Taxi booking app goCatch has dropped its credit card payment surcharge to five per cent, the same maximum rate recently mandated for all cabs in Victoria.
The co-founder of the app Andrew Campbell says it is time for other companies in Australia to reduce their surcharge rate, saying the industry had been given “long enough” to become used to the idea.
“Whether you’re in Darlinghurst or Dubbo, Brunswick or Broken Hill, if your driver is using goCatch, you’ll pay no more than a five per cent surcharge at your destination,” he said.
“Most taxi travel is paid for via credit card.
“Victoria has led the way by already introducing a flat five per cent surcharge including GST. We’re now ensuring that the reforms are available to goCatch passengers nationwide,” said Campbell.
The decision comes soon after the death of Cabcharge founder Reg Kermode, whose company has been criticised by consumer group Choice for its credit card fees, which are around 10 per cent. The company has said in the past that these were not surcharges, but rather fees for a financial service.
Last month former NSW premier Barry O’Farrell said he would seek to follow Victoria in capping taxi surcharges at five per cent, an announcement which caused the company’s share price to plummet. Cabcharge said a five per cent cap would cost it around $14 million, and that it would have to find other ways to recover the income.
Each year Cabcharge alone rakes in around $28 million in taxi service fees.
O’Farrell and Transport Minister Gladys Berejiklian also foreshadowed reforms to taxi booking apps in April, though it wasn’t clear exactly what these would entail.
“The reforms will safeguard customers by ensuring the apps meet the full range of customer service, privacy and safety standards that apply to existing booking services provided by taxi networks,” Berejiklian said.
After Victoria enforced its five per cent limit, and the O’Farrell government indicated it could do the same, goCatch decided to voluntarily roll the reduction out nationwide. Previously its surcharge was seven and-a-half per cent.
“With this reduction now being rolled out nationally, passengers in other states will now be able to benefit from the taxi reforms that are changing the taxi and hire car industry in Victoria for the better,” said Victorian Taxi Services Commission chairman Graeme Samuel.
“For far too long passengers have been hit with exorbitant fees just for choosing a payment method other than cash,” Samuel said.
goCatch, founded in 2011, is one of several taxi booking platforms such as Uber that are changing the industry in Australia.
Leading investors such as James Packer and SEEK co-founder Paul Bassat have invested in the business through their Square Peg Capital fund.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.