Changes to taxi and hire car regulations

The Victorian Government is introducing Australia's first fully open and competitive commercial passenger vehicle regulatory model, which will put passengers first.

Taxi, hire car and rideshare services will operate under an aligned set of rules for the first time, creating a truly level playing field for all industry participants that will drive competition and innovation.

This will drive greater consumer choice, better service, and will place downward pressure on fares.

The safety of passengers will be strengthened by the accreditation of all drivers including rideshare drivers, which involves police checks. Industry will be held to account for driver training and education.

Operating a taxi or hire car will be simple and more affordable, with annual licence fees of up to $23,000 removed.

A $2 levy on the industry will help support a fair and reasonable transition package, as well as the ongoing provision of accessible point to point transport services.

What's changing?

Simpler vehicle licensing requirements

Under the final framework, vehicle licensing requirements will be replaced with a simpler vehicle registration process.

Thi will make it easier for service providers to enter and compete in the market. More competition means:

  • more choice
  • shorter wait times
  • better value
  • improved service standards.

More accountability for Network Service Providers

Providers of commercial passenger vehicle services booked on the phone or via an app, including taxi networks, hire car businesses and ride-share booking companies, will be made responsible for safety and service delivery.

The Taxi Services Commission will require all Network Service Providers to be accredited, so they can be held to account for these responsibilities.

All drivers must be accredited

The Taxi Services Commission now requires all drivers, including ride-share drivers, be accredited, which includes passing police, medical and driving history checks, and being subject to ongoing criminal data matching. Some additional requirements for taxi drivers will remain, such as having a valid identification card. The Government will continue to work with Victoria Police to ensure the safety of passengers.

Removing the Knowledge test

The knowledge test has been removed and will be replaced with a system of industry accountability for driving training and induction.

Flexible fares

Fare structures will be progressively opened up to allow the industry to charge passengers differentiated prices that reflect the type of service they provide.

Competition between service providers will help to keep fares as low as possible and additional consumer protections will be put in place to enable passengers to make informed choices.

Supporting the transition

Support package

From 2018 all Network Service Providers and other commercial passenger vehicles businesses will be charged a levy equivalent to $2 on all commercial passenger vehicle trips.

The levy will replace annual licence fees - currently up to $23,000. Combined with simpler licensing requirements, this should considerably reduce the cost of operating a taxi, allowing cheaper fares for passengers.

The levy will contribute to the comprehensive support package and the provision of ongoing accessible transport services

From 30 November, taxi and hire car licence holders can apply for assistance from the Fairness Fund.

Find out more about the Fairness Fund and other support services.

Next steps

The changes are complex and require substantial legislative change, so they will be introduced over a two year period, because we want to make sure we get this right for the taxi and hire car industry, the ride-share industry, and for the entire community. Reform will be delivered through two sets of legislative change.

Stage 1

Early 2017, initial amendments will be made to the Transport Act to facilitate ride-share services and introduce the $2 levy framework.The levy will contribute to the comprehensive support package and the provision of ongoing accessible transport services. 

Stage 2

Mid 2017, the final legislative framework will be introduced for implementation by early 2018.

Once fully implemented, these changes will provide a level playing field for the commercial passenger vehicle industry by lowering barriers to entry and removing excessive vehicle licensing requirements — no other jurisdiction has gone this far. Safety outcomes will continue to be a key focus, and will be supported by laws that hold the industry to account.

The government will consult extensively with key stakeholders affected by the changes.

For more information visit the Taxi Services Commission.

Fact sheets

Page last reviewed on 19 December 2016

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