Cabcharge CEO Andrew Skelton sees a slowing of the barrage of regulation hitting his payment service and taxi network company.
Just about every state and territory has had a go at his business, cutting the service fee for payment processing to about 5% from 10%.
The flurry of regulation has ironically been driven by new entrants such as ride sharing Uber, a regulation-busting business.
The process means that these new competitors are now themselves subject to regulation. A case of the bad boy challenger becoming the mainstream.
“The state governments have just about stopped throwing rocks at the taxi industry and hitting us with changes to regulation,” Skelton told Business Insider.
“I’m glad to see these new competitors, who have thumbed their nose at regulation for so long, are now being regulated.”
The states have also been legalising riding sharing services.
Victoria is the last Australian state to announce the legalisation of ride-sharing. NSW and the ACT introduced it last year, followed by South Australia and Western Australia. Ride-sharing starts in Queensland next month and legislation is currently going through Tasmania’s parliament. The Northern Territory does not have Uber.
The states have also been capping the fees for Cabcharge services. The introduction of a 5% cap on non-cash taxi fare service fees in Western Australia and New South Wales hit income for a full year for the first time. Queensland is now following with its own 5% cap.
Here’s how Cabcharge sees what Skelton calls “rock throwing” over the last two years.
Cabcharge, which could be argued to have had the payments business to themselves for quite a while, has meet the changes by reinventing itself.
More than half the senior management at the company now weren’t at the company two years ago.
Like its competitors, it has an app for booking and for payments. It now also has ways for its drivers to tell customers where they are and how long they will be.
“A level playing field opens up opportunity,” he says.
Skelton is upbeat about being part of the transport industry. The taxi and ride sharing market is worth about $6.21 billion a year.
“To date ride sharing has not presented a significant threat to our taxi payments business,” he says.
Here’s how he sees the opportunity:
Last week Cabcharge posted 45% fall in full year profit to $25.61 million on the back of writes down in he value of its taxi licence portfolio. Its shares dropped 10% on Friday to close at $3.27.
“Despite the regulatory focus on the industry and aggressive competition, Cabcharge has increased the value of taxi fares it processes at a compound annual growth rate of 2.9% over the past five years,” says Skelton.
“Our payment model will now evolve to focus on growth and winning market share.
“We’re now focused on the quality of service for passengers and have made large strides to improve the certainty of service for taxi passengers with faster pick up times and launching Passenger Connect which enables drivers to call passengers on approach.”