitate access to recreation, shopping, education, medical care, social services and socialcontact. The first CT schemes emerged in NSW in the late 1970s and early 1980s. The NSWCommunity Transport Programme (CTP) commenced in 1981 and over the past twenty years a

number of new programmes have emerged under the umbrella of CT.

Examples of such programmes that are currently in existence include Home and CommunityCare (HACC) Community Transport Sub-Programme, HACC Neighbour Aid Sub-programme,Area Assistance Scheme, Health Related Transport and the aforementioned CTP. During1999/2000, a total of $14.8 million was allocated to 134 organisations under the HACC, CTPand the Area Assistance Scheme (Department, 2000:33). This aid assisted CT to perform13,537 trips per month assisting 26,411 clients. (Department, 2000:33)

In practice, organisations such as local councils, churches, community groups and clubs operatecommunity transport services. Services are delivered through the provision of group transport

in buses and individual transport in cars. A mix of paid and volunteer staff operates both groupand individual transport.


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Rural taxi industry representatives argue that throughout NSW, CT has departed from itsoriginal objectives of providing a transport service that targets those who are transportdisadvantaged and which complements existing public transport provision. It is argued that CTis operating, in many instances, as a commercial public transport provider, competing forcustomers in the taxi market without complying with the Passenger Transport Act 1990.

So far, CT using cars is free of Departmental requirements for vehicle operations to beaccredited and drivers to be authorised. As such, it is perceived as holding an unfair advantageover the taxi industry whilst it continues to provide services to individuals and groups who arenot deemed transport disadvantaged. In addition, the provision of subsidies from the Stateallows CT to undercut taxi fares when competing for business. As well as direct subsidies underthe various CT programmes, there is anecdotal evidence to suggest that CT receives supportfrom government Departments at local level in order to meet the transport needs of specificgroups. On the other hand, taxi operators routinely charge the maximum allowable fare insteadof trying to compete with other transport providers by reducing fares.

The Department is currently carrying out a review of CT and courtesy bus policy. This reviewis part of a process of reform in relation to CT and courtesy bus issues and is due for completionin August 2001.

Another important issue for discussion is the extent to which transport services are co-ordinatedat local level to ensure that an integrated public transport system runs efficiently at local level.In many parts of rural NSW, there is inadequate communication between transport providers atlocal level with the potential for maximising public transport services being lost.

In some parts of rural NSW, local councils have taken the initiative to facilitate the integrationof public transport services by establishing public transport advisory committees or the inclusion

of transport providers on existing committees. This, at a minimum, allows for greaterinformation flow between transport providers while it has the potential to develop innovativeapproaches to public transport provision at local level.

Private Hire Vehicles (Hire Cars)

Hire cars provide a passenger service through private arrangements. They differ from taxis inthat they are not allowed to obtain hirings directly off the street or to wait at ranks. As such, theydepend on telephone bookings for their work. The hire car industry often provides specialisedservices linked to tourism events, weddings, the entertainment industry and other niche markets.

The CTOA argues that the hire car industry operates in direct competition with taxis in ruralNSW. It argues that hire cars service a wide client base and operate under contract togovernment Departments at some locations. Due to the fact that the majority of taxi business inrural areas originates from telephone bookings, the CTOA argues that the differences betweenthe hire car industry and the rural taxi industry are minimal.


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4.4 Other Concerns

Driver Training

Unlike the Metropolitan Transport District, Newcastle TD and Wollongong TD, driver trainingin rural areas is left to the discretion of the local taxi network. While there is widespreadrecognition within the industry of the need for adequate driver training, there is concern amongsome interest groups about the level of awareness some drivers possess of disability issues.

People with disabilities generally need a specialised level of assistance that involves taxi driversgaining specific training. There appears to be variations in standards across rural areasregarding the quality of driver training in this regard.

Vehicle Standards

The RTA regulates vehicle safety standards in NSW. Often, taxis are the only form ofaccessible transport for people with disabilities. This points to the lack of an integrated,accessible public transport system for people with disabilities in NSW. The Draft DisabilityStandards for Accessible Public Transport propose that there should be sufficient WAT vehiclesavailable to provide for a similar response time to calls to that of ordinary taxis. There isagreement between the Department and the NSW Taxi Council that to achieve this standard,10% of the entire NSW fleet must be wheelchair accessible. There is also agreement that thisstandard must be achieved by 2005.

Advertising

Advertising on taxis is prohibited in accordance with Clause 12 of the Passenger Transport(Taxi services) Regulation 1995. However, a general exemption has been granted throughoutthe State in relation to roof structures, moulded structures on the boot lid and the rear window ofthe vehicle. Representatives of the rural taxi industry argue that the current advertising policy isdesigned for the metropolitan taxi industry and does not take into account the much smaller andlocalised market for advertising in rural NSW. In many cases, it is small businesses that wish toadvertise but the type of advertising allowed places a prohibitive cost on advertising on ruraltaxis.

