03 October 2015
by Ben Potter
Uber takes big bite out of taxi licence plate valuations
The value of capital city taxi licence plates has fallen more more than $600 million since January under the onslaught from competitive ride-sharing services such as Uber.
Sydney's 5,500 metro taxi licences have seen their value fall from an average $375,000 in January to about $300,000 in September, a combined loss of just over $400 million.
The losses come as UberX continues to make inroads into the Sydney market even as the NSW government fights a rearguard action against the legally ambiguous smartphone-based ridesharing service and has suspended the vehicle registrations of 40 UberX drivers for three months.
Melbourne's 4300 metro licence plates have fallen from about $290,000 each in January to about $250,000 last month, a loss of $170 million. UberX is different to the UberBlack limousine service, which operates legally as a hire car service.
Blair Davies, chief executive of the Australian Taxi Industry Association, accused the San Francisco-based Uber – which was valued at $US51 billion in July – of bullying governments to get its way.
"It's almost been two separate pathways, one in which Uber has been able to bully governments to change laws to accommodate them, and the French example of saying to Uber, 'these are our laws and you have got to comply with them'," said Mr Davies, who is in the US for a taxi regulation conference.
Taxi licence values in other capital cities have also fallen but the losses in Sydney and Melbourne this year are the best gauge of Uber's impact.
The economies of these cities haven't been flattened by the collapse of the mining boom – like Perth and Brisbane. Price falls in Melbourne taxi plates this year also can't be blamed on the deregulation of the Victorian taxi industry in 2014.
Melbourne plates have fallen from about $500,000 in 2010 – for a combined loss of nearly $1 billion –thanks mostly to the deregulation, which allowed an unlimited number of plates to be issued at a fixed annual fee.
Brisbane taxi plate values have fallen from an average $515,000 last December to about $480,000, a combined loss of about $80 million for the approximately 2,200 metro plate owners. Adelaide's 1100 metro plates have lost a combined $55 million.
Perth cabbie Daniel Niklas paid $338,000 for his plates 18 months ago and claims to have lost a fifth of his business to UberX. Mr Niklas wants the state government to compensate him.
Mr Davies, whose lobby is spearheading the industry's campaign against UberX, said the losses were hitting ordinary people.
"The people who invest in licence plates are small time investors (and) things that put risk into that make it difficult for people to trade their licences," Mr Davies said.
Regulators in the states and territories are torn between prosecuting Uber drivers and tweaking their regulatory schemes to accommodate the popular service.
The ACT government said this week it would adjust its regulations to bring ride-sharing services into the fold, sparking a furious reaction from the taxi industry.
Victorian premier Daniel Andrews indicated the state government was disposed to regulate Uber as "pre-booked only trade" – even as the state's Taxi Services Commission is prosecuting Uber drivers. The Western Australian government is mulling a similar recommendation.
But the distinction between "pre-booked" and "street-hailing" taxi services may be hard to maintain because Uber's GPS-based smartphone app enables passengers to "pre-book" on the spot.
Uber is popular with consumers because it brings more cars into the market at times of high demand and the app that deducts the fare from a pre-registered credit card, saving passengers the hassle of fumbling with their wallets in the car.
Carsharing services such as carnextdoor.com – another smartphone based service that allows owners to rent their cars out to neighbours when not using them themselves – are adding to the range of transport services available to consumers.
These services often undercut regular car rental firms too, adding to concerns that investors in traditional services are being left high and dry by nimble, low cost challengers that fall between the cracks of existing regulations.