Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

I want to use this opportunity to draw the government's attention as strongly as I can to the current problems facing the taxi industry and the many self-employed small businesses that are part of it. State and federal governments have failed to give taxi drivers a level playing field against unfair competition from Uber. The fact that this company facilitates a network of small businesses operating outside Australian laws has presented significant challenges to regulators at both the state and federal levels, according to Mr David Samuel, the CEO of the Victorian Taxi Association. Uber takes 20 per cent of every trip, and questions remain as to whether they are compliant with Australian taxation laws. This is a company valued at $5 billion, facilitating trips for profit on behalf of its 'partners' in Australia which they claim should be treated differently to other commercial passenger vehicle service providers. Taxi drivers are not afforded a turnover threshold, but collect and pay GST from the first dollar through the fare box. This fits into a bigger picture of the offshoring of profits derived from business in Australia to avoid contributing their fair share to our economy.

Uber, which began in San Francisco in 2009, now operates in more than 50 countries, with 300,000-plus driver partners in the US alone. In Australia it is moving towards 20,000 driver partners. The difference between Uber and many of its competitors is that most of Uber's competitors operate legally within the legal confines of the countries they are in. Uber, on the other hand, is paying for its drivers to ignore local laws. In Australia it is contesting decisions across state and federal jurisdictions. In Queensland driver partners have been hit with more than $1.7 million in fines for providing unlicensed taxi services. Despite it being Uber practice around the world to pay drivers' fines, the fines in Queensland are being disputed and have not yet been paid.

As reported in The Conversation in August:

Uber seems to have made a strategic decision to take the legal hits associated with flouting local regulations, with the view that this is unlikely to land a knockout blow.

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Uber also wants to manipulate regulation that extends well beyond labour law, in order to boost its competitive advantage.

The Conversation outlines:

Uber is in a global fight to win a regulatory environment favourable to its business model. This fight largely relies on ambiguity on how Uber should be defined as a company. Uber steadfastly denies any suggestion that it is a service provider, insisting instead that it's a "technology company" … "seamlessly connecting riders to drivers".

Laws and regulations must address the emergence of what is called the 'electronic hail'. The emergence of this type of product has meant that the distinction between hail and pre-booked work has been significantly blurred. The legislation needs to embrace and define the term 'electronic hail', as distinct from a pre-booking or a street hail or a rank hail. Simply imposing hire car regulations upon ride-hail type services is not sufficient. Hire car regulations differ from taxis on the grounds that hire car companies accept only pre-booked services for a different market to taxis and thus have the ability to pre-plan journeys. This is not the case with an electronic hail. Any regulation should be based on the need to address a market failure and to ensure community, passenger and driver safety. Because the model is a hybrid, regulations and hire car regulation need to apply to it. This definition of the product also provides clear justification as to why the price these services charge should be regulated by a maximum fare. Customers are not able to make an informed choice because of the immediacy of the booking. Furthermore, paying more will not necessarily see the service delivered in a more timely fashion, because during periods of high demand the wait times are constrained by supply across all services. Employing surge pricing in periods of high demand is an abuse of market power and is price gouging because the product the customer receives does not alter in either quality or timeliness, despite them being asked to pay more.

As the taxi association has said on numerous occasions, if fair regulation were to be removed, the biggest loser would be the consumer burdened with higher prices. The requirement in relation to ride hailing has to enable taxis to be allowed to compete. Taxi drivers deserve better than the unfair competition and insecure future to which they are subject. I urge both federal and state governments in their examination of this to make sure that the many small businesses who have invested very large sums of money in relation to taxis have an opportunity to have a secure future. They are entitled to this.

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