Samuel uber alles

Taxi licensing has long been a means of limiting supply of a product with a view to raising its price. Taxi plates sell at up to half a million dollars with this cost passed onto consumers in fares that are above the market rate. In the process, plate holders earn economic rents in the form of the capitalised value of the excess plate prices that the regulated scarcity allows. Without the contrived regulatory scarcity taxi plates would not be worth anything.

As with all cases when a distortion into the market opens up artificial scarcity suppliers will seek to move in and in the process drive down prices.

For governments beholden to or intimidated by the beneficiaries of such the de facto taxi plate tax on the consumer this just will not do. The Victorian government has a plan to increase the number of plates through selling additional ones and enrich itself in the process. But entrepreneurs who find ways around the need to ply for hire only if in possession of a permit can undermine the plan and bring about the consumer benefits. This has the added benefit of preventing the government plan being derailed,as has so often been the case in the past, by the beneficiaries mounting a political campaign.

Enter Uber, a ride sharing app that allows ordinary motorists to act as hire cars. Uber operates on the edge of but within the law in many cities. Not so in Melbourne where the taxi regulator is none other than Graeme Samuel, formerly head of the ACCC and having a long history of seeking to regulate business and consumers to the great disadvantage of the economy. Samuel has fined people who are using the Uber system.

The farcical claim is that drivers are not trained. Does that mean they don’t have a driving licence? Surely it must mean they should not be allowed to transport their own elderly parents or children. What about if they gave a work colleague a lift home?

Uber has every incentive to ensure those supplying its service are capable, honest etc but for those who are slaves to state controls this is far less certain than if the government controls them. Then again, perhaps Mr Samuel does not really believe this but is merely mouthing such excuses so that he can keep his cushy regulatory gig. Surely he has more integrity than this!

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22 Responses to Samuel uber alles

  1. lem

    Ministry of truth.
    Ministry of Love.
    ACCC.

  2. Boambee John

    Unless Mr Samuel is a formally appointed member of the judiciary, sitting in a court, I suspect that his fines would be held illegal under the precedent of Brandy’s case in the High Court, which held that fines levied by the then Human Rights and Equal Opportunity Commission (whatever happened to the “Equal Rights” bit?) were illegal, because the Commission was not constituted as a court.

  3. Rabz

    The farcical claim is that drivers are not trained.

    If we’re talking Melbourne, this claim is indeed farcical.

    As I’ve noted on this blog before, the taxi drivers in Melbourne are an absolute menace.

  4. Tel

    Aren’t there networked apps for people to do ride sharing? I remember some pro-taxi sort of people were whinging about that, but it’s going to be difficult to stop people from chatting on the net.

  5. Bill Shut

    Essentially car-pooling. Guaranteed way of avoiding greenies. Because they never ever use these evil, polluting cars.

  6. H B Bear

    Maybe with the death of Mr Cabcharge and his political accessory Nifty Neville Wran (nice little retirement earner right there) perhaps there might be some scope for deregulation.

    It is no accident that so many taxi plates were scooped up by Macquarie Bank who know more than anyone about the opportunity provided by regulated monopolies.

  7. Leo G

    The farcical claim is that drivers are not trained.

    The training required for an ordinary class C licence is insufficiently farcical to qualify the driver for taxi operations.

  8. Bert

    Graeme Samuel has been the enemy of competition in many roles: AFL, ACCC, Taxi Commissioner.

  9. .

    I looked into being a cabbie once.

    1. They admitted they restricted supply to earn higher profits and wages.
    2. Typical monopsonists, they screw down wages of rookies.
    3. The requirements are basically a police check and a test to see if you’re blind or gonna die at the wheel ala Bobby Baccalieri Snr of The Sopranos or not.

    I am against any form of licensing, but even if it was run like the draconian security industry, it would make more sense and be more economically efficient (so many times over no one would whinge about taxis).

