We have completed our review of maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan or Urban and Large Regional Zones.
Unbooked taxi fare review 2022
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Consultation paper16 February 2022
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Submissions closed16 March 2022
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Draft decision1 July 2022
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Submissions closed1 August 2022
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Final decision and price determination6 September 2022
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Price determination takes effect15 September 2022
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Commission's assessment24 August 2023
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Annual adjustment of fares takes effect1 October 2023
Overview
2023 unbooked taxi fare adjustment
We have published the commission assessment of the maximum fares for unbooked taxis to apply from 1 October 2023.
We applied the fare adjustment mechanism from the 2022 maximum unbooked taxi fare determination. This will increase the maximum fares for unbooked taxi services in the Melbourne Metropolitan and Urban and Large Regional Zones by 4.1 per cent.
The commission assessment found that:
- The Fair Work Commission’s minimum wage decision increased the national minimum wage by 8.6 per cent. Labour accounts for 55 per cent of costs in the taxi cost index. This contributes 4.75 percentage points to the adjustment.
- Conversely, fuel prices have fallen since our 2022 decision by 9 per cent on average. Fuel accounts for only 7 per cent of index costs, contributing a decline of 0.65 percentage points to the adjustment.
- The fare adjustment was triggered because the sum of labour and fuel cost changes exceeded the one percentage point threshold.
2022 final decision
In September 2022, we completed our review of maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan or Urban and Large Regional Zones. These areas cover most of metropolitan Melbourne, Geelong, Ballarat, Bendigo, Frankston, Dandenong, and the Mornington Peninsula.
We released our final decision on maximum fares for unbooked taxis on 6 September 2022.
Our final decision was to increase maximum fares
Our final decision was to:
- increase the maximum fares for unbooked taxi trips that begin in the Melbourne Metropolitan or Urban and Large Regional Zones by 11.2 per cent. The increase applied equally to all tariff components (flagfall, distance rate and time rate) for each tariff period.
- increase the maximum high occupancy fee for Melbourne Metropolitan and east urban areas (Frankston, Dandenong and Mornington Peninsula), and the high occupancy variable charges for Ballarat, Bendigo and Geelong by 12.2 per cent.
- include a fare adjustment mechanism to account for changes in fuel and labour costs between fare reviews.
The cost of operating a taxi increased between our 2020 and 2022 reviews
The new taxi cost index suggested that the cost of operating a conventional taxi increased by 11.2 per cent between our 2020 and 2022 reviews. The main contributors to the 11.2 per cent increase were:
- fuel costs at 5.8 per cent
- driver labour at 4.3 per cent.
The final decision took account the Victorian government's amendments to the Commercial Passenger Vehicle Industry Act 2017 which gave the commission discretion to consider the Fair Work Commission's annual wage review and the commercial viability of operating a taxi service when setting the maximum fares.
We included a fare adjustment mechanism to apply in between fare reviews
We included a fare adjustment mechanism in our price determination which, if needed, allows maximum fares to automatically increase or decrease in between fare reviews without the need to undertake a price review. The fare adjustment mechanism only accounts for any changes in fuel prices and annual wage reviews by the Fair Work Commission.
We do not set driver earnings but our draft decision may help with attracting and retaining drivers
We do not set driver earnings but the increase in maximum fares may help resolve the driver shortage issue.
Taxi driver earnings depend on a combination of:
- the demand for and supply of commercial passenger vehicle services
- the demand for and supply of taxi drivers
- fares charged
- how revenue is shared between taxi drivers and operators.
Section 97 of the Commercial Passenger Vehicle Industry Act 2017 provides that it is an implied condition of every driver agreement that at least 55 per cent of the gross fares are paid to the driver. We do not set the 55:45 driver-operator revenue sharing ratio.
