A convoy of up to 200 taxis is converging on Parliament House in a mock funeral procession at noon in protest against proposed industry reforms they say will bankrupt small business owners.
The protesters, members of the state's multibillion-dollar taxi industry, will attempt to hand Premier Ted Baillieu a funeral wreath and ask him to sign a card that reads: "As Premier, I offer my condolences on the imminent death of small business in Victoria should this government adopt the Fels report into the taxi industry in its entirety, especially the unnecessary devaluation of existing taxi licenses, with no form of compensation, effectively killing off as many as 3000 small businesses in this state.”
A yellow funerary convoy heads to Parliament
Up to 200 taxis, many of whom were paid $50 each, head to Parliament House to protest industry reforms in a mock funerary procession.
Many of the taxi drivers who have joined today's convoy are being paid $50 to be there.
Harry Katsiabanis, spokesman for protest organisers Taxi Industry Stakeholders Victoria, said it was fair to pay ordinary drivers to protest because they were forgoing income.
"These guys make $8 an hour. It's unfair for them not to make any money, so they are being compensated," Mr Katsiabanis said.
The Victorian taxi industry is on the cusp of almost unprecedented industry reform. A 15-month inquiry by Professor Allan Fels, the former head of the Australian Competition and Consumer Commission, proposed 145 reforms and innovations in a bid to raise the service standards of Victoria's oft-maligned taxis.
The Baillieu government has until December 12 to respond to the final version of Professor Fels' report, which has not been made public but is believed to closely resemble the draft version.
The industry says many of the report's recommendations are fair but is fiercely opposed to two key reform proposals – reducing the value of taxi licences and ditching the requirement for operators to affiliate with a booking network.
Mr Katsiabanis, who owns a taxi depot and a number of licences, said the Victorian taxi industry was mostly made up of small business owners, not "mega-wealthy taxi tsars".
"There are 10 people in Victoria who own 10 or more taxi licences. Most of the rest own one or two," Mr Katsiabanis said. "We're not talking about Kerry Packer here, we're talking mums and dads who work to put their kids through school."
Taxi licence values have ballooned beyond $500,000, but have recently declined towards $400,000.
But Professor Fels said the taxi industry "needs to put the interests of customers first, not those of networks, licence holders, brokers and others".
"Otherwise the Victorian public will continue to get poor service," Professor Fels said. "The protest shows that unlike the Victorian public, the leaders of the taxi industry still don't get it – the industry needs major reform."
In a report commissioned by industry group the Victorian Taxi Association, a leading analyst of Australia's taxi industries has lashed out at Professor Fels' reform ideas as fanciful, predicting they would impose economic hardship on drivers and clog city streets with prowling cabs.
Professor Des Nicholls, an economist at the Australian National University, said decisions to boost the number of taxis in Victoria should be based on hard data about the level of public demand for them, not a theoretical conviction that there is "latent demand".
"There is no evidence there's latent demand that's untapped," Professor Nicholls said. "Every overseas study shows if you massively increase the supply of taxis, the demand doesn't keep up. So if you increase the supply by 15 per cent, you need the demand to increase more than that. And it's not going to happen."
Professor Nicholls predicts there will be "an extended period of chaos and turbulence" if the Baillieu government adopts in full the report's recommendations.
He said the Victorian government already had all the data it needed to make an informed decision about how many taxis Melbourne needs, if only it used the booking data of networks 13Cabs and Silver Top. The network duopoly has data on every meter activation in the city, and the time between bookings and pick-ups, both of which could be used by the government regulator to chart changes in supply and demand.
He said this was one good reason to maintain the requirement to affiliate with a booking network, the other being to prevent unaffiliated drivers from congregating at the airport and major cab ranks or cruising the streets in search of fares.
However, the regulator, the Victorian Taxi Directorate, does not currently collect this data. It uses a public interest test to make decisions on releasing new taxi licences.
Professor Allan Fels said the regulator had failed for years to break the industry's self-interested stranglehold on the allocation of taxi licences. "The Victorian public is ill-served unless there is a clean break with industry and its pressure to restrict the number of taxi licences," Professor Fels said.
Suggestions the streets would be flooded with cabs were alarmist, he said. "Ours is a balanced, even compromised approach, because a licence will cost $20,000 a year for five years. That will kill off any irrational entry."
A spokesman for the City of Melbourne said that if the number of taxis on the city streets grew, they would work to ensure the increased traffic at major cab ranks was well managed.