Canberra taxi plate owner Phil Button has been slapped down by the Australian Competition and Consumer Commission over a suggestion that plate owners should use their control of the taxi dispatch system to protect the value of their taxi plates.
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Mr Button is among 170 owners of taxi plates whose value have been hit by the ACT government's deregulation of the industry in November.
Welcoming Uber, the government also cut the cost of leasing taxi plates directly from the government to $10,000 a year, which limits the amount that plate owners can charge to lease their plates. Mr Button suggested plate owners fight back by making people who lease cheaper plates pay more to use the Aerial taxi dispatch system.
But ACCC enforcement manager Richard Fleming wrote to Mr Button after his suggestion was publicised in The Canberra Times, warning him that the law prohibited price fixing, competitors agreeing to divide a market to shield themselves from competition, and controlling or limiting the amount of goods and services available, he said.
"The act also prohibits contracts, arrangements or understandings that are likely to substantially lessen competition in a market," Mr Fleming told him. "Further, the act prohibits businesses with a substantial degree of power in a market from using this power for the purpose of eliminating or substantially damaging a competitor, or to prevent a business from entering into a market, or engaging in competitive conduct within a market."
While the ACCC did not intend to take action, he should be aware of the risks, Mr Fleming wrote.
Mr Button has now written back to the ACCC saying he took umbrage at the Orwellian warning. "I am merely a taxi plate owner with no power to turn off dispatches from the taxi base system," Mr Button told the ACCC, saying he was merely trying to "enthuse others, in a position of doing so, to take such action".
Instead of targeting him, the ACCC should turn its considerable power on the ACT government. which was itself locking out competition, Mr Button said. Until the mid-1990s, the government had sold plates for about $250,000 each, an amount that could buy a four-bedroom house at the time.
In 2007, the government itself became a major player, deciding "to compete against perpetual taxi plate owners, like me" by leasing its own plates. The fee set for government plates, of $20,000, undercut the amount charged by plate owners and devalued their investment, Mr Button said.
Now, fees had been cut again to $10,000 a year, and would be cut to $5000 a in a year's time.
The decisions had rendered his plates and those of other owners worthless, he said.
"Our investment for our future retirement – our superannuation – has dissolved before our very eyes," he said, suggesting the ACCC investigate whether the government had engaged in unconscionable conduct and predatory pricing.
"In driving their lease fees down as overtly as they have, they have indicated their intention to grow in the market place with the hope that perpetual plate owners like me will simply fade away leaving only the ACT government as the only player in the industry. That message went out loud and long to all."
