The Taxi Industry has Just What it Deserves

Section: Members Highlights / WTA Blog
11 December 2015 | Australian Taxpayers’ Alliance / Australia

The Daily Telegraph, Australia

The Taxi Industry has Just What it Deserves

by Tim Andrews

WHEN the first automobile hit the streets of Sydney, investors in horse and carriage companies didn’t get a penny in compensation.

Australia embraced the car and has led the world in embracing all new technologies, whether they be digital cameras, smartphones, or digital downloads. Obsolete industries from camera-film sellers and typewriter salesmen to BetaMax video store owners were never bailed out by the NSW taxpayer.

So why is it that today, with the ­introduction of Uber, Airbnb, Freelancer, Airtasker, and other new technologies making our lives easier, politicians want to tax us to bail out obsolete technologies?

The taxi industry is no different to the hundreds of other businesses faced with the inevitable task of adapting or risking something new and better coming along.

This is an industry characterised by bad service, exorbitant prices, and a complete lack of care for consumers. We have all been in dirty cabs with rude drivers who insist on taking the “scenic” route, ripping us off — and then demanding an extra 10 per cent just to use a credit card.

Now that technology has given us an alternative, with safe, clean, reviewed, and GPS-tracked UBER, the rivers of gold that the cab monopoly has received from gouging NSW consumers is drying up. Have they tried to improve? Have they tried to provide better services? No, they have simply tried to get the government to ban their competition, and continue their closed shop monopoly.

It’s expected that within weeks the NSW government will finally give in to public pressure and announce it will legalise Uber. And about time. But they are also considering imposing a supertax on us, the consumer, just to pay off Cabcharge.

Up to 1000 taxi plates in NSW are controlled by Cabcharge, a multi-million dollar corporation that the Federal Court and Australian Competition and Consumer Commission found guilty of gouging consumers. They were fined $14 million just a few years ago for unethical practices.

Yet the NSW government is seriously considering a new supertax, paid for by us, to bail them out.

We are going to pay a new tax to give money to these people. It seems the only thing Cabcharge can do well is pay for great lobbyists.

If I made a huge loss on the stock market with a bad investment I wouldn’t go running to the government for a bailout. Why is the government even considering bailing out investors in the failing taxi industry? When Kodak went bust the shareholders didn’t get a handout from the taxpayer. Nobody compensated BetaMax shareholders for ­investing in a less popular product. Nobody gave Sony a taxpayer ­funded handout when Walkmans ­became a thing of the past.

The answer to the challenges of new disruptive technology should not be to ask taxpayers to fork out their hard-earned cash to compensate the industries that have failed to keep up. The answer is to let the market do what it does best.

Consumers have been penalised by the taxi industry for decades. The NSW public shouldn’t foot the bill for an industry’s failure to innovate. Any tax on either the consumer or a new market entrant like Uber, just to pay out corporations who have failed to provide a good service, is not just bad economics. It’s downright immoral.

Tim Andrews is executive director of the Australian Taxpayers’ Alliance.