    The plate system is simply entrenchment of corporate welfare and absurd and belongs in medieval times like monopoly franchise and tax farming.

  10. Anon

    This is all just rearranging deckchairs on the Titanic. Like public transport, taxis will be out of business within 10 to 15 years because of driverless cars…..and car insurers, and panel beaters, and speeding fine revenue and hospital trauma centres and, and, and… You cannot stop technology.

  11. Ant

    Nope. I reckon his integrity stops about there.

  12. nerblnob

    A competition and consumer commissioner who is for monopoly and against the consumer. Fan bloody tastic.

    Ride sourcing through Uber X is already common in many American cities. Using private drivers is still the default in Russia and other former Soviet countries. There will still be a specialist market for taxi firms, like there is for vinyl LPs. But the monopoly days are just about over and driverless cars could change everything again.

  13. DaveA

    Become A Taxi Driver (Melbourne)

    Some applicants who present their Taxi Training Passport or Taxi Training Register at the VTD to obtain a driver accreditation will be randomly selected to undertake a mandatory summarised test of the driver accreditation training and Knowledge of Melbourne test by a VTD representative. The test will take approximately 30 minutes.

    If you are randomly selected to undergo a Knowledge of Melbourne test by a VTD representative, who might actually oversee that test? Where? Attend an official office? Well you ring up some guy on a list using his personal mobile and, I guess, catch up for that test at a time and place agreeable to both parties:

    2624 Pritam Singh Gill 0421 138 113
    2009 Rakesh Khanna 0405 471 946
    1342 John Orchard 8413 8117
    2090 Ashok Kumar 0402 697 229

    etc

    (list at same link, all public info)

  14. Anne

    We’re going to need a whole new layer of bureaucracy to monitor and punish citizens using smart phone apps to benefit themselves and others.

  15. Mick Gold Coast QLD

    Oh, look, really it is most important that government properly control who can and cannot get involved in important business – for example, State energy companies or coal exploration and mining leases, and taxis.

    In NSW those important assets are subject to the Macdonald Doctrine, named after a defrocked minister re-appointed by Premierette Comrade Bimbo Keneally (in gratitude for him giving her a leg up to the top man’s job). He brought some of the most powerful men available to the table on those things (and they thoughtfully brought Tiffanie along to ease his stress).

    Deciding water licence grants, selecting maritime services board surplus harbourside land buyers, who gets to own Circular Quay shops and who may develop Liverpool shopping centres is dealt with in the Tripodi Manner. Road tunnel ownership and which biggest developer is entitled to squillion thousand inner suburban apartment approvals is the Carr Legacy.

    These examples make a strong case for close control, a very strong case, and people here should recognise that maintaining these arrangements behind a commercial-in-confidence veil is quite in order, yes.

    Honorable Ministers must be left free to craft the best deal, and history tells us they certainly do that.

  16. A H

    Yup. I agree with the post.

    Anyone who buys or leases a vehicle should be able to operate as a taxi.
    Same goes for buses.

    Prices should be unregulated and determined by the passenger and the driver.
    In the case of buses, there should be no protection of routes (unless through private agreement).

    Of course, in both cases, operators would benefit by establishing probity. The average person would favour using a ‘brand name’ service, but there should be nothing stopping average guy getting into his car on a saturday night and start picking up fares.

    If the taxi driver assaults a passenger, we already have laws against that.
    If the taxi driver breaks the agreement (doesn’t deliver on what he promised), then that’s a broken contract there is liability under civil law.

    Taxis should not be compelled to carry drunks or people they disapprove of.

    Taxis should be allowed to permit smoking, at the option of the driver.

    And so on.

  17. Notafan

    I don’t think most people would be randomly getting into cars with complete strangers. That flies in the face of commonsense.

    I think most people would want some type of protection via an Uber type set up.

