NSW taxis

Fee: A 10 per cent surcharge stays in NSW for now. Photo: Barry Chapman

Taxi passengers in NSW will be ''ripped off'' compared with their Victorian counterparts when that state's taxi reforms begin next month, according to former competition regulator Graeme Samuel.

The O'Farrell government has not announced plans to follow the lead of Victoria, which will halve the cost of paying for taxis by electronic cards from February 1.

From next month, payments firms such as Cabcharge will no longer be able to charge 10 per cent for paying for taxis by EFTPOS or credit cards in Victoria.

New laws will limit the surcharge to 5 per cent, one of a number of reforms Mr Samuel expects to be replicated by other states once politicians and the public appreciate what has happened in Victoria.

''There seemed to be no justification at all for a surcharge on taxi fares to be 10 per cent, plus GST, I might say,'' said Mr Samuel, the former chairman of the Australian Competition and Consumer Commission since appointed to run the Taxi Services Commission in Victoria.

''It is not a recovery in costs; it is not a recovery of costs including a small profit - it is pure usury.

''And it has been there because there has been no competition.''

NSW Transport Minister Gladys Berejiklian is on leave. A spokesman for Transport for NSW said the department was ''monitoring'' the Victorian reforms.

Mr Samuel, however, said he expected other states to follow Victoria's lead soon, particularly if firms such as Cabcharge indicated they were ''ripping off consumers in other states with a 10 per cent surcharge … to cover what is a lesser profit in Victoria''.

Cabcharge, the biggest taxi payments firm in the country, has said the introduction of Victorian legislation could cost it about $11 million a year in revenue.

But the company is also being threatened by a host of new competitors that allow would-be taxi passengers to communicate directly with taxi drivers through mobile phone apps.

A co-founder of one of these apps, GoCatch's Andrew Campbell, said 250,000 people across the country had now downloaded his company's app.

GoCatch, which is also a payment system, charges a 7.5 per cent surcharge on card payments in Victoria and NSW but will reduce that to 5 per cent in Victoria from next month.

''It will stay the same for the moment in NSW, but we're not ruling anything out,'' Mr Campbell said.

Shadow Roads Minister Walt Secord said the O'Farrell government needed to consider slashing the payments surcharge.

''Even at 5 per cent it is still more than most credit cards,'' Mr Secord said.

''It is hard to justify the 10 per cent surcharge when Visa and Mastercard has a 1 per cent surcharge and American Express has about a 2 per cent charge.''

The Transport for NSW spokesman said: ''Transport for NSW is committed to improving taxi services for customers, while balancing the needs of drivers.

''We are monitoring developments in Victoria.''

A spokeswoman for Cabcharge said Victoria was a separate market to NSW, and the company would assess the effect of the legislative changes.

''If at any point the costs outweigh our revenue we will review our decision about operating there,'' the spokeswoman said.