ACT News

Taxi plate owners say government has wrecked their retirement nest egg

For Chris Nichols, the decision to spend $272,000 buying a taxi plate and joining Aerial in 1994 was about security for her future and a nest egg for her retirement. Now retired and in her late 60s, she owns a plate she says has been made virtually worthless with the arrival of Uber and the deregulation of the taxi industry.

"I'm not a whingeing capitalist, but it's really gone belly up," she said this week. "I'm not opposed to Uber. We have to embrace the times. All I'm saying is if the government regulated the taxi industry within an inch of its life ... and really accommodated the introduction of Uber, then  there's a serious question to be asked regarding compensation of people who bought in good faith."

Chairman of the Canberra Taxi Industry Association, John McKeough: If we don't get compensated I'll be on the pension.
Chairman of the Canberra Taxi Industry Association, John McKeough: If we don't get compensated I'll be on the pension. Photo: Rohan Thomson

Ms Nichols, a former public servant, said the plate was big money in 1994, enough to buy a house, and initially had paid well, leased to a taxi operator for nearly $34,000 a year. But the amount had since declined, and whereas owners used to sign three-year contracts with operators, her operator would only agree now to a month-to-month contract. He paid $1774 a month and could quit at any time. 

"If he rings me up and says 'I no longer want it', what do I do then? You can't sell them. They're not worth anything."

Chairman of the Canberra Taxi Industry Association, John McKeough: exploring legal action.
Chairman of the Canberra Taxi Industry Association, John McKeough: exploring legal action. Photo: Rohan Thomson

Ms Nichols is one of a number of owners accusing the government of wrecking one of their biggest investments by welcoming Uber.

More than three-quarters of Canberra's 284 taxi plates were bought outright, most by investors, who lease them at about $20,000 a year to taxi operators.


Until 1995, the government sold the plates at auction. Since 2006, it has been leasing them out instead.

Ross Pearson, who lives in Canberra and farms at Cowra, said he bought his plate in 1986, and had planned retirement around the income. 

"My plate's reduced to such an extent that I'm going to get nothing for it or very little for it," he said. "I think that merits compensation. I will be poorer, that's the thing, and when I'm too old to farm it will be a source of income that I can't rely on."

Peter Leslie, of the Bega valley, bought his plate privately 13 years ago for $265,000. He has been trying without success to sell it this year. "All I get is laughter," he said.

Mr Leslie has written to Chief Minister Andrew Barr saying he faces financial ruin and he and his wife were in "a state of fear for our future".

His lease with a Canberra operator paid about $19,500 a year, his main income. 

"If my operator stops paying me that income, I have to go on the dole queue, so do his drivers," he said.

His operator, who did not want his name used, said he operated five plates – three perpetual plates, including Mr Leslie's, and two plates which he leased directly from the government at $20,000 a year, a fee halved from November 1.

Each car cost him about $85,000 a year – including $24,000 to Aerial, fuel, workers compensation, insurance, lease and other costs. He splits the takings 50:50 with drivers.

He would seek cheaper leases from owners and lower fees from Aerial, but might have to quit the contracts with plate owners and keep only the two leased plates, he said.

"If we can't survive, the perpetual owners can't survive," he said. "I'm going to wait until January or February  then speak to the three owners, if they can reduce the price then I will hang on, otherwise I will get out altogether."

Canberra Taxi Industry Association chairman John McKeough said the group was exploring legal action, pointing out that hire car owners had been compensated on deregulation in 2003.. 

"We're very disgusted at the chief minister's off-hand line that it's too bad, we've invested poorly so it's our bad luck," he said. "That's the most awful thing I've heard anybody say."

Mr McKeough owns three plates, two bought in 1988, and the most recent in 2007, for  $268,000.

"We've been in the industry for 52 years. My wife and I were looking forward to retiring on our taxi plates," he said. "If we don't get compensated I'll be on the pension instead of being a self-funded retiree."