LEGISLATIVE ASSEMBLY OF THE NORTHERN TERRITORY Public Accounts Committee Inquiry into Taxi Licensing and Subleasing November 2017 Contents Contents Chair’s Preface .........................................................................................................................5 Committee Members ................................................................................................................8 Committee Secretariat .............................................................................................................9 Acknowledgments ....................................................................................................................9 Acronyms and Abbreviations .............................................................................................. 10 Terms of Reference ............................................................................................................... 11 Key Findings .......................................................................................................................... 12 Recommendations ................................................................................................................ 14 1 Background ....................................................................................................... 16 Origins of the Inquiry .......................................................................................................... 16 Parameters for the inquiry .................................................................................................. 18 Conduct of the Inquiry ........................................................................................................ 19 History of NT industry ......................................................................................................... 20 Deregulation ....................................................................................................................... 22 Reregulation ....................................................................................................................... 23 National Competition Policy ............................................................................................... 25 The Current Industry .......................................................................................................... 26 Criteria to hold a licence ................................................................................................ 26 Industry composition ..................................................................................................... 27 Industry reviews.................................................................................................................. 28 2 Jurisdictional Comparison ............................................................................... 30 Western Australia .......................................................................................................... 30 South Australia .............................................................................................................. 31 Tasmania ....................................................................................................................... 32 Queensland ................................................................................................................... 33 Victoria .......................................................................................................................... 34 Australian Capital Territory ............................................................................................ 35 New South Wales .......................................................................................................... 36 3 Subleasing and Bailment .................................................................................. 38 Bailment Agreements and Network Management .............................................................. 38 Bailment Agreements .................................................................................................... 38 Network Management ................................................................................................... 39 Subleasing .......................................................................................................................... 40 Impacts of subleasing.................................................................................................... 41 Legality of subleasing .................................................................................................... 42 Challenges in regulating subleasing ............................................................................. 46 Industry perspectives on subleasing .................................................................................. 47 4 Licence Allocation ............................................................................................ 50 Ballot ................................................................................................................................... 50 Policy 5.20 .......................................................................................................................... 52 Licences reallocated under Policy 5.20......................................................................... 54 Ramifications of Policy 5.20 .......................................................................................... 55 Industry perspectives on licence allocation ........................................................................ 57 3 Inquiry into Taxi Licensing and Subleasing 5 The Cap ............................................................................................................. 59 History and current status of the cap .................................................................................. 59 Impact of the cap ................................................................................................................ 60 Debates on market entry regulation ................................................................................... 61 Licence as an investment .............................................................................................. 61 Optimum taxi levels ....................................................................................................... 63 Excessive entry ............................................................................................................. 65 Driver earnings .............................................................................................................. 67 Safety and service standards ........................................................................................ 69 Consumers .................................................................................................................... 70 Political challenges ........................................................................................................ 71 Industry perspectives on the cap ........................................................................................ 73 6 Ancillary Issues Raised in the Inquiry ............................................................. 75 Strengthening taxis’ tourist services ................................................................................... 75 Service and safety standards ............................................................................................. 75 Inadequacy of taxi services for wheelchair users ............................................................... 77 Regulation of bailment agreements .................................................................................... 77 Fraudulent use of BasicsCard ............................................................................................ 77 Illegal purchase of alcohol for passengers ......................................................................... 78 7 Conclusion ........................................................................................................ 79 Future regulation ................................................................................................................ 80 If the cap is removed .......................................................................................................... 82 Eligibility requirements for licences ............................................................................... 82 Maintaining service standards ....................................................................................... 83 If the cap is maintained ....................................................................................................... 84 Subleasing in a restricted market .................................................................................. 84 Allocation of licences in a restricted market .................................................................. 85 Communication and the need for analysis ......................................................................... 86 Regulatory Stability ............................................................................................................. 88 Appendix 1: Jurisdictional Comparison Table ................................................................... 89 Appendix 2: Public Hearings ................................................................................................ 90 Alice Springs – 20 July 2017 ........................................................................................