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
Overview
We have completed our review of maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan or Urban and Large Regional Zones, which 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 is to increase maximum fares
Our final decision is 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 will apply equally to the 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.
Costs of operating a taxi have increased since our last review in 2020
The new taxi cost index suggests that the costs of operating a conventional taxi have increased by 11.2 per cent since our last fare review in 2020. The main contributors to the 11.2 per cent increase are:
- fuel costs at 5.8 per cent - accounts for the change in fuel costs since our last review in 2020
- driver labour at 4.3 per cent: accounts for the Fair Work Commission's annual wage review determination used as the cost inflator for driver labour instead of the wage price index (transport, postal and warehousing).
The final decision takes into account the Victorian government's recent 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 have included a fare adjustment mechanism to apply in between fare reviews
We have included a fare adjustment mechanism in our price determination which, if needed, would allow maximum fares to automatically increase or decrease in between fare reviews without the need to undertake a price review. The fare adjustment mechanism will only account for any changes in fuel prices and next year's annual wage review 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, which is currently at a minimum 55:45 ratio.
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.
Maximum fares applying from 15 September 2022 - 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 ($) | $4.65 | $5.80 | $6.90 |
| Distance rate ($/km) (when speed is above 21 km/hr) |
$1.804 | $2.006 | $2.208 |
| Waiting time ($/min) (when speed is below 21 km/hr) | $0.632 | $0.702 | $0.773 |
| Other fare components (applicable to tariffs 1, 2 and 3) | Maximum charge up to | ||
| High occupancy fee (a) | $15.70 | ||
| 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 $120 | ||
Maximum fares for unbooked taxi services that begin in the Melbourne Metropolitan or Urban Zones – ‘time and distance’ tariffs
| Tariff 1 ‘Day’ (9am–5pm) | Tariff 2 ‘Overnight’ (5pm–9am, excluding peak) | Tariff 3 ‘Peak’ (Fri & Sat nights 10pm–4am) | |
|---|---|---|---|
| Standard fare components | Maximum charge up to | ||
| Flagfall ($) | $4.65 | $5.80 | $6.90 |
| Distance rate ($/km) (applies at all times) |
$1.492 | $1.657 | $1.833 |
| Waiting time ($/min) (applies at all times) | $0.383 | $0.421 | $0.454 |
| Other fare components (applicable to tariffs 1, 2 and 3) | Maximum charge up to | ||
| High occupancy fee (a) | $15.70 | ||
| 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 $120 | ||
Maximum fares applying from 15 September 2022 – Large regional area
Maximum fares for unbooked taxi services that begin in the large regional area of the Urban and Large Regional Zone, including Geelong, Ballarat and Bendigo – ‘time or distance’ tariffs
| Fare component | Maximum charge | |
|---|---|---|
| Standard fare components | ||
| Flagfall ($) | $4.00 | |
| Distance rate ($/km) (when speed is above 21 km/hr) |
$2.004 | |
| Waiting time ($/min) (when speed is below 21 km/hr) | $0.715 | |
| High occupancy trips | ||
| For trips with 5 or more passengers: not applicable if the commercial passenger vehicle does not have the capacity for carriage of 5 or more passengers in fixed seats. ‘Fixed seats’ does not include positions for the carriage of persons in wheelchairs. | ||
| Flagfall ($) | $4.00 | |
| Distance rate ($/km) (applies when speed is above 21 km/hr) | $3.093 | |
| Waiting time ($/min) (applies when speed is below 21 km/hr) | $1.083 | |
| 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) | $3.80 | |
| Holiday rate (a)(b) | $4.65 | |
| 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 $120 | |
Maximum fares for unbooked taxi services that begin in the large regional area of the Urban and Large Regional Zone, including Geelong, Ballarat and Bendigo – ‘time and distance’ tariffs
| Fare component | Maximum charge | |
|---|---|---|
| Standard fare components | ||
| Flagfall ($) | $4.00 | |
| Distance rate ($/km) (applies at all times) |
$1.661 | |
| Waiting time ($/min) (applies at all times) | $0.546 | |
| High occupancy trips | ||
| For trips with 5 or more passengers: not applicable if the commercial passenger vehicle does not have the capacity for carriage of 5 or more passengers in fixed seats. ‘Fixed seats’ does not include positions for the carriage of persons in wheelchairs. | ||
| Flagfall ($) | $4.00 | |
| Distance rate ($/km) (applies at all times) | $2.739 | |
| Waiting time ($/min) (applies at all times) | $0.594 | |
| 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) | $3.80 | |
| Holiday rate (a)(b) | $4.65 | |
| 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.