Taxi Owner/Plate cost Discussion

[MEL_Traveller]

All of that may be true. But you need to recoup the $500,000 cost of your licence somehow. I suspect that’s from an expected % return on investment... which must be at least 5-10%? where does $50,000 come from?

 

[Vic]

All of that may be true. But you need to recoup the $500,000 cost of your licence somehow. I suspect that’s from an expected % return on investment... which must be at least 5-10%? where does $50,000 come from?

$50,000 is chicken feed for a taxi, that's only $136 per day for a year. Taxis are a 24/7 business, if you can get drivers. The owner of the licence doesn't worry about return when they're asleep in bed. The driver on the other hand...

 

[Melburnian1]

Pay the stated fare only.

I don't know about NSW, but that's very bad advice for Victoria.

In the latter, one has to pay the fare the driver states. One can then take up the matter with the regulator.

 

[MEL_Traveller]

$136, based on 30 trips a day? That’s almost $5 extra for me as a passenger. I don’t feel value for money.

 

[Melburnian1]

For many years the taxi association ensured that plate fees remained high with 'contributions' to all political parties. Like all good scams it has come to an end so now the gouging is even more prevalent and downright blatant.

CabCharge is the most obvious example of legalised scamming in the taxi industry....

A huge thank you to Professor Allan Fels who led the Victorian taxi inquiry that essentially put an end to such scams.

Cabcharge is now receiving lower fees thanks to him. Not before time.

 

[Vic]

$136, based on 30 trips a day? That’s almost $5 extra for me as a passenger. I don’t feel value for money.

Umm, there is not extra for you as a passenger. this comes out of the regulated capped fare. The taxi has to collect $136 for the owner per day to get the return you're talking about. 30 trips per day with only the flagfall is $108. The owners return on the licence is easily covered and is a minor part of what you pay for a taxi.
30 $10 taxi trips will cover the owner's costs. But the driver will be taking home less than $150 a day.

Next time you're in a taxi ask the driver about his contract - who pays costs, their commission, who cleans the car, etc.

 

[Melburnian1]

...

Next time you're in a taxi ask the driver about his contract - who pays costs, their commission, who cleans the car, etc.

Many of us don't intend to 'be in a taxi.' I haven't - in Australia - for five years. In a developed country, the last time I was in a taxi was in Canada and that was only because of those with whom I was travelling. If it was me alone, I had the time to walk.

 

[Forg]

All of that may be true. But you need to recoup the $500,000 cost of your licence somehow. I suspect that’s from an expected % return on investment... which must be at least 5-10%? where does $50,000 come from?

Don't forget that the $500k isn't just loss, and in fact it appreciates so that when you sell said license you get more than the $500k back. Makes the calculation a bit more complicated, but it means the passengers don't actually pay for that whole amount directly.

Many of us don't intend to 'be in a taxi.' I haven't - in Australia - for five years. In a developed country, the last time I was in a taxi was in Canada and that was only because of those with whom I was travelling. If it was me alone, I had the time to walk.

By using Uber etc, I always feel like I'm leveraging the driver's gullibility &/or desperation … I know, it's their choice, but I still don't feel super comfy about it. Won't stop me doing it, but that reservation is always bothering me.

 

[Hvr]

All of that may be true. But you need to recoup the $500,000 cost of your licence somehow. I suspect that’s from an expected % return on investment... which must be at least 5-10%? where does $50,000 come from?

Why should it be a guaranteed investment? Like anything we spend money on, it's speculation and we (should) do a risk assessment before spending. All industries are subject to disruption and those that rely on government policies to keep out competitors are at high risk.

The taxi industry has never been about providing a customer service. Customers were (are) a necessary evil to make money.

 

[amaroo]

Why should it be a guaranteed investment? Like anything we spend money on, it's speculation and we (should) do a risk assessment before spending. All industries are subject to disruption and those that rely on government policies to keep out competitors are at high risk.

The taxi industry has never been about providing a customer service. Customers were (are) a necessary evil to make money.

Plenty examples of this being in play. Car manufacturers, dairy and forestry industry, renewable energy, even pink batts... the list is probably endless.

 

[Melburnian1]

Why should it be a guaranteed investment? Like anything we spend money on, it's speculation and we (should) do a risk assessment before spending. All industries are subject to disruption and those that rely on government policies to keep out competitors are at high risk.

The taxi industry has never been about providing a customer service. Customers were (are) a necessary evil to make money.

Absolutely. And (in Victoria, can't speak for NSW) fewer licences have had the oft quoted figure of '$500K' paid for them.

It was and remains wrong for taxi licence plate holders to have expected/expect huge compensation when arrangements changed. Lots of government decisions affect many millions of Australians (such as increased taxes if one particular party becomes the Federal govt shortly) but we don't individually get compensated for every alteration. (Nor should we).

I assume among other motives people go into businesses like taxis because they believe they can make an excellent return. Too bad, Sunshine, if a government inquiry's recommendations are to alter arrangements that have generously benefited a sector like that for many, many years and made some people multi millionaires for not a lot of risk.