It is widely felt amongst rural taxi operators that the advertising controls should be relaxed in

order to allow advertising on the rear doors of vehicles. This would greatly enhance theprospects of local business advertising opportunities being generated that would provideadditional revenue for taxi operators to offset costs.

Service from Department

While the rural taxi industry generally recognises the quality of the service provided by theDepartment, some suggestions were made during consultations concerning the way theDepartment approaches its role.

Taxi industry representatives feel that there is a need for increased networking between

Department officials and rural taxi industry representatives. It was suggested that such visitswould lead to improved communication between rural taxi operators and the Department as wellas providing a grassroots insight to the industry for Departmental staff.


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Section 5: Options for Reform

This section outlines some options for reform of the taxi industry in rural NSW. The optionswere prepared on the assumption that the Department remains as regulator of the rural taxiindustry.

5.1 Relationships with other Transport Service Providers

A number of issues concerning other transport providers in rural NSW have been raised earlierin this document. Of primary concern is the relationship between the taxi industry, CommunityTransport and courtesy bus service providers.

5.1.1 Integrated Transport Provision in Rural NSWThe provision of an integrated public transport service throughout rural NSW is a key priority of

the Department.

Issue Developing Integrated Transport Provision inRural NSW

Option Consideration could be given to local councilsfacilitating the creation of Public TransportConsultative Committees. Such committeescould consist of local council officials,representatives from all forms of localtransport (including public and courtesy bus

services, taxi network, rail and communitytransport), tourism interests, small businessrepresentatives and community/voluntaryorganisations who represent those who aretransport disadvantaged.

Rationale encourages the integrated provision oftransport at local level

develops relations between transportproviders at local level

informs the formation of transport policy identifies gaps in public transport provision

at local level

evidence to suggest that where suchcommittees do exist within local councilsin NSW, the basis exists for developinghealthy partnerships within the transportsector at local level.


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5.1.2 Regulating Community Transport and Courtesy BusesThe issue of regulation within the Community Transport and courtesy bus sectors demandsattention.

Issue Regulating Community Transport and courtesybuses

Option Establishment of an accreditation/authorisationpackage tailored to the role that CommunityTransport and courtesy buses play in relationto transport provision.

Rationale CT and courtesy buses provide a differentservice to the taxi industry.

Need for a regulatory package to bedesigned which reflects the precise roleboth CT and courtesy buses play intransport provision.

Need to formally draw distinctionsbetween each form of transport and specifyhow each should operate in practice.

The Department has recently appointed a Project Officer to carry out a review of CommunityTransport in NSW. This review will also look at related courtesy bus issues. The review willtake place over an eight-month period beginning in January 2001 after which a report with

recommended reforms will be published. Each of the above options should be considered inmore detail as part of this review.


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5.2 Supply of Taxi LicencesThe number of taxi licences in rural NSW has been a major topic of discussion between theDepartment and rural taxi industry representatives for a number of years. Key issues that need to

be addressed include:

The lack of information concerning the extent of taxi supply and demand in rural NSW Passenger perceptions of their needs in rural NSWThe following are a range of options designed to deal with the above issues.

5.2.1 Information NeedsAll decision making in relation to the supply of taxis should be based on obtaining reliableinformation.

Issue Lack of information concerning taxi supplyand demand in rural NSW

Option Preparation of a baseline study to determinesupply and demand in rural NSW.

Rationale Identification of areas with an apparentsurplus supply of taxicabs and areas withan apparent shortage of taxicabs. Criteria

to be set by which such matters should beassessed.

Periodic surveys should follow every 3years to facilitate the updating of thebaseline study. This will allow forinformed decision-making to take placeregarding taxi-licensing issues.

The TAC should provide funding for thebaseline survey and subsequent periodicsurveys.


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5.2.2 Demand for Taxi Services in Rural NSW

Issue Lack of Taxis in rural NSW

Option Development of a Supply Management Framework(SMF) for the provision of Taxi licences

Rationale The solution to improving services in rural NSWrests with the provision of additional licences toareas with licence shortages. While this is theapproach sometimes adopted by the Department,there is a need to review the way in which licencesare issued and to develop a new SMF for issuinglicences. The adoption of a new SMF would ensure

that there is consistency with regard to the issuingof licences and that the process is seen to be fairand equitable. The following steps should formpart of the SMF.

Step 1:Preparation of baseline study to identify towns with perceived taxi shortages.

As part of this study, the following variables should be considered for identifying areas that maybe under serviced by taxis.

