NSW Introduces Levy On Taxi and Ridesharing Services To Fund Industry Assistance Package

Wednesday 31 January 2018 @ 10.34 a.m. | Legal Research | Trade & Commerce

The NSW Government will be applying a $1 levy (plus GST), on each trip in taxis, hire cars and ridesharing services, from 1 February 2018.  The levy, which was announced two years ago, is part of the NSW Government’s “industry adjustment assistance package”, introduced following the legalisation of ridesharing services such as Uber.  The levy will be in place for no more than five years, or until it raises the amount required to fund the package.  Service providers can choose to absorb the cost of the levy, or pass it on to passengers.

The introduction of the levy is a result of the commencement by proclamation of the remaining provisions of the Point to Point Transport (Taxis and Hire Vehicles) Act 2016 (NSW) and the Point to Point Transport (Taxis and Hire Vehicles) Regulation 2017 (NSW).

The NSW Government’s $250 million industry assistance package includes:

  • Up to $98 million for transitional assistance for eligible taxi licence holders
  • Up to $142 million in additional assistance for eligible taxi licence holders facing difficulty as a result of the changes
  • Up to $10 million for an additional assistance scheme for eligible hire car licence holders.

Transitional Assistance for Taxi Licence Holders

Under the first stage of the industry adjustment assistance package, the NSW Government issued $200,000 payments to taxi licence holders who acquired their licences before 1 July 2015 and held their licences until the payments were made.  According to the Government’s website, $92 million has been distributed to approximately 4,000 eligible taxi-cab licence holders, representing 99 per cent of possible applicants. 

This first stage of assistance is now closed, however, applications for the hire car licence holders assistance scheme are open until 13 April 2018.

Additional Assistance

The additional assistance for “eligible taxi licence holders facing difficulty as a result of the changes” is being overseen by the Taxi and Hire Vehicle Industries Assistance Panel.  The NSW Government is advising that more information on how to apply for this assistance will be available in the coming months.

Stakeholder Comments

Ridesharing service Uber has spoken out against the levy, with a spokesman telling ABC News:

“The NSW Government's point to point transport reforms have given people more choice and expanded the reach of safe, reliable and affordable transport options across the state…

The reforms have grown the pie for the whole industry and demand for taxis has remained stable and license values have rebounded.

We are puzzled as to why the NSW Government is still taxing the traveling public to give the taxi industry a bailout that the data shows they don't need.”

However, the Sydney Morning Herald said that while agreeing that passengers should not have to “foot the cost” of the levy, deputy chief executive of the NSW Taxi Council, Nick Abrahim, said the compensation "is not enough" for many people who were experiencing financial hardship as a result of the government's changes.

The Sydney Morning Herald reported:

“The average transfer price of taxi licence plates in Sydney fell from about $225,000 just before the government opted to legalise ride-sharing in late 2015 to as low as $150,000 in the months afterwards. In October, they were trading at about $184,000.”

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