Now Victoria's legalising Uber - and it's going to cost everyone $2 a ride

Photo: Robert Cianflone/Getty Images

Victoria is the latest state planning to legalise ride-sharing, with the Andrews government claiming it will create 3,500 jobs.

The decision paves the way for Uber, which has been operating illegally in the state for more than a year and makes Victoria the final state to yield to the US-based giant.

But everyone taking a taxi or Uber will pay $2 a trip for at least the next eight years as part of a $378 million compensation package for the taxi industry.

Victoria’s changes are the most far-reaching and expensive of any of the public transport reforms introduced by state governments as Uber pushed its way into the market.

Over the next two years, the existing taxi licence will be abolished, replaced by a single registration system covering commercial passenger vehicles, including taxis, hire cars and ride share services.

All drivers will be accredited by the Taxi Services Commission and have to pass police, medical and driving history checks. They will also face ongoing criminal data matching. The current knowledge test will be scrapped.

Rank and hail work will only be available to people who meet certain requirements, including cameras and fare meters.

There’s $75 million allocated to a “Fairness Fund” for existing taxi drivers in immediate financial hardship as a result of these changes, including $25 million to improve access for people with a disability. The Taxi Services Commission will also have a dedicated Commissioner for disability services.

Premier Daniel Andrews says draft legislation to be introduced this year to reduce the hire car licencing fee to zero, with a further raft of changes introduced in 2017.

“This is a comprehensive and fair transformation of taxi and hire car services, which responds to new technology that is changing the way people travel,” he said.

Cabcharge CEO Andrew Skelton said he hoped the changes would create a fairer environment for all industry participants, but called the compensation package inadequate.

“The Victorian Government has an obligation to taxi licence holders, because people either bought the plates from the Government or bought them on the secondary market on the basis that the Government would not undermine their value,” he said.

“Most licence holders are mum and dad investors who have purchased taxi licence plates either to operate a taxi business in their local community or to establish some retirement savings. These investments typically form a large portion of their retirement capital.

“The compensation package outlined by the minister is quite inadequate, but may go some way to help those individuals who will now face considerable losses through the devaluation of government-issued taxi licence plates. While compensation for plate owners is imperative, it’s fundamentally unfair that Victorian passengers will be made to subsidise what is essentially the government’s decision and responsibility.”

Victoria is the last Australian state to announce the legalisation of ride-sharing.

NSW and the ACT introduced it last year, followed by SA and WA. Ride-sharing starts in Queensland next month and legislation is currently passing through Tasmania’s parliament. The Northern Territory does not have Uber.

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