Uber approved in Victoria

The Victorian government has signalled major changes to the regulation of taxis and ride-sharing services throughout the state, starting with approval for disruptive ride-sharing service Uber.

But the announcement yesterday will cost Uber customers – as well as users of regular taxis. A $2 surcharge is to be levied on top of the fare for any paid journey in the state.

The surcharge will be imposed for each and every journey over the next eight years, in order to build a $378 million fund to support existing taxi licence holders facing the transition to a new registration system for taxis.

According to a report by the ABC, Victorian premier Daniel Andrews says the changes to taxi registration and the legalisation of Uber-style ride-sharing services pass the test for fairness.

"This is the most progressive, the most comprehensive reform agenda anywhere in the nation," the premier was quoted saying in the report.

"It's also the fairest and it provides everyone across Victoria the certainty that there will be more choice, there will be greater value, there will be better transport options for you, because we are making sure that the law is written to take advantage of the technology that's here now and all that will come hereafter."

Uber has objected to the surcharge already, with the company's Victorian general manager Matt Denman observing that "Uber's position is that anything that makes transport more expensive is a bad thing for consumers."

Denman has demanded the state government justify the surcharge with economic modelling-based evidence. Uber's spokesman is yet to say how the changes will affect Uber, its drivers and its customers.

The taxi industry has cautiously welcomed the government's announcement, although some taxi operators running more than two vehicles will miss out on the full benefit of the government's pay-out after abolition of the existing registration system.

Under the new rules, existing licences will be revoked, but licence holders will be paid $100,000 for the first car, and $50,000 for a second car. David Samuel of the Victorian Taxi Association has told the ABC that most licence holders operate just the one vehicle.

Taxi plates in Victoria were changing hands for as much as $600,000 until recently, but over the past year – possibly a consequence of Uber's local operations – plates have been selling for around $150,000.

With Victoria joining the ranks of states that have agreed to allow Uber to operate, only the Northern Territory remains a no-go zone for the company.

For the moment, it's illegal to offer an Uber-style ride-sharing journey in Queensland, but Uber will operate there legally with effect from early next month. Recent legislation in Tasmania clears the way for Uber to begin operating there within a matter of months.

Picture courtesy of Mic/Wikimedia Commons