ADELAIDE; From The Advertiser by Miles Kemp,
Taxi plate values have plummetted since Uber’s entry into the market, prompting legal action against the ride sharing giant.
TAXI plate values have dived more than 75 per cent and annual leasing income has more than halved since Uber hit SA roads, prompting the Taxi Council to plan legal action against the ride-sharing giant.
The price of plates has dropped from a peak of $346,000 in 2013 to $80,000 this year, and annual leasing incomes have fallen from $24,000 to $10,000, hitting investors hard. The Taxi Council of SA has hired a lawyer to investigate joining a class action seeking hundreds of millions of dollars in compensation.
Council president Steve Savas said it had engaged lawyer Stephen Kenny to investigate joining the Victorian-based class action that dates back to Uber’s entry into the marketplace.
The legal action is based on the alleged illegal operations of Uber, before ride sharing providers were legally allowed into the SA market in July 2016.
The Taxi industry’s action is based on the alleged illegal operations of Uber, before ride sharing providers were legally allowed into the SA market in July 2016.
In early 2016, The Advertiser reported that ride sharing drivers were working in Adelaide and charging customers, setting up a conflict with the taxi industry.
But the Taxi Council alleges they were operating in SA as early as 2014.
The Taxi Council argues there were direct losses in income for taxi drivers and it also pressured the former State Government to legalise their operations. Mr Savas said even when an act of Parliament made Uber legal, vehicles were allegedly not being properly accredited as late as August last year.
The global taxi-disrupting giant has not only been blamed for plummeting revenue for taxi drivers.
The council argues “unfair” competition has also destroyed the value of the industry’s main assets – taxi vehicle licence plates, which are leased to drivers.
Mr Savas said the council was referring many taxi plate owners to job agencies because they could no longer live on the income from their investment. The Taxi Council has kept data on the sale price of taxi licences since the late 1980s, and since 1998 it has been the government-nominated official transfer organisation for licences.
This year, one licence was sold for $70,000 and the average has been $80,000, with one selling for a high of $105,000.
Mr Savas said in 2013, before Uber, the average licence was sold for $346,000.
Many older South Australians who had been involved in the industry used them as investments for their superannuation.
“ Plate owners’ annual income has dropped from around $24,000 to $10,000 on average, having a direct impact on self-funded retirees,’’ he said.
“Some owners no longer can repay the loans taken out to purchase the licence.’’
The industry is also angry that the former State Government knowingly sold licences to new operators in the market for as much as $320,000, while also planning to legalise Uber.
Uber would not respond to specific complaints by the Taxi Council, but a spokeswoman said: “Many thousands of South Australians have embraced Uber as a reliable choice to get from A to B and the Government has recognised ride sharing as part of the transport mix in the state”.
Mr Kenny alleged: “There was a time when Uber were knowingly operating illegally and we are told the company was paying the fines of the drivers when they were caught, so as part of the action we are keen to talk to any driver who had a fine paid prior to July 2016 when it made legal to operate as a ride share driver’’.
Although the crisis in the industry was under the watch of the previous State Government, a spokesman for the current government said there were no changes planned to the existing system, except to “reduce costs for taxi operators and reduce unnecessary regulation’’.
Daphne and Charlie Skordas invested in a taxi plate in 1996. Its value dropped from a peak of $346,000 to the current $80,000. Picture: Bianca De Marchi
Daphne, 78, and Charlie Skordas, 82, are among hundreds of single-plate owners who invested before Uber arrived as part of their superannuation. Mrs Skordas said the couple had bought their plate in 1996 for $160,000 and it had increased in value to $346,000, but it was now worth $80,000.
Weekly rental earnings from their licence having dropped from a high of $500 to a maximum of $200.
“We are just lucky we are now old enough to get the pension because we wouldn’t survive,’’ she said.
“That was our super. We never drive the car, that was our investment.’’
In comparison to the losses, a $1 levy on taxi passengers introduced in 2017 to compensate drivers and owners for the destruction of their industry only delivered a one-off $30,000 lump sum and a $50 weekly payment.
Taxi plates were previously valued so highly because the industry was one of the most strictly regulated in SA by the State Government. There are very few vehicles allowed on the road, with previously little competition, and owners and drivers are held to high standards by the Transport Department.
But global ride share firms, including Uber, are taking increasing market share by undercutting taxis, and because there is no cap on their numbers, no regulation of charges, they use cheaper private cars and have fewer checks on their standards.
In July this year, SA had 1035 general taxis, 102 access taxis, 3297 ride share vehicles and 276 chauffeured vehicles.
In Victoria, a class action being run by Maurice Blackburn and a group called the Commercial Passenger Vehicles Association is seeking more than $500 million from Uber, backed by a $20 million legal fighting fund.
The case is seeking to take advantage of the time Uber drivers allegedly operated illegally in Melbourne before the government allowed their entry into the market.
ADELAIDE; From The Advertiser by Miles Kemp,