Cabcharge dominance tackled by Victorian inquiry

The market dominance of Cabcharge in taxi payments and the level of taxi fares overall will be considered by the Taxi Industry Inquiry in Victoria being undertaken by former competition regulators Allan Fels and David Cousins.

One theme of the inquiry's first "background paper", or at least Fel's media appearances in relation to it, is the "high" level of cab fares in Victoria.

There are many factors at play in setting taxi fares, and the role of the payments providers, and their 10 per cent surcharge (in most cases) on debit and credit card payments, is only one of them.

The Victorian Treasury, in its submission, focuses in the licensing regime and the passive ownership of taxi licences by investors with no responsibility for service quality, nor much interest in the low earnings of drivers.

The inquiry paper only mentions in brief the "market power" of Cabcharge.

Estimates of Cabcharge's market share are contested and an amusing exchange of letters between Cabcharge and Fels features on the inquiry's website.

Cabcharge insists that rival payment providers (such as Taxis.net, Live and Cabfare) have a significant market share between them. Fels disagrees.