Credit card fees for Victoria cabs halved

cab charge

Cab trips are about to cost a little bit less under new Victorian government reforms to the taxi industry.

Starting on Saturday, surcharges for paying a cab fare with a credit or debit card will be halved from 10 per cent excluding GST to five per cent inclusive.

In an effort to promote competitiveness between taxi operators, a $100 fare with an added $11 surcharge will now cost $105 under the new scheme.

Transport Minister Terry Mulder said the reforms put the customer first, and would cut the $30 million annual figure that taxi passengers pay in card fees.

“One of the key recommendations from the taxi inquiry was to rapidly decrease the cost of using credit or debit cards,” Mr Mulder said on Friday.

Cab operators pay around 0.4 per cent to process Visa and Mastercard payments and 3.4 per cent for American Express.

Taxi Services Commission chair Graeme Samuel said the electronic payment surcharge reduction was part of the taxi reform package that will be launched throughout 2014.

“It is pure usury. And it is not justified on any basis,” Mr Samuel said.

“We take on the challenge of reforming an industry that had been enshrouded in anti-competitive legislation for so many decades.”

The Victorian government last May unveiled changes to the industry including an overhaul of fares, issuing new cab licences and drivers being required to undertake a mandatory knowledge test of Melbourne’s streets.

The new taxi licences, costing $22,000 annually, could also be introduced earlier than originally planned.

Mr Samuel said the value of taxi licences, costing more than $500,000 at their peak in 2012, is a serious problem with “powerful forces” trying to maintain high prices.

“It shouldn’t be remaining as high as it has been and there are some very powerful forces out there in the industry that are trying to maintain a very high level for licences,” Mr Samuel said.

“I anticipate in the not too distant future we will be issuing some of the new licences in an endeavour to bring down the lease fees.”

Source: The Age