Adjustment of maximum fares applying from 1 October 2023 - Melbourne metropolitan and urban area
Maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan Zone or the urban area of the Urban and Large Regional Zone – ‘time or distance’ tariffs
| Tariff 1 ‘Day’ (9am–5pm) | Tariff 2 ‘Overnight’ (5pm–9am, excluding peak) | Tariff 3 ‘Peak’ (Fri & Sat nights 10pm–4am) | |
|---|---|---|---|
| Standard fare components | Maximum charge up to | ||
| Flagfall ($) | $4.85 | $6.05 | $7.20 |
| Distance rate ($/km) (when speed is above 21 km/hr) |
$1.878 | $2.088 | $2.299 |
| Waiting time ($/min) (when speed is below 21 km/hr) | $0.658 | $0.731 | $0.805 |
| Other fare components (applicable to tariffs 1, 2 and 3) | Maximum charge up to | ||
| High occupancy fee (a) | $16.35 | ||
| Airport taxi rank fee (b) (For trips from the airport rank) | Pass-through | ||
| Holiday rate (c) | Tariff 3 rates | ||
| CPV levy recovery fee | Pass-through | ||
| CityLink and EastLink tolls (d) | Pass-through | ||
| Cleaning fee | Up to a maximum of $120 | ||
Maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan or Urban Zones – ‘time and distance’ tariffs
| Tariff 1 ‘Day’ (9am–5pm) | Tariff 2 ‘Overnight’ (5pm–9am, excluding peak) | Tariff 3 ‘Peak’ (Fri & Sat nights 10pm–4am) | |
|---|---|---|---|
| Standard fare components | Maximum charge up to | ||
| Flagfall ($) | $4.85 | $6.05 | $7.20 |
| Distance rate ($/km) (applies at all times) |
$1.553 | $1.725 | $1.908 |
| Waiting time ($/min) (applies at all times) | $0.399 | $0.438 | $0.473 |
| Other fare components (applicable to tariffs 1, 2 and 3) | Maximum charge up to | ||
| High occupancy fee (a) | $16.35 | ||
| Airport taxi rank fee (b) (For trips from the airport rank) | Pass-through | ||
| Holiday rate (c) | Tariff 3 rates | ||
| CPV levy recovery fee | Pass-through | ||
| CityLink and EastLink tolls (d) | Pass-through | ||
| Cleaning fee | Up to a maximum of $120 | ||
Adjustment of maximum fares applying from 1 October 2023 – Large regional area
Maximum fares for unbooked taxi services that begin in the large regional area of the Urban and Large Regional Zone, including Geelong, Ballarat and Bendigo – ‘time or distance’ tariffs
| Fare component | Maximum charge | |
|---|---|---|
| Standard fare components | ||
| Flagfall ($) | $4.15 | |
| Distance rate ($/km) (when speed is above 21 km/hr) |
$2.128 | |
| Waiting time ($/min) (when speed is below 21 km/hr) | $0.744 | |
| High occupancy trips | ||
| For trips with 5 or more passengers: not applicable if the commercial passenger vehicle does not have the capacity for carriage of 5 or more passengers in fixed seats. ‘Fixed seats’ does not include positions for the carriage of persons in wheelchairs. | ||
| Flagfall ($) | $4.15 | |
| Distance rate ($/km) (applies when speed is above 21 km/hr) | $3.220 | |
| Waiting time ($/min) (applies when speed is below 21 km/hr) | $1.127 | |
| Other fare components | ||
| Late night fee (For trips commencing between 7pm on Friday and Saturday nights through to 6am the following morning; and from midnight to 6am on all other days) | $3.95 | |
| Holiday rate (a)(b) | $4.85 | |
| CPV levy recovery fee | Pass-through | |
| CityLink and EastLink tolls (c) | Pass-through | |
| Airport taxi rank fee (d) (For trips from the airport rank) | Pass-through | |
| Cleaning fee | Up to a maximum of $120 | |
Maximum fares for unbooked taxi services that begin in the large regional area of the Urban and Large Regional Zone, including Geelong, Ballarat and Bendigo – ‘time and distance’ tariffs
| Fare component | Maximum charge | |
|---|---|---|
| Standard fare components | ||
| Flagfall ($) | $4.15 | |
| Distance rate ($/km) (applies at all times) |
$1.729 | |
| Waiting time ($/min) (applies at all times) | $0.568 | |
| High occupancy trips | ||
| For trips with 5 or more passengers: not applicable if the commercial passenger vehicle does not have the capacity for carriage of 5 or more passengers in fixed seats. ‘Fixed seats’ does not include positions for the carriage of persons in wheelchairs. | ||
| Flagfall ($) | $4.15 | |
| Distance rate ($/km) (applies at all times) | $2.851 | |
| Waiting time ($/min) (applies at all times) | $0.618 | |
| Other fare components | ||
| Late night fee (For trips commencing between 7pm on Friday and Saturday nights through to 6am the following morning; and from midnight to 6am on all other days) | $3.95 | |
| Holiday rate (a)(b) | $4.85 | |
| CPV levy recovery fee | Pass-through | |
| CityLink and EastLink tolls (c) | Pass-through | |
| Airport taxi rank fee (d) (For trips from the airport rank) | Pass-through | |
| Cleaning fee | Up to a maximum of $120 | |
Feedback from stakeholders
We sought stakeholder feedback on our consultation paper and draft decision. We received 14 written submissions from stakeholders including taxi operators, taxi drivers, booking service providers and industry bodies. Submissions are available in the Resources tab.
We also held a public forum on our draft decision on 19 July 2022. A recording of the forum and the presentation slides are available in the Resources tab.
We considered all matters raised by stakeholders in making our final decision.