Proposal to increase maximum taxi fare reflects higher minimum wage, running costs

The Essential Services Commission has released its draft decision on the 2024 taxi review, recommending an increase to maximum fares payable when a taxi is hailed from the street or at a taxi rank. 

The proposal to recommend a fare increase of 5.7 per cent is primarily driven by the 3.75 per cent increase in the minimum wage announced by the Fair Work Commission earlier this month and the increase in vehicle and insurance costs since the last review in 2022. 

The proposed change will increase the cost of a 3-kilometre trip by $0.84 and will add $3.22 to a trip from Melbourne’s central business district to Tullamarine airport. 

The commission’s review also considered the maximum surcharge that applies to fares paid with non-cash options. The draft decision recommends keeping the maximum surcharge steady at 4 per cent for payments made by credit or debit card, and 6 per cent for charge cards like Cabcharge.

The draft decision covers trips starting in metropolitan Melbourne, Frankston, Dandenong, the Mornington Peninsula, Geelong, Ballarat and Bendigo. It does not cover rideshare operators or pre-booked fares.

Marcus Crudden, Executive Director of Price Monitoring and Regulation at the commission, said the draft decision strikes a balance between protecting consumers from paying too much and ensuring taxis remain an accessible option for those who need them.

“We heard in submissions that taxi operators and drivers were comfortable with the methodology we used to arrive at our draft decision to increase maximum fares by 5.7 per cent and keep the caps on non-cash payment surcharges on hold,” said Mr Crudden.

“Passengers now have more choice than ever, with rideshare operators and taxis competing strongly for patronage. 

“Victorians’ transportation needs continue to evolve post-pandemic, and although demand for taxis is still to fully recover, the industry is working hard to ensure taxis remain a viable option for consumers, passengers and operators alike,” said Mr Crudden.

The draft decision is open for consultation on Engage Victoria until 12 July 2024. The commission will release its final decision in early September 2024.