Ms PATTEN (Northern Metropolitan) — I too rise to speak to the Commercial Passenger Vehicle Industry Bill 2017. It has been 12 months since I introduced my ridesharing bill into this house, which was a response to this government’s and the previous government’s inactivity on this issue, and also in recognising these emerging technologies.
The ridesharing industry has been around for a number of years — about five years in Victoria or probably even slightly longer. But this industry is emerging, and this industry needs to be addressed. My bill would have protected the ridesharing drivers from prosecution, it would have protected the passengers undertaking rideshare journeys and it would have ensured that our laws kept pace with innovative industries. It was also a bill that did not dissolve taxi licences and therefore did not necessitate compensation or a levy, and it preserved rank and hail work as the domain of taxis.
But on the same day, by chance, that I introduced my bill and started the second-reading debate the government announced that they too would be introducing legislation to regulate ridesharing by the end of 2016.
Mr Morris — 2016?
Ms PATTEN — The end of 2016, Mr Morris. So I — somewhat generously, I feel — adjourned the debate on my bill on that basis. Now in June 2017 we see the Commercial Passenger Vehicle Industry Bill 2017 in this chamber. It has been a long delay. In many ways that has found us lagging behind the rest of Australia. Victoria is one of the last jurisdictions, both in Australia and abroad, to address this disruptive technology and the emergence of ridesharing. This is a salutary point that we should note. The annual Global Innovation Index, released last week, saw Australia slip a further four places to 23rd in global rankings. We had already gone from 17 to 19 in 2016, so we are on a steady decline. I think this is a dangerous trend and one that I hope our Minister for Small Business, Innovation and Trade is taking a special interest in. He should be very, very concerned about it, because we know the Victorian economy is experiencing real declines in a lot of our traditional industries — in particular the automotive industry and other manufacturing industries — so this government should be driving innovation and that should be the lifeblood of our future prosperity.
I have to say I think the delay — the consistent, constant delays — in the passage of this legislation probably indicates that we are not addressing innovation with the speed and enthusiasm that we should be. Innovation in the commercial passenger vehicle industry is not new. We have seen disruptive technologies in the commercial passenger vehicle industry for almost centuries. I would like to remind members of some examples of disruption in this industry. It is interesting, because one was actually in San Francisco, which by coincidence is where Uber was first established. In the early 1900s the car became quite an affordable product. Cars were flooding the market in 1914, and there was a recession, so some innovative car owners would offer ridesharing to passengers of cable cars in San Francisco. For the same price as a cable car ticket, you could be a passenger in a vehicle that would take you up the steep hills of San Francisco. This craze — it was called ‘jitney’, for some reason; I have never discovered why — went across and within nine months the whole of America was offering jitney rides. This of course upset the established cable car industry, which colluded with government to prohibit these innovative drivers from using their own personal vehicles to provide ridesharing, as it were.
Then around World War II the US government, in response to the shortage of oil and rubber during the war, actually mandated ridesharing; it introduced legislation around this. There was a famous poster during World War II that said, ‘When you ride alone, you ride with Hitler!’. They mandated the establishment of car clubs. They also established a ridesharing program called the Car Sharing Club Exchange and Self-dispatching System. This was an early example of an internet noticeboard, and it matched passengers to rides by bulletin boards in workplaces, churches and schools.
The next round of car sharing that was very encouraged by the government was in the late 1970s, and I was living in the United States at that time when there was the oil crisis of the late 1970s. I was a kid then. They did not mandate ridesharing but they certainly strongly encouraged ridesharing, and in fact at that time over 20 per cent — nearly 25 per cent — of US workers carpooled or rideshared to work, so it was a significant number.
I return to the bill. This Commercial Passenger Vehicle Industry Bill is very different from the light touch of my ridesharing bill that tried to recognise the new technologies and recognise the platform that was emerging within legislation so we would protect the drivers, the passengers and the people starting to work in that new form of commercial passenger vehicle industry. But this bill brings with it, as we have heard from many of the other speakers, some very upset taxi licence holders. I think ‘upset’ is an understatement. I have been very moved by my meetings with the taxi families, the taxi licence holders. I understand this extraordinary pain, and I am absolutely devastated by some of the emails that we have received from them about the pain that they are suffering, the hardship that they are feeling and the mental anguish that this is causing many of them.
This bill also requires a compensation package and, because of that, a levy. It is the first of two bills that will reform the commercial passenger vehicle industry. Taxi licences as we know them will be abolished. The bill establishes a passenger vehicle service levy to provide the compensation to the existing industry affected by these changes. The commissioner of state revenue is responsible for the collection of the levy, which will be payable quarterly by providers.
The bill changes and broadens the definition of what we have called a booking service. When the legislation was first written in 1983 we did not have mobile phones and we certainly did not have the internet, so this is an overdue recognition of changes in technology, but as a result of this measure taxi and hire car licence fees will be abolished and their licences will be abolished. The net effect will be the creation of a fully open and competitive commercial passenger vehicle industry.
I know this is not a word that governments like to hear, but it is brave. I would like to commend the government on that because this really is a 21st century approach to this issue, and the government has really taken the bull by the horns here to recognise the innovation, recognise that this is only the first of many disruptions we will see in our vehicle industry and certainly in the way we as Victorians travel on our roads. We are already seeing the emergence of autonomous vehicles, and what role will they play in the commercial passenger vehicle industry? I think they will in all likelihood play a fairly significant role. So while I do think it is brave, I actually think it is good.
Many of the other states have really played around the edges. They have not taken this very holus-bolus approach to reforming the commercial passenger vehicle industry, but of course that sort of change creates many critics. The existing taxi licence holders have been very vocal, as we know, and I like many, as I mentioned before, have spoken to them and consulted with them widely. Again I reiterate that I have great, heartfelt sympathy for what many of them feel that they are experiencing.
I also speak to thousands of Uber passengers. It used to be that when people asked me what my favourite car was I said, ‘It’s a yellow one with a light on top’. I have always been a fan of commercial passenger vehicles. I have used taxis extensively, and I now use other ridesharing services extensively, both here and when I