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Reforms to the taxi and hire car industry

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 per trip 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, following the passage of the necessary legislation by the Parliament, vehicle licensing requirements will be replaced with a simpler vehicle registration process.

This 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 have greater responsibility  for safety and service delivery.

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. 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 is being 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 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 for licence holders - including a Fairness Fund to targeted financial support - and the provision of ongoing accessible transport services.

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

Legislative changes

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

Stage 1

The first reform bill – the Commercial Passenger Vehicle Industry Bill 2017 - passed Parliament on 10 August 2017. Once the Bill receives Royal Assent it will become law.

The Bill abolished licence fees for taxis and hire cars, introduced the regulation of ride-share providers in Victoria, and established an industry levy framework.

The $1 per trip industry levy will be introduced in 2018 and will contribute to the government's $494 million support package for taxi and hire car licence holders and the provision of ongoing accessible transport services.

Stage 2

A second reform bill to follow later in 2017 will introduce flexible fares, allowing taxis to charge passengers different prices to reflect the type of service they provide once the reform package is fully implemented in 2018.

Taxi fares will continue to regulated throughout the transition period.

Competition between service providers will help drive down fares and additional consumer protections will be put in place to enable passengers to make informed choices.

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.

For more information visit the Taxi Services Commission.

Page last reviewed on 11 August 2017

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