VIC Government adding $2 fee per Uber trip, funding Taxi’s old business model

If you've got a bad business model, its not Uber's fault.

Uber

Technology has meant ordering a ride from A to B has become easier, faster and better. Thanks to ride sharing companies like Uber, the transportation industry and specifically taxi services has received a well overdue disruption. The Victorian Government has today announced all commercial passenger vehicle providers charged a levy equivalent to $2 per trip, translation, you get slapped with a $2 fee each time you ride Uber.

This money goes to pay for the out of date, out of touch Taxi industry that treats their customers like mugs. From the unavoidable booking fees, to poor customer service in the cab, to drivers who intentionally take inefficient routes to bump the cost, the Taxi industry deserves nothing. Instead the Andrews Labor Government are paying the Taxi services, a ridiculous $378 million to ‘provide fair and reasonable assistance to licence holders to help them transition to the new legislative framework.’ Feel free to interpret this as compensation for being anti-progress.

This madness doesn’t stop there with a further $75 million Fairness Fund to provide targeted support to industry participants experiencing immediate financial hardship as a result of these changes. Those changes are an industry that chose to protest rather than compete with technology to offer their customers a better service. This is all kinds of outrageous when you consider any company engaging in Taxi services that fails to stay with modern times, is no better than the bricks an mortar retailer that ignores online shopping. If you have a bad business model in 2016, it should never be the job of the Government to artificially keep you afloat.

The only positive out of the announcement is that the Government’s draft legislation (to be introduced into Parliament this year) will reduce the hire car licencing fee to zero. This is what Taxi companies should have campaigned for, not an artificial restriction on those startups that think outside the box and prioritise customer service above profits and out of date business practices. A second piece of legislation will be introduced into Parliament next year which will enable the long term reform.

CiSzUPrUgAQD3vD

To date, Taxi driver’s had to complete the ‘Knowledge Test’ which will now be done away with as its been deemed ineffective, inefficient and costly, to be replaced by a simple system of industry accountability for all drivers. If you’re wondering how Uber driver’s got away with delivering services without such a critical test, that’s because they leverage live navigation data to get to the destination in the most optimal way possible, avoiding road works, congestion and other delays. This frees the driver to offer services in locations they’re not familiar with, its 2016 and this is what technology should be leveraged for.

The reality is that a costly centralised call operator team to book rides is not done in a much more efficient customer driven app experience. There’s not financial transactions that occur in the vehicle which eliminates the issues around clients running and skipping on fares and immediately makes the ride safer. The bi-directional rating system is another invention that places modern ride-sharing options years ahead of what’s offered by Taxi companies.

If you haven’t used Uber before, do yourself a favour and take a ride before the new $2 surcharge comes into effect.

More information at Premiere.vic.gov.au 

Categories
Travel