Taxi industry puts unlicensed cabs on the road as Uber bites into old business model

Sick of fighting Uber, the taxi industry has decided to join them at their own game – by putting a fleet of unlicensed taxis on the road.

According to The Age, the new cabs look and feel just like a taxi, and charge the same for a trip. But they don’t have taxi licences, and pay no taxi registration fee to the government. As recently as September taxi licence plates were selling for $165,000.

„The implication seems to be that if 13CABS can do it, anyone can provide a service without a licence,“ said Professor Allan Fels, former head of the Australian Competition and Consumer Commission and now member of the Uber global advisory board. „This would also seemingly cut the value of licences to zero.“

After inquiries from Fairfax Media, booking service 13CABS confirmed that six private-hire taxis were operating on the Mornington Peninsula. The cabs are owned and run by taxi operators in the region, with 13CABS dispatching jobs to them. Fairfax Media has been told such fleets are operating in other states, including NSW and South Australia.

General manager of 13CABS, David Samuel, said owners were unwilling to buy new taxi licences given the uncertainty surrounding the industry. „These operators are reluctant understandably to want to invest large sums in a taxi plates,“ he said. He said there was no plan to roll out the service further. But licence holders fear this is the beginning of the end for any remaining value in their licences.

„We bought a perpetual licence in a regulated industry. And now we’re told ‚too sad too bad‘,“ said a spokeswoman for the Victorian Taxi and Hire Car Families. „Who’s going to pay my debt now?“

The state government has already announced plans to scrap the licence fee, allowing Ubers, taxis and hire cars to take to the roads without paying for the privilege. But that legislation has not been drafted yet – leaving taxi operators to play in a grey area. The decision to pre-empt the scrapping of the licence fee means licences are essentially worthless at the moment, says Peer Lindholdt, editor of taxi magazine OZ Cabbie.

„One taxi operator recently told me he approached the Taxi Services Commission asking them what would happen to him if he handed back his taxi plate and put a private registration plate on. And he was told, ‚well, probably nothing‘. „The government cannot stop them. Because they aren’t clamping down on Uber they cannot clamp down on 13CABS.“

Aaron de Rozario, CEO of the Taxi Services Commission, told Fairfax Media the commission was aware of the unlicensed cabs and „is working with 13CABS to understand how they intend to operate these vehicles“. Fairfax Media understands the commission concedes the new vehicles are operating in a significant grey area.