Impact of Victorian government's planned $2 levy on taxi trips spelled out by North East cab industry

Trouble looming: Wodonga Taxis chairman Scott Cowie believes plans to introduce a $2 levy on all fares will drive down demand and hurt battlers.
Trouble looming: Wodonga Taxis chairman Scott Cowie believes plans to introduce a $2 levy on all fares will drive down demand and hurt battlers.

A $2 levy on each Wodonga taxi trip is predicted to net $350,000 each year for the Victorian government and drive down demand for cabs in the city.

Amalgamated Taxis Wodonga chairman Scott Cowie said the bulk of fares in the city involved welfare recipients who would struggle to pay $2 on top of their existing flagfall.

“Our average job around town is $9 to $11, so it’s going to be a 20 per cent increase,” Mr Cowie said.

“Two dollars for you or I is nothing, but $2 for a pensioner is a huge thing and if you times that across five or six trips in a week that’s $12 and that’s a lot of money for some people.

“This will have serious impact on local elderly people, struggling families and the disability community and they need to understand how serious this is.”

The $2 levy is being introduced by the Victorian government as part of its reforms to legalise ride-sharing services, such as Uber.

Money from the levy, to be introduced in 2018, is earmarked for taxi compensation and administration costs.

A bill for the levy is due to be soon debated by the upper house with Mr Cowie predicting it was “50-50” whether it would win cross bench and Greens support to pass.

In addition to the $350,000 cost to Wodonga Taxis, it is predicted the government would reap $6.2 million overall from North East cab businesses covering Shepparton, Benalla and Wangaratta.

“Wodonga Taxis as a group doesn’t make a lot of money, because it’s a co-operative, whatever profit we do get goes out to everyone at the end of the year or we have to kick-in if we make a loss,” Mr Cowie said.

“We do not have the administrative ability to collect this levy for the government and we’ll have to bring in new systems and processes, which means we either make a loss and eventually lose our businesses or we pass on the cost to customers – neither of these options are acceptable.”

Mr Cowie has no doubt “demand will go through the floor” if the $2 levy proceeds.

“Two dollars is a vast amount of money to put on something that you’ve got to do multiple times a week and there’s no other option, there’s no ride-sharing here,” he said.

“These people can’t catch a bus, that’s why they catch us.

“The problem is the government put the same rules on the country as the city.”

Wodonga has 17 taxis with 175,000 trips taken per year.

An average Saturday sees 700 trips, with 1000 at peaks. 

Public Transport Minister Jacinta Allan has previously defended the shake-up by saying she was giving Victorians “more choice, shorter wait times and safer travel”.