Number of existing taxi licences. Nature of existing taxi licences. Population of area. Age profile of population. Gender profile of population Occupational profile Number of people with disabilities Number of annual visitors Rate of vehicle ownership Level of alternative transport services available Current statistics relating to the local taxi industry

- Waiting time at ranks for passengers and taxis prior to picking up a fare.- Waiting time for bookings.- Average number of radio bookings per vehicle.- Average number of hirings per vehicle.

Step 2:

Expressions of interest from taxi operators, taxi networks, public transport consultativecommittees, local councils or other relevant organisations demonstrating how each of the above

criteria are met.


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Step 3:TAC Sub-Group to assess expressions of interest and make recommendations with regard to

whether the availability of additional licences should be advertised.

Step 4:Department to initiate a tendering process in order to issue additional licences.

Step 5:Department to make decisions on the allocation of licences on the basis of pre-determinedcriteria.

Step 6:

Issuing of licences.

The implementation of the SMF allows for a systematic approach to the issuing of licences to beadopted. With surveys to take place in rural areas every 3 years, regular up to date informationwill be available to inform decision-making

5.3

Reducing Industry Costs

5.3.1 Advertising

Opportunities for generating advertising revenues are limited in rural parts of NSW. This is dueto the relatively small population base, the absence of large corporate bodies and the fact thatmost businesses are small and locally owned. As such, it appears that current advertisingexemptions are unsuitable for small rural areas, as many potential advertisers are locally basedbusinesses that would not be interested in advertising in the manner that the exemptionscurrently permit. The following options for reform are worth considering.


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Taxi industry representatives point to the need for consistency in relation to the interpretation oflegislation and regulations governing the rural taxi industry.

Issue Staff providing different interpretations oflegislation/regulations

Option Identification of senior officers from the Taxiand Hire Car Bureau who will answer anyqueries from rural NSW concerninglegislation/regulation.

Rationale Taxi industry representatives would knowexactly who to contact in relation toqueries concerning legislation/regulationand to highlight issues/needs of rural areasin relation to policy reform.

5.4.2 Networking

The need for increased networking opportunities between officials from the Taxi and Hire CarBureau and rural networks at local level has been highlighted during consultations.

Issue Lack of contact between Departmentalofficials and rural taxi network members

Option Organisation of regional seminars to bringtogether regional taxi industry representativesand Departmental officials.Seminars could be organised each year at

different rural locations with members ofneighbouring taxi networks invited toattend.

Rationale Serve as a means ofcommunicating with the taxi industry

Means of listening to the expressed needsof industry representatives.

Seminars should be organised by the TACin conjunction with the CTOA.

Both of the above options would contribute to improved communication and consultationbetween the Department and rural taxi industry representatives.

5.ConclusionThis discussion paper sets out to present an overview of the taxi industry in rural NSW and to

analyse issues related to the industry. The primary focus of the paper is an investigation into therecommendation contained in the IPART review of the taxi industry that the idea of localcouncil involvement in regulating the taxi industry be investigated. In addition, a number ofother pertinent issues are analysed and a number of options for policy reform are presented.


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This paper provides the basis for further discussion between the Department and the rural taxiindustry and will facilitate more informed policy decisions regarding the rural taxi industry.


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Bibliography

Australian Bureau of Statistics (2001) Consumer Price Index-December Quarterly, AustralianBureau of Statistics

Disability Council of NSW, (1998), Taxis and People with a Disability-Issues for Government

and Industry, Disability Council of NSW

IPART, (1999),Review of the Taxi and Hire Car Industries-Final Report, IPART

IPART, (1999),Review of the Taxi and Hire Car Industries-Interim Report, IPART

IPART, (1998)Review of the Taxi and Hire car Industries-Issues Report, IPART

NSW Department of Transport, (2000),Annal Report, NSW Department of Transport

NSW Taxi Council (2000) Taxi-Official Journal of the Taxi Industry, Volume 44, Number 5,

NSW Taxi Council

Tourism NSW (2000) Tourism Trends in New South Wales-New South Wales State Profile Yearend December 1999, Tourism NSW


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Appendix 1: List of Organisations Consulted

The following is a list of the organisations that were directly consulted in the process ofpreparing the discussion paper:

Casino Radio Cabs Central Coast Taxis Country Taxi Operators Association Disability Council of NSW Local Government and Shires Associations of NSW Lismore City Council Lismore Taxi Co-operative Newcastle Taxi Co-operative Northern Rivers Social Development Council NSW Taxi Council NSW Taxi Industry Association Radio Cabs (Wagga) Co-operative Shires Association of NSW Taxi Cabs of Bathurst Co-op Tourism NSW Transport Workers Union Wagga Wagga City Council Wollongong Radio Cabs

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Rural Taxi Industry

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