Changes to passenger services sector a win for consumers

Changes to passenger services sector a win for consumers

Just before Christmas, on December 14, the Government released a public consultation paper containing five options to improve the small passenger services sector. Cabchooze applauds the Government’s preferred option (#4).

“I take my hat off to the regulators,” says Cabchooze director, BK Sharma. With these proposed changes, everybody wins: the industry and the consumer.”

Mr. Sharma says New Zealand’s taxi ecosystem is already quite good — the least regulated in the world. However, there are still problems, which the proposed changes will address:

High fares & inconsistent fees

Long waiting times

Drivers not taking the most cost-effective routes

Variable fare tariffs.

What the changes will mean

“The proposed changes will affect us very little,” says Mr. Sharma. “For example, we already have in place most of the changes, like fixed fares. When implemented, everyone in the industry will have to:

Carry out background checks on drivers

Require drivers to keep log books

Limit the number of hours drivers work

Require every vehicle to hold a certificate of fitness

Require every vehicle to have a security camera or apply for an exemption.”

Mr. Sharma says Uber is unlikely to be happy with the changes, as they will have to significantly alter their business model.

A blow for Uber’s surge pricing

“On New Year’s Eve in Sydney, when demand was high, Uber upset a number of consumers by applying surge pricing and charging up to eight times their normal rates! The changes will make it difficult for them to apply surge pricing unless bookings are made in advance, which will be much better for consumers.”

Mr. Sharma predicts Uber will eventually decide they’re not making enough money in New Zealand and make a soft exit.

The Government is currently asking for submissions. In February 2016, the consultation paper will be reviewed, and further changes may be made.

“I expect the changes to be fully implemented by the end of 2016,” says Mr. Sharma. “Everyone (taxis, private hire, shuttle, ride sharing) will be under the same umbrella. That’s got to be good for everyone.”

ENDS

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