One step closer to breaking taxi fare monopoly
Australians are one step closer to saving $45 million a year in taxi fees under wide ranging reforms announced by the Victorian Government today.
The decision cuts the fee that customers pay using credit and debit cards from 10 per cent to five per cent, paving the way for a nationwide crackdown on excessive credit card charges in taxis.
“The decision is good news for Victoria’s taxi customers who took 35 million trips last year as it means greater competition, lower fees and more services,” Tyro Payments CEO Jost Stollmann said today. Nationally the 10% taxi surcharge contributed $90 million of revenue to Cabcharge in the 2012 financial year, charged on $1.05 billion in taxi payment turnover.
The announcement paves the way for the Reserve Bank of Australia (RBA) to open up the Cabcharge system to competition for the first time in 37 years. Cabcharge is a monopoly that operates its payment terminals in 97 per cent of Australian cabs.
Mr Stollmann said that by opening up the payment processing and metering systems to third parties, Australia’s 65,000 taxi drivers and their 371 million passengers each year would benefit from dramatically better service at lower costs .
“The Cabcharge system is unfair and unethical and needs to be cracked open. Why should taxi customers have to pay 10% when retail store customers only pay 2-3%?” Mr Stollmann said. “The payment system in cabs is more expensive than in a retail store, but there is no justification for the 10 per cent.”
Today’s announcement means the RBA can now act to enable other vendors to deliver lower fees and greater competition to Australia’s taxi users.
A decision by the Reserve Bank of Australia (RBA) is still pending on whether to regulate the Cabcharge system and open it up to competition. As the newest independent entrant into Australia’s EFTPOS market Tyro Payments has developed with its Merchant partner CabFare an efficient real-time alternative to Cabcharge terminals that provides a competitive alternative.
Tyro endorses other announcements made today including the adoption of innovative cloud based solution for ‘taxi only’ cards that will lower costs, improve security and remove fraud. It will also deliver real time accountability for services to disabled Victorians.
“Single integrated EFTPOS terminals with real-time processing of all cards including Cabcharge will eliminate the industry’s rampant fraud problem perpetrated with paper vouchers and unauthorised transactions,” he said. “We encourage the RBA to intervene and designate the Cabcharge payment system to make payments and taxi travel safer, simpler and more secure for all Australians,” said Mr Stollmann.
“Tyro encourages the RBA to continue to act swiftly and bring the unregulated $438 million taxi payment system to account.”