Taxi fares should drop, regulator may recommend to NSW government
The pricing regulator could recommend a drop in taxi fares. Photo: Lee Besford
Taxi fares in Sydney could soon be lowered following a review by the independent pricing regulator.
The pricing body is considering recommending to the government that it lower taxi fares by 2.5 per cent to encourage more people to use taxis. It also believes higher fares do not lead to more benefits to drivers.
The 2.5 per cent fare drop is one of four options put forward by the Independent Pricing and Regulatory Tribunal in an issues paper released on Monday morning.
The other options are: make no change to fares; increase fares in line with inflation; or continue the past practice of lifting fares in line with a measure called the Taxi Cost Index.
But IPART has been clear that it is seeking to change the way in which Sydney's taxi market works. This is because it believes the benefits of higher fares have flown to the owners of taxi licences, to whom they are financial investments, rather than drivers or the public.
“What we've seen over the past few years is taxi fares going up, making them less affordable and increasing the reluctance of potential passengers to choose taxis over other transport options,” the chairman of IPART, Peter Boxall, said.
“But while fares have increased, the incomes of taxi drivers and operators have remained low, with indications that additional revenue has gone to licence plate owners through higher plate lease fees, rather than to drivers and operators, he said.
“There is little evidence to suggest at this stage that a further fare increase would benefit drivers, operators or passengers.”
IPART is calling for submissions on its issues paper, with any fare changes to take effect from July.
It will release a draft report in April.