ABC 702 SYDNEY
WEDNESDAY, 30 SEPTEMBER 2015
SUBJECT/S: ACT Government legalises ridesharing.
RICHARD GLOVER: Andrew Leigh joins us from Canberra now with his thoughts on UberX and so-called digital disruption. Good afternoon, Andrew.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Richard.
GLOVER: They've tried to nut out some sort of compromise in the ACT today, have they got it right?
LEIGH: I think they have, Richard. One of the things that is part of the ACT's move to allow ridesharing is making sure there's the same criminal history and background checks for taxis, hire care and ridesharing vehicles. So they're making sure there's a level playing field for the checks on drivers and the checks on cars. They're also curtailing some of the use of surge pricing, which has been pretty controversial when it's been used by Uber. The ACT Government is saying it can't be used in emergencies. And then they're also bringing down the taxi licence fees.
GLOVER: The emergency example being in Sydney, where shockingly, during the Martin Place siege when there was also a suggestion that there might be bombs elsewhere in the city, a lot of people wanted to leave the city at one time and they put the prices up. The price went through the roof!
LEIGH: That's right, and Uber later apologised for that surge pricing. But the ACT is saying formally that if there is an emergency, then surge pricing can't be used. For taxi drivers, they'll see their licence fees halved. The ACT hasn't sold permanent taxi licences for over a decade now; everything is annual licences and those annual fees will go from $20,000 down to $10,000 and then down to $5,000 in the next year.
GLOVER: Do the taxi drivers accept that it's a level playing field?
LEIGH: I don't think anyone is going to be completely happy with this outcome, Richard. But it does reflect an advance with new technology. This technology of ridesharing has befuddled regulators across the country, and Canberra is the first place to have said that it's better to work with ridesharing technologies to create a platform that's suitable for UberX but also its competitors such as Lyft, and that makes sure customers have as many options as possible. Taxis are still the only ones that can do the rank-and-hail though; so you won't be able to stick your arm out and get an Uber, and you won't be able to pay cash unless there's a camera installed in the car.
GLOVER: Ok, so that's the quid pro quo that the taxi drivers get for their $5,000 or $10,000 licence fee?
LEIGH: That's right. They're the only ones that can pull up to a cab rank and they're the only ones that can pick you up when you stick your arm out. The evidence in some other jurisdictions, Richard, is that taxi volumes have actually stayed fairly stable as companies such as Uber and Lyft have come into the market.
GLOVER: In other words they're taking custom from people who choose not to use taxis anyway?
LEIGH: Yes, and one of the fascinating things you've seen in places like San Francisco, for example, is the big drop-off in the number of cars owned by young people. Young people are now recognising that with services such as UberX, UberPool and Lyft, they're able to get around without needing their own vehicle. That's obviously got big benefits in terms of reducing congestion, and in terms of reducing the pressure on parking places. I was talking to a woman the other day who said that she reckons she's bought her last car. She lives in inner Melbourne and she anticipates getting around through a combination of ride-sharing and on-street car rentals – companies like GoGet that have permanent car places on the street and let you just sign up and rent a car for half a day when you need one.
GLOVER: We're talking to Andrew Leigh, the federal Member for Fraser, as the ACT manages to form this compromise on ridesharing. As Andrew says, probably not everyone is entirely happy with it but nonetheless this is the first jurisdiction that has managed to bring UberX into the tent. The crucial thing though sounds like it's about the licence plates, because in other jurisdictions they do have a big, upfront, permanent licence plate fee. In Sydney we've seen licences go for as much as $350,000. It's hard to broker the sort of compromise that Canberra has brokered if you have that sort of upfront licence fee, isn't it?
LEIGH: Richard, a lot of other jurisdictions are moving steadily towards the annual licencing system, which I think has fewer of the problems that you're talking about. But most taxi drivers don't also own the plates. I understand the share of owner-drivers is something around one in five. So most taxi drivers are in that old system where they're paying someone else a fixed amount of money at the start of their shift, that 'bailee' system of driving.
GLOVER: Ok, but what do you say to that bloke who owns five licences and has paid lots of money for them, thinking this was a government regulated businesses and he could rely on it?
LEIGH: In the ACT they've set a review in a couple of years’ time to look at that issue. I think it's a challenging one. Certainly looking at it from a federal perspective, we've been urging states and territories to move on the issue of ridesharing but recognising that there are a bunch of challenges. I think you've gone to the toughest of them, Richard. But the alternative is to stick our heads in the sand and to ignore the benefits of the new technology for creating new jobs, for creating more opportunities for customers to get around, and also for allowing more innovation. There's a Newcastle firm called Camplify, for example, which is setting up caravan sharing. It wants to create a new start-up business to address the fact that most people with caravans only use them three weeks each year. We’ll get more innovative businesses like that if we can create the right regulatory environment.
GLOVER: The licence plate issue is tough though, because on one hand you might just say that the Government should compensate owners and give them the $300,000 back; on the other hand you could argue that this isn't the only business to suffer digital disruption. If you want to complain about that, there's lots of companies – you know, newspapers who spent money on printing presses just before the internet arrived. They could say they've been 'digitally disrupted' but no-one is offering them compensation.
LEIGH: That's right, and they're the two sides of the argument that the ACT Government will be looking at in a couple of years' time. I think that's going to be a challenging conversation but again, Richard, what we're seeing from the ACT is a jurisdiction which is facing a tough problem that states and territories across the nation are dealing with, and actually coming up with the first solution. Every other state and territory talks about the fact that it wants to move from stamp duty to land taxes; a couple of years ago the ACT did that textbook economic reform. Just as other states and territories are recognising that eventually they're going to have to work out a way of regulating ridesharing, again the ACT has tackled that today.
GLOVER: Ok, but for our ACT listeners, important to understand that UberX is not available right now in Canberra but is coming on October 30.
LEIGH: That's right, yes. So it's exactly one month away.
GLOVER: Andrew Leigh, thanks very much for your time.
LEIGH: Thank you, Richard.
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