‘Unbooked’ taxi fares increase to address higher costs and a driver shortage

For the first time since 2014, the maximum fares for ‘unbooked’ taxis will increase in response to higher fuel costs and a driver shortage.

The Essential Services Commission today released its final decision on the maximum fare that can be charged for taxis hailed from the street or caught at a rank, following a biennial review.

Director of pricing Marcus Crudden said a rise of 11.2 per cent would come into effect on 15 September 2022 to help ensure the service remains viable.

“Our review indicates running and operating costs have risen 11.2 per cent, and the maximum fare is increasing by the same amount to help keep unbooked taxis on the road,” Mr Crudden said.

“Operators are dealing with significantly higher fuel prices and a driver shortage in the face of recovering demand, so the fare decision considers those issues to help ensure the service is readily available."

“One of the commission’s main objectives is promoting the long-term interests of Victorian consumers and that includes being able to hail a taxi when you need one.”

Mr Crudden said the increase alone would not solve the driver shortage in a tight labour market but could help operators to attract new drivers.

The fare change equates to about $1.50 extra for a three-kilometre trip in Melbourne’s central business district (CBD), or $5.60 to travel from the CBD to the international airport.

“We listened to views raised at stakeholder meetings and a public forum, and the vast majority of feedback was supportive when our draft decision proposed increasing the maximum fare,” he said.

The commission’s determination includes a fare adjustment mechanism which enables the maximum fares to change before the next review in 2024.

“It will account for high and fluctuating fuel prices and the Fair Work Commission’s annual wage review, so the maximum fare could increase or decrease in October 2023,” said Mr Crudden.

In a separate decision, the commission kept the maximum surcharges for non-cash payments in taxis steady at 4 per cent for card payments, while Cabcharge payment instruments will continue to attract a 6 per cent surcharge.

Unbooked services include hailing a vehicle from the street or taking a taxi from a rank. Booked services are arranged through an app, online or over the phone, and are not regulated by the commission.