The NSW government is developing a proposal for a billion-dollar compensation package for the state’s taxi licence owners to address the financial havoc wreaked upon their industry since legalisation of ride-sharing platforms.
The Australian understands a package being drafted for the Perrottet government’s expenditure review committee is likely to total $1bn for the state’s roughly 5000 licence holders, equating to about $200,000 a licence.
The scheme is to be funded, at least in part, by an ongoing levy, known as the NSW passenger service levy, which has been applied to Uber since 2018 and amounts to $1 per completed trip.
The compensation package is substantially higher than had previously been floated by Transport for NSW officials, who told an industry webinar in September that payouts could include $50,000 a licence, with payouts capped to two licences.
According to evidence given to a NSW parliamentary inquiry in 2020, there are between 4000 and 5000 taxi licence owners in NSW and about 6700 licences, with the value of these having dropped substantially since ride-sharing platforms were legalised in 2016. The inquiry heard transfer and lease values of licenses in Sydney had dropped 80 per cent as a “direct result of the NSW government’s handling of rideshare illegal entry and operation in the market and subsequent regulation”.
In Sydney, licence transfer values have been stable above $70,000 since April 2019 and up to $105,000, compared with $333,000 in July 2015, the inquiry noted, but some licences, such as wheelchair accessible licences, had no transferable interest.
Transport Minister David Elliott declined to comment but told parliament during a budget estimates committee hearing in March that it was his preference to be “more generous” with the taxi industry and increase previous compensation targets floated by the government.
“It is my view we should be more generous,” he said. “I do not want to see people finishing their working life as taxi drivers unnecessarily burdened by financial implications of point-to-point – of Uber. I want to make sure that they know that the government has got their back.”
The government’s proposal has involved consultation with not only the taxi industry but also NSW Labor MPs, although ERC approval remains critical to securing the compensation being sought by the Transport Minister.
Transport secretary Rob Sharpe told the same budget estimates inquiry that the compensation and reforms would require legislation to be introduced to parliament.
NSW Taxi Council chief Martin Rogers said he welcomed the “sympathetic ear” of Mr Elliott and the need to resolve the matter of taxi licence compensation.
“We welcome continued conversation around the appropriate compensation value,” he said, adding there was evidence of cross-party support in parliament to address the matter.
“The fair and proper compensation has to reflect the loss of values of taxi licences since 2015,” he said.
Labor transport spokeswoman Jo Haylen said she was encouraged by the developments but taxi licencees should not have had to “wait this long for fair compensation … These licenses were sold as government-backed investments and then people who had worked hard all their lives woke up one day to find the government changed the rules and made those investments worthless. It’s encouraging that there is finally some positive news for the taxi licencees after years of uncertainty; the government needs to get a fair compensation package sorted so people can get on with their lives.”
This article was published in The Australian by Yoni Bashan - NSW Political Correspondent and republished by the NSW Taxi Council.