Overview
In the never-ending saga of rideshare versus taxi, it's the public that will pay, starting today. From Thursday, February 1, all rideshare, car hire and taxi providers are required by the NSW Government to pay a temporary $1 levy tax for each trip taken. Most providers, including Uber, Taxify and regular taxis, have decided to pass this tax on to the customer, which means you will pay an additional fee of $1.10 each time you ride (that's $1 plus GST).
This 'temporary' tax will be in effect for up to five years and has been put in place to help fund the NSW Government's 'industry adjustment assistance package' of up to $250 million — which is meant to help taxi and hire car licence holders adjust to the industry changes brought about by the share economy. The compensation package was announced way back in 2015 when Uber was legalised in NSW. This levy was included in the scheme back then, but the tax is only now being introduced over two years later.
On its website the NSW Government views this tax as a way to create a "level playing field across industry when it comes to accounting for the levy in business planning". While the government isn't actually taxing the public directly, each company can choose whether to front the cost or pass it on to customers. Uber, Taxify and the NSW Taxi Council have all announced that they will pass the fee onto riders, not drivers.
Uber, however, has lashed out, calling the necessity of the tax into question. In an email sent on Tuesday evening to its customers, Uber encouraged any of its users who think the tax is unfair to contact the NSW Transport Minister and 'make their voice heard'. An Uber Australia spokesperson also told The Sydney Morning Herald that the NSW Government was "still taxing the travelling public to give the taxi industry a bailout that the data shows they don't need", going on to say that "the [point-to-point] reforms have grown the pie for the whole industry and demand for taxis has remained stable and licence values have rebounded".
According to SMH, the transfer price for a taxi licence plate — which is a huge investment for taxi drivers — is still at $184,000 as of October, though it has fallen from $225,000 after ridesharing was legalised in 2015. The money accrued from this levy will go towards compensating taxi drivers for the loss in value of their plates.
NSW isn't the first to pay this tax either, with a similar levy fee already existing in Victoria. This fee is also passed on to the rider and has dropped from $2 when Uber became legal state-wide in 2016 down to $1 in June 2017.
For now though, you'll pay more for your ride home. But with more rideshare operators arriving in Sydney — including Taxify, which launched in December and is still offering 25 percent off rides, and Indian company Ola, which will arrive soon — fares are only set to get more competitive.
Via The Sydney Morning Herald.
Image: Jason Thien via Flickr.