A $1 tax on Uber rides to support licensed taxi drivers paves way for legalization in Melbourne


According to reports from Melbourne’s Herald Sun, Uber and other ride-sharing services are being legalized in Melbourne and the rest of the Australian state of Victoria. The Herald Sun also reported that rides will include a surcharge of $1 per ride to feed a state-run “fairness fund” to compensate taxi drivers.

While some Victorians may say better late than never, the same level of compensation will not be afforded to all drivers. Cabbies currently have to pay AU$150,000 to get their taxi licenses, but 10 years ago it was as much as AU$500,000. Altogether, that could cost Victoria as much as AU$800 million (about US$610 million).

Uber has operated illegally throughout the country for over three years, only being legalized state by state over the last several months. Even though Uber has understandably frustrated Australian cabbies, their representatives seemed satisfied with the renumeration their drivers were expecting.

Victorian Taxi Association chief executive David Samuel said the government’s approach was a “win for consumers and allows taxi business to grow and compete fairly.”

“The VTA (Victorian Taxi Association) recognizes the world in which we operate has and is changing at a rapid rate and taxi businesses should have the opportunity to compete fairly for customers into the future,” he stated over the weekend.

As Victoria legalizes, Queensland and its capital Brisbane will have legal ride-sharing by September 5. Adelaide and South Australia saw the service legalized in April, with a relaunch at the beginning of July. Tasmania is debating legislation, while Perth and Western Australia are working on a AU$27.5 million “transition assistance package” to compensate cabbies for their AU$20,000 taxi licenses.

Uber isn’t alone in Australia, as it competes with a slew of local challengers: GoCatch, Oiii and Ingogo.

All this sounds like a win for Uber, which has effectively eviscerated opposition to its service, but the company is facing pressures around the world to diversify its business interests and consolidate its global expansion. Last month, Uber sold off its costly China business to Sino-competitor Didi Chuxing. The company has also declared that its rush to get self-driving cars onto the streets of Pittsburgh reflects its need to get it right or get out.

As Uber CEO and Founder Travis Kalanick told USA Today last week, “If we don’t get the (autonomous car) software thing nailed, we’re not going to be around much longer.”


Please enter your comment!
Please enter your name here