Victorian taxi industry waves the white flag


After a year-long campaign of misinformation, the Victorian Taxi Association (VTA) has finally raised the white flag. The Guardian reports:

Victoria’s Taxi Association has abandoned industrial action and campaigning as a response to Uber, admitting the industry has not responded well to customer criticism.

On Monday the association’s chief executive, David Samuel, announced an initiative calling for honest feedback from taxi customers so that the industry could adapt and respond.

To say they haven’t responded well to customer criticism is putting it mildly. As customers unhappy with the level service, availability, and convenience of traditional taxis have gradually abandoned them for new competitors like Uber, the VTA has responded with fear-mongering and calls for government crackdowns.

Their favourite claim was that Uber is unregulated, and therefore unsafe.

On the first point, Uber drivers is not “unregulated”. They are regulated by the same road rules and laws that cover all drivers. They are also subject to a variety of safety measures, which include third party criminal background checks.

Perhaps most importantly, there are quality control and feedback measures embedded in the Uber app, which are intrinsic to their business model. As I argued in the Herald Sun in May, this not only makes Uber (and competitors like Lyft) more convenient than traditional taxis, it also makes them safer.

At the very least, the Victorian Taxi Association seems to have finally realized that this strategy will not work.

The industry’s only chance of survival is to adapt, innovate, and compete with Uber — and future competitors — in the marketplace. Something which, so far, they have failed to do.

But to be fair, this isn’t entirely the taxi industry’s fault. Decades of government protection insulated the industry from competition, lowering the quality of service, and making them less responsive to customer demands. The industry benefited from this protection for decades, time will tell if it will be the cause of their downfall.

The Victorian Taxi Association’s olive branch is a step towards positive legislative reform. Perhaps if they had spent less time attacking their critics — like yours truly — we might have got to this point sooner.

For more on the sharing economy, check out the IPA’s paper by Chris Berg and Darcy Allen: The sharing economy: How over-regulation could destroy an economic revolution.