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The Weekend Neos Kosmos : 14 May 2016
DIGITAL.NEOSKOSMOS.COM THE WEEKEND NEOS KOSMOS | SATURDAY 14 MAY 2016 7 NEWS Allan Fels - game keeper turned poacher Taxi drivers forced to adopt Uber’s surge pricing model without receiving compensation or tax reductions Mr Allan Fels, previously the champion of consumer rights and equity in Australia and chairman of an independent taxi and hire car review in the state of Victoria, has been appointed to the Uber Advisory Board. Mr Fels' recommendations that came out of the Hire Car and Taxi Industry review through 2012-14 were adopted almost in their entirety by the previous state government and were enacted into law on 1 July 2014. These laws require anyone who wishes to operate a commercial passenger vehicle in the state of Victoria to purchase a PBO licence from the government for $40,000. Previously licences were worth $60,500. With the (purported) objective of lowering the cost of entry to new operators, aforementioned changes were imposed unilaterally upon the industry. They also require operators to carry commercial passenger vehicle insurance and comply with a host of conditions relevant to vehicle and driver standards. Uber has been operating in Victoria for three years - prior to the adoption of these laws, without adhering to these conditions, while it has also challenged an ATO ruling that its drivers are obliged to charge GST. Without having the operating costs that apply to the rest of the industry, Uber has been able to offer its services far more cheaply than would otherwise be possible and as such, has gained significant market share, often at the expense of existing operators that do comply with the law. Labor came to government promising to address the issue promptly via a ministerial forum. However, eighteen months later, the industry is yet to receive any communication from the Minister whatsoever, while Uber continues to operate with impunity. Without a level playing field, the existing industry cannot survive - period. The life savings and livelihood of thousands of law-abiding operators is threatened. Last Friday, Allan Fels advised industry to “just compete” with the new entrants and even suggested we adopt Uber's surge pricing model. The industry objects to these platitudes as it does not enjoy Uber's cost benefits - no compliance costs, no GST and virtually no tax paid federally. Meanwhile, it has been reported in parliament that Uber paid only $405,000 tax federally over the past three years. If the industry was exempt from the heavy compliance burden placed upon it - of which Mr Fels himself is the key architect - it would be able to offer its services far more cheaply to the Victorian travelling public and certainly not need to adopt surge pricing models. Uber's booking app is innovative but, most worryingly, if this business model is extrapolated across the economy there will be massive repercussions for Australia's already cash strapped governments. Mr Fels' claim that the industry should “just compete” with a tax minimising behemoth that flouts existing laws - his laws - is hypocritical in the extreme. For this to be possible, the government should compensate existing licence holders for the millions of dollars invested in the current state-issued licencing system and then impose the same conditions across the board - what's good for the goose is good for the gander. George Kapnias * George Kapnias is the managing director of hire car company Southern Cross Chauffeur Drive. Professor Allan Fels PHOTO: AAP/ ALAN PORRITT.
7 May 2016
21 May 2016