  18. Gavin R Putland

    HOW TO BEAT THE FINES

    Dear Sir/Madam,

    For driving a vehicle under the Uber ridesharing app, which you say is an offence, you have issued me with infringement notice no. …, dated …, demanding payment of $…. If you’re going to enforce payment, you’d better make sure that the State/Territory government is willing to lose all its revenue from payroll tax.

    Under s.90 of the Australian Constitution, only the Federal Parliament can impose duties of excise. If an excise is “an inland tax on a step in production, manufacture, sale or distribution of goods”, as held by the majority of the High Court in Ha v. NSW (1997), then paying the workers is such a “step”. If “A State tax which fell selectively upon goods manufactured or produced in that State would be an excise duty”, as held by the minority in the same case, then an inland payroll tax is indeed selective in that way, because it is levied on the labour content of locally produced goods but not imported goods. If an excise is a tax whose “criterion of liability” is “the taking of a step in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer”, as held by Justice Kitto, siding with the majority of the High Court in Dennis Hotels v. Victoria (1960), then again paying the workers is such a “step”.

    By any of these definitions, a State or Territory payroll tax is unconstitutional in so far as it affects goods. That it also affects services is immaterial; for example, in WA v. Chamberlain Industries (1970), the High Court held that a tax on receipts of money was an excise although the tax made no distinction between payments for goods and payments for services. It is also immaterial that payroll tax is not levied on goods directly; the same is true of the taxes that were struck down in Ha v. NSW and WA v. Chamberlain Industries.

    Payroll tax is relevant to this case for three reasons: (i) in the absence of payroll tax, my cost of living would have been lower and my job opportunities would have been better, so that I would have been less likely to find it necessary to offer my services as an Uber driver; (ii) if I am compensated for the harm done to me by payroll tax, the compensation will cover the fine; and (iii) if payroll tax is struck down without compensation for its past effects, I will subsequently find it easier to earn and save enough money to pay the fine.

    Accordingly, if the infringement notice is not withdrawn, I will notify the Attorneys-General of the Commonwealth, the States and the Territories that a constitutional matter is to be raised in the Magistrates / Local Court, and will argue in court as follows:

    (a) My actions were legal;

    (b) If my actions were not legal, the fine must be deducted from the compensation owed to me for the harm done by the unconstitutional payroll tax; and

    ( c) If for any reason the remedy sought in (b) is not possible, I am still entitled to a declaration that payroll tax is unconstitutional.

    Your move.

  19. Anne

    Gavin, that’s terrific. Well done. Thank you.

    Time to fight fire with fire.

  20. stackja

    Has Graeme Samuel replaced Reg Kermode?

  21. boyfromtottenham

    I can’t ever see the govt allowing private cars to freelance as taxis – too many things to go wrong (i.e. govt loses control!). One key thing to remember about the taxi industry nationally is that it allows ‘ply for hire’ taxis, and also ‘hire cars’ or limos, the difference being that hire cars can’t ‘ply for hire’ – i.e, pick up a random fare who hails the cab from the street) , but basically perform the same function (moving customers from a to b) at around the same price IF the journey is ‘pre-booked at a negotiated cost’. Not many people know this. Also, hire car licences are a fraction of the cost of taxi plates, and their vehicle insurance is also a fraction of a taxi’s insurance. All that needs to happen to upset the balance is for an entrepreneur to figure this out, supported with a decent web app, and it will change the whole damned game. That is, if the (state) govt doesn’t move in and kill it to protect the (cr@p) taxi industry…seen it before.

  22. Jessie

    Allan Fels another ex ACCC and Arnold-Bloch-Leibler is on the Taxi Services Commission, appointed in the first phase Taxi Industry Inquiry.
    Double whammo.
    Though wanting to retire due to family reasons (one daughter has schizophrenia), Fels took up John Howard ‘s offer as Dean at the newly created Australian and New Zealand School of Government (ANZSOG) with the influential executive fellows program and subsequent networking.

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