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On why taxis cost so much

By johnboy - 5 August 2009 24

In the recent discussion on taxi fares Stone made a comment that I considered worthy of greater prominence:

    #22 posted by Stone
    (Newbie)
    01:13, 5 Aug 2009

    Expensive?

    If you think it is expensive, you think people who drives taxis are making good money, however, why don’t you drive it?

    You are not on the job, you know nothing about it. The ACT govenment wants too much out of a taxi, that’s why it is “expensive”. The taxi rego costs about $8,000 a year which only cost about $2000 in NSW. The taxi plate leasing costs around $20,000 a year, and the insurance costs another $10,000(for vechile & driver). And all this still not include the running cost. Taxi Opereator needs to pay taxi base bout $1,300 each month for the base radio fee as well. If you want to put a car on road to do the business, you need to pay $1600 to fit all the equipments in and all of that cost a lot. There is a camera rental fee cost $1,280 which is stupid, as the camera is useless & hopeless. PS. one of the driver had a fight with a crazy oz animal who was asking cash from the driver, when the police try to access the camera hard drive to get that man’s picture, it was nothing there. We pay $1,280 for nothing!!

    Now you still think it’s expensive? How much do you think the driver will get? Let me tell you that the driver only gets half of what you paid. And that is before GST and Tax. The driver has to pay GST and Income Tax to the govenment. If I pay you $25 ask you to drive me to somewhere around 20km, specially when I was drunk and crazy as a dog, would you like to take me for $20? I rather pay you more to drive me back to home safely!

    Everyone needs to pay their bills and live in this city. If you have so much to say about the taxi industry, why don’t you write something to the govenment with all of your question marks about why canberra taxis are so danm expensive?

What’s Your opinion?


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24 Responses to
On why taxis cost so much
dalryk 5:30 pm 05 Aug 09

youami said :

If you are comparing fares to fares in other cities, you cannot simply do that because each city operates and is designed differently, Sydney has trains and nightride buses etc that compete against taxi patronage.

Sorry, why can’t we compare taxis in different cities? Isn’t that the easiest and most logical comparison to make to work out whether one particular set of taxis are too expensive?

Like Clown Killer said, taxis in melbourne are generally less than half the cost of a similar ride in Canberra, and I want to know why. Sure Melbourne is bigger, and has a different geodemographical setup, but I can’t see how that can equate to a 100% price difference.

Sounds like these artificially limited licences have a fair bit to do with the problem…

OYM 5:17 pm 05 Aug 09

As an ex cabbie, I think few people realise the bad deal drivers get. Someone told me when I got my pube job that it was like winning lotto. They were right, comparitively.

Cab driving has lots of plusses, but the average driver gets pretty sick of 12 hour shifts, drunks, psychos, you name it. I’ve had days where I start out and circumstances worked against me and I end up making nothing for the first 2 hours of work. This is especially the case in January each year.

Owning a cab is a bit like owning an investment property. Some go backwards financially, some make a bit and those that manage them well and own more than one can end up doing very well.

Clown Killer 3:21 pm 05 Aug 09

What are we comparing the ‘expensive’ fares to?

In my case Melbourne and Perth – both just a little more than half the price over a similar distance.

TP 3000 2:08 pm 05 Aug 09

CapitalK said :

Take the cab number and write a letter of complaint – the driver will be dealt with accordingly.

I followed a cab that was doing 80k’s up Antil Street, cut someone off when he turned into Madigan Street, I took the cab number & complained to Canberra Cabs, I received no response & I saw him do it again 2 weeks later (same driver, different cab).

From my many years of experience taxi, DC & DX n umber plated vechiles have the worst drivers at the wheel.

SheepGroper 1:39 pm 05 Aug 09

CapitalK said :

Take the cab number and write a letter of complaint – the driver will be dealt with accordingly.

Emails work just as well. Although it may be a week or three before someone gets back to you for more information, you’d best note down everything you remember about the incident and time/date/place picked up and destination and the taxi.

youami 1:24 pm 05 Aug 09

eyeLikeCarrots said :

I’m happy to pay a fair fee for a taxi ride.

I’m also entitled to get into a cab and not be refused because the driver does not want to drive to the destination, it being too short a trip and him being pissy that he waited a whole 2 minutes in the rank while I waited 20 minutes freezing my bollocks off.

Or be futtzed around because he A) does not know the way to the suburb or B) how to use the god damn GPS that is 16 inches from his face.

Or sit in a cab that smells like an ashtray…. or have the driver gabbing on his mobile phone while drinking his coke, tearing up Commonwealth ave at 105km/hour…

Little wonder I rarley drink in the city.

When I meet a great cabbie, I will ask for his card.

I think you find it is a legal requirement for a driver to take you to your destination once you have got into the taxi.

I have found drivers in Canberra reasonably alert and they know the city. Like anything, you get some good and you get some not so good. I have only once not had a cab turn up at my address, all other times they turn up within ten minutes.

