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Review of Aspects of the Taxi Industry in Perth and Western Australia

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Review of Aspects of the Taxi Industry in Perth and Western Australia Review of aspects of the Taxi Industry in Perth and Western Australia COMMISSIONED BY Prepared by Economic Alternatives Pty Ltd October 2014 Contents List of acronyms ........................................................................................................................................................ 2 List of tables .............................................................................................................................................................. 3 List of graphs ............................................................................................................................................................. 4 Executive summary and recommendations ................................................................................................................ 5 1 Introduction ................................................................................................................................................... 17 1.1 A decade of regulatory reform and challenge for the future ......................................................................... 17 2 Background ................................................................................................................................................... 19 2.1 About the RAC ..................................................................................................................................... 19 2.2 RAC Taxi Review ................................................................................................................................ 19 2.3 Terms of reference ................................................................................................................................ 19 2.4 The Authors .......................................................................................................................................... 19 2.5 Methodology of the Review ................................................................................................................. 20 3 User perspectives on taxis ............................................................................................................................. 21 3.1 RAC Taxi Industry Research ................................................................................................................ 21 3.2 RAC Older Driver Survey .................................................................................................................... 22 3.3 Department of Transport Taxi User Surveys ........................................................................................ 23 3.4 Users of Wheelchair Accessible Taxis ................................................................................................. 25 3.5 Overall perspective on user views ........................................................................................................ 26 4 Past inquiries relevant to the taxi industry in Perth and WA ........................................................................ 27 4.1 BSD Consultants, Review of the Western Australian Taxi Industry, Final Report, August 1999. ........... 27 4.1.1 Government response to the BSD report ..................................................................................... 30 4.2 Report on Review of the Taxi Industry Regulatory Structure in the Perth Metropolitan Area, June 2003 31 4.3 Economic Regulation Authority of WA, Inquiry into Microeconomic Reform in Western Australia, Final Report, 30 June 2014 ............................................................................................................................... 33 4.4 Victorian Taxi Industry Inquiry ............................................................................................................ 35 4.5 Australia, Competition Policy Review, Draft Report, September 2014 ................................................ 40 5 Industry structure and regulation ................................................................................................................... 41 5.1 The two-tier industry ............................................................................................................................ 41 5.2 The supply side of the taxi industry ...................................................................................................... 41 5.3 The demand side of the taxi industry .................................................................................................... 45 5.4 Licensing in more detail ....................................................................................................................... 47 5.4.1 Metropolitan licences .................................................................................................................. 48 5.4.2 Country taxi licence .................................................................................................................... 51 5.4.3 Omnibus Licence ........................................................................................................................ 53 5.4.4 Private Taxis ............................................................................................................................... 55 6 Taxi accessibility: availability and affordability ............................................................................................ 57 6.1 Metropolitan area licence number restrictions ...................................................................................... 57 6.2 Maximum fares ..................................................................................................................................... 62 6.4 Driver issues ......................................................................................................................................... 69 6.5 Removing quantitative restrictions on licensing ................................................................................... 70 7 Other taxi mobility issues: safety, wheelchair accessibility and sustainability .............................................. 72 7.1 Safety .................................................................................................................................................... 72 7.1.1 Purpose Built Taxis ..................................................................................................................... 73 7.1.2 Child restraints in Taxis .............................................................................................................. 74 7.2 Wheelchair accessibility ....................................................................................................................... 75 7.3 Sustainability ........................................................................................................................................ 78 8 The pre-booked market ................................................................................................................................. 81 8.1 Taxis and SCVs .................................................................................................................................... 81 8.2 Smartphone applications ....................................................................................................................... 83 8.2.1 Recent market entrants ................................................................................................................ 86 8.2.2 International responses to smart phone applications and ride sharing ......................................... 86 9 Experience of other jurisdictions in removing quantity restrictions on licences ............................................ 89 10 The way forward: Recommendations ........................................................................................................... 94 Appendix 1: Summary of the current legislative framework affecting taxis in Western Australia ........................ 103 Appendix 2: Overview of the development of WA taxi legislation and quantitative restrictions on licences ........ 111 1 List of acronyms Apps. Smart phone applications BSD BSD Consultants DoT Department of Transport, Western Australia ERA Economic Regulation Authority of Western Australia ESC Essential Services Commission, Victoria IATR International Association of Transport Regulators IPART Independent Pricing and Regulatory Tribunal, New South wales MPT Multi-Purpose Taxi NCC National Competition Council NCP National Competition Policy PT Private Taxi PSBU Passenger Services Business Unit (of the Department of Transport) PBT Purpose Built Taxi RAC The Royal Automobile Club of Western Australia SCV Small Charter Vehicle TCB Taxi Control Board TDS Taxi Dispatch Service TIB Taxi Industry Board TMC Taxi Management Company TUSS Taxi User Subsidy Scheme VTII Victorian Taxi Industry Inquiry WAT Wheelchair Accessible Taxi 2 List of tables Table 1 Perth taxi user satisfaction 2004-2013 Table 2 Aspects of Perth taxi user satisfaction, 2004-2013 Table 3 Perth Taxi Dispatch Services and taxi company associations Table 4 Demand elasticity estimates by user segment, Melbourne 2012 Table 5 Perth maximum plate and shift lease rates, 2014 Table 6 Perth taxi plate government lease rates, 2014 Table 7 Perth taxi licences by type and ownership as at 1 July 2013 Table 8 Non-metropolitan WA Taxi licences 1999-2014 Table 9 Perth average conventional taxi plate transfer prices 2004-2013 Table 10 PwC Cost model, August 2011 Table
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