 

[Forg]

Plenty examples of this being in play. Car manufacturers, dairy and forestry industry, renewable energy, even pink batts... the list is probably endless.

Isn't the existence of a company or corporation (or whatever the correct terms are) purely about making a profit, anything else is about being seen to meet laws or marketing in order to make that profit?

 

[Vic]

Many of us don't intend to 'be in a taxi.' I haven't - in Australia - for five years. In a developed country, the last time I was in a taxi was in Canada and that was only because of those with whom I was travelling. If it was me alone, I had the time to walk.

Well that's just my point that people are not prepared to pay for service for public transport, but are cost focused. Do you expect a brilliant service from a taxi driver who doesn't know if you're going to do a runner or bash and rob them.
I'm the same in being cost focused, and it is much more complex for me, in that I'll compare all available options taxi, uber, airport parking and bus/train then factor in the cost of my time and if I'm going to drink on the plane and then decide.

Last time I was in an Uber the guy put me right in front of a car that had to slam on the brakes. I find uber has poor driving skills and can barely follow a map, and don't ask for directions or can't understand directions.. So much so that the extra $10 for a taxi might be worthwhile in terms of my life. Taxi drivers can have poor driving skills but they at least follow directions.

I also consider the situation of the driver. Some one mentioned leveraging their desperation. Walking from Mascot to the airport isn't worth my time compared to the $14 gate fee, or giving a taxi/uber driver a fare. invariably I can also take the deduction to reduce my cost.

Anyway, I like to understand the limitations and factors affecting people before passing judgement.

 

[Vic]

Why should it be a guaranteed investment? Like anything we spend money on, it's speculation and we (should) do a risk assessment before spending. All industries are subject to disruption and those that rely on government policies to keep out competitors are at high risk.

The taxi industry has never been about providing a customer service. Customers were (are) a necessary evil to make money.

Plates are a secondary market, basically nothing to do with the fares. Taxis are public transport, the service is being available to get you home safely (yes safely can be debated) at 3 am when there are no other options. That's the service. not bottles of water not mints not anything else. You're paying to have the driver sit around all night waiting.

 

[Lynda2475]

Also the taxi license is a business cost so you can bet the plate owner is claiming the cost as a tax deduction along with the interest on any loan used to purchase it. I dont have much sympathy, no investment is guaranteed and if they kept their cabs clean, didnt rip people off for paying by card and other meter scams there wouldn't have been a market opening for ride share.

 

[Vic]

Don't get confused between the plate owner and the driver. the driver controls the meter. Cabcharge is not the driver or the owner. Don't want to pay 10%, use cash.
A good starting point is to actually understand the industry before passing judgement.

 

[Lynda2475]

I have used taxi extensively over the last 25 years, until uber became my preferred option for cleaner more comfortable ride, and cashless payment without the ability to have hidden charges added.

I used to have a regular local taxi driver, i used him for well 15 years for work/airport trips always called his mobile direct, he was the owner and a driver for 1 of the shifts each day. He told me most owners (in NSW at least), drive their own taxi and then have 1-2 casual drivers who rent their taxi for the time the owner isn't driving it. The owners tend to take the profitable morning shifts and relief/casual driver get the arvos and late night shifters.

The cost of the taxi plate is totally on the owner, they do claim this as an operating cost, same as insurance etc. If there is a cab charge provided credit card terminal then this is usually the owners as well. You find that most of the casual driver, pay a set amount to have the car for their shift then get to keep the fares above that amount, less cabcharge fees if they use the cab charge machine, but more and more casual drivers provide their own credit card facility on their phone, they only grudgingly use the fixed terminal in the taxi if there are reception issues etc.

As a general rule I dont have more than $20 in my wallet, its safer to pay electronically and also easier to do expense claims when the receipt is emailed to you like Uber does, My employer and many other prefer Uber for business as there isn't an inflated surcharge for credit card payments, expense report filed automatically and fixed price means the driver cant add faux charges.

If drivers and owners really want to have a go at someone it should be the software developer for the 13Cabs app and their in cab booking screens - they are largely useless. I put all the same info into 13Cabs app as I do to Ube app. But taxi driver only ever seem to receive the suburb (never the full st addy) and I end up having to explain again exactly where I want to go and then usually also have to navigate for them, whereas the uber gets all the details (full address, navigation etc). the taxi app also frequently fails and asks you to call = fail.

Taxis had a monopoly for so long , but their union/cabcharge/taxi companies etc never bothered to invest their huge profits into keeping up with the times wrt reliable booking app, training their drivers etc.

There are die hard fans who will stick with cabs as is their right, just as the rest of us have the right to move with the times and use the superior service.

 

[Vic]

I have used taxi extensively over the last 25 years, until uber became my preferred option for cleaner more comfortable ride, and cashless payment without the ability to have hidden charges added.

I used to have a regular local taxi driver, i used him for well 15 years for work/airport trips always called his mobile direct, he was the owner and a driver for 1 of the shifts each day. He told me most owners (in NSW at least), drive their own taxi and then have 1-2 casual drivers who rent their taxi for the time the owner isn't driving it. The owners tend to take the profitable morning shifts and relief/casual driver get the arvos and late night shifters.

The cost of the taxi plate is totally on the owner, they do claim this as an operating cost, same as insurance etc. If there is a cab charge provided credit card terminal then this is usually the owners as well. You find that most of the casual driver, pay a set amount to have the car for their shift then get to keep the fares above that amount, less cabcharge fees if they use the cab charge machine, but more and more casual drivers provide their own credit card facility on their phone, they only grudgingly use the fixed terminal in the taxi if there are reception issues etc.

As a general rule I dont have more than $20 in my wallet, its safer to pay electronically and also easier to do expense claims when the receipt is emailed to you like Uber does, My employer and many other prefer Uber for business as there isn't an inflated surcharge for credit card payments, expense report filed automatically and fixed price means the driver cant add faux charges.

If drivers and owners really want to have a go at someone it should be the software developer for the 13Cabs app and their in cab booking screens - they are largely useless. I put all the same info into 13Cabs app as I do to Ube app. But taxi driver only ever seem to receive the suburb (never the full st addy) and I end up having to explain again exactly where I want to go and then usually also have to navigate for them, whereas the uber gets all the details (full address, navigation etc). the taxi app also frequently fails and asks you to call = fail.

Taxis had a monopoly for so long , but their union/cabcharge/taxi companies etc never bothered to invest their huge profits into keeping up with the times wrt reliable booking app, training their drivers etc.

There are die hard fans who will stick with cabs as is their right, just as the rest of us have the right to move with the times and use the superior service.

A couple of random points.

Morning shifts aren't always the most profitable. think Friday and Saturday night...
Arrangement between driver and owners can vary widely. Arrangement where the driver pays a fixed price has significant fatigue issues, and the driver has to pay operating costs.
The taxi plate is a capital expense and hence the tax office would be very interested in someone claiming it as an operating expense.
Cabcharge was traditionally part of the radio network fee. So the terminal/cabcharge has to be purchased with the system that assigns jobs to the taxis. Cabcharge established their monopoly by linking with the radio networks - yellow/Black and white. It is extremely difficult for a taxi to make money from hails alone where they cannot take cabcharge vouchers used by almost all business/government departments.
Taxi union???? - hahahahahahahahahahahahahahahahahahahahahahahahahahaha What Union? The drivers get screwed - there is no union.
The taxi industry is very fragmented with multiple players who occupy their own space in the whole process. The drivers are powerless, the owners are beholden to the radio networks, and except in limited case like when you ring the driver/owner direct providing great service does not create differentiation to attract good customers. No one is going to wait for the owner they know if there is a cab available immediately. The radio networks just collect their fees and have no skin in the game to reinvest in the cars on the road.

So yeah, the taxi industry only has themselves to blame, but there are multiple factors to blame that are beyond the control of individual players. Plus of course customer behavior/expectations are to blame as well.

Personally I've never faced death in a taxi, I have in an uber. Trying to kill me is not what I call superior service.

 

[Lynda2475]

Friday and Saturday night

Maybe but the owner drivers I spoke to avoid these as it means dealing with drunks and a higher chance of not getting paid. Early morning jobs are mostly business types who are expensing the ride and less like to throw up int he car or skip out without paying.

Taxi union

NSW TAxi Council and the TWU represent taxis in NSW.

great service does not create differentiation to attract good customers.

Well i disagree when it comes to the booking process, having a reliable easy to use app is key to getting bookings and repeat business. The coughpy 13Cabs app was the final straw in pushing me to use Uber all the time (except when there is a bad surge) - 131cabs kept saying my address isn't valid or failed to connect to server. This is something the taxi mob can control if they cared about customer experience.

Personally I've never faced death in a taxi, I have in an uber. Trying to kill me is not what I call superior service.

The opposite is true for me - last taxi i took I was scared for my life and when i was paying driver told me he only had 1 point left on his license - i'm surprised he hasn't lost it.

Be honest Aussie cabbies aren't exactly at the level of professionality of say a London Black cab.

 

[moa999]

Successive governments (and the taxi mafia/unions) caused the issue by allowing plate prices to become so excessive, in part by restricting the supply of new plates.

This meant a substantial amount of each fare was going to plate rental (or interest) etc rather than to actual services or the drivers back pocket.

Now of course these plates have fallen drastically in value costing some people what they thought were their retirement savings - I've got some sympathy for these people, albeit this is no different to a business failing or house price falling and I don't think governments ever guaranteed prices.

I certainly have no sympathy for the listed Cabcharge that owned thousands of plates.

Mind you the 10% that Cabcharge takes (from the passenger) plus some radio/dispatch fees is nothing compared to the 30% that Uber takes.