Oh and why wouldn’t you pay for the privilege of door-to-door service. What are we comparing the ‘expensive’ fares to? Compared to walking? Compared to getting a bus? Of course it is more expensive! If you are comparing fares to fares in other cities, you cannot simply do that because each city operates and is designed differently, Sydney has trains and nightride buses etc that compete against taxi patronage. You are comparing apples to oranges. If you think taxis are expensive, don’t use them! There are choices, admittedly for most Canberrans it will most likely involve walking :).

Welcome to a capitalistic society = user pays!

Oh I also agree with Ian, suck it up re GST and tax, we all have to.

peterh 1:20 pm 05 Aug 09

probably why cabexpress are based in queanbeyan – the NSW rate is much lower. The problem is that the aerial monopoly extends to businesses like hotels. The cab service that the hotel recommends is not both operators in town, it is one of the aerial services, and if you are from sydney, elite is known to you.

CapitalK 1:17 pm 05 Aug 09

eyeLikeCarrots said :

I’m happy to pay a fair fee for a taxi ride.

I’m also entitled to get into a cab and not be refused because the driver does not want to drive to the destination, it being too short a trip and him being pissy that he waited a whole 2 minutes in the rank while I waited 20 minutes freezing my bollocks off.

Or be futtzed around because he A) does not know the way to the suburb or B) how to use the god damn GPS that is 16 inches from his face.

Or sit in a cab that smells like an ashtray…. or have the driver gabbing on his mobile phone while drinking his coke, tearing up Commonwealth ave at 105km/hour…

Little wonder I rarley drink in the city.

When I meet a great cabbie, I will ask for his card.

Take the cab number and write a letter of complaint – the driver will be dealt with accordingly.

eyeLikeCarrots 12:09 pm 05 Aug 09

I’m happy to pay a fair fee for a taxi ride.

I’m also entitled to get into a cab and not be refused because the driver does not want to drive to the destination, it being too short a trip and him being pissy that he waited a whole 2 minutes in the rank while I waited 20 minutes freezing my bollocks off.

Or be futtzed around because he A) does not know the way to the suburb or B) how to use the god damn GPS that is 16 inches from his face.

Or sit in a cab that smells like an ashtray…. or have the driver gabbing on his mobile phone while drinking his coke, tearing up Commonwealth ave at 105km/hour…

Little wonder I rarley drink in the city.

When I meet a great cabbie, I will ask for his card.

random 11:25 am 05 Aug 09

Found this interesting PDF of Australian taxi industry benchmarks/averages which says that drivers get $76,950/year in fares on average. 50% of that pre-tax is not a good income.

Inappropriate 11:16 am 05 Aug 09

I don’t understand why taxi plates are artificially limited.

jimbocool 10:43 am 05 Aug 09

No question that the drivers aren’t making much money. The complaint about the cost of a plate is a furphy though – the cost of the plates is set by the market. If a plate costs $250k, that’s the market price which factors in an appropriate return for the risk. If a plate is being leased at $20k, that’s not a bad return on the original investment, 8%, and again the market would be setting the lease price. Lessors in turn would be taking on a lease based on the return they expect to get.

So that’s the finance perspective. From an economics perspective we have the classic outcome of a monopoly – too little provided at too high a cost. Everyone loses, even the plate owners, as a competitve market increases profits.

AG Canberra 10:29 am 05 Aug 09

Ian – they bought out the hire Car plates a few years ago – and now any suitable organisation (or sole operator) is able to apply and get a set of H plates on a monthly lease basis…..

Yes – doing this with the 250 plus taxi plates out there @ $250k each will cost us tax/rate payers a bit more cash…..

Ian 10:19 am 05 Aug 09

The big thing that has screwed up taxi pricing is that taxi licenses are treated as a valuable, tradeable commodity. That is just stupid! Licenses should not be regarded as assets – what should happen is that anyone who meets a certain set of criteria should be paying an annual license fee, with freedom of entry and exit to and from the industry. (Compensation of existing license holders is a separate, and difficult question).

As for the other costs, the ACT rego fee is within the ACT Govt’s control, and if it is way out of kilter with other states ought to be fixed. The other costs are just normal costs of business – insurance, yes expensive, but taxis are hardly alone there. As for the comment about paying tax and GST, boo hoo, so what, everyone has to pay those out of their income.

AG Canberra 9:48 am 05 Aug 09

I don’t think any of us are under the illusion that the drivers are the ones making the money. Maybe the drivers could start demanding 60% instead of the ‘standard’ 50% of the fare…..

I once answered a job vacancy for taxi drivers and put that exact proposal to the owner. He said ‘mate – if I pay you 60% then everyone is going to want that much….” so I said ‘well – how much do you need a driver?’. He knocked me back – but a week later rang up offering me 55% – but by that stage I had started another job.

The drivers do not make good money for the hours worked and the conditions they have to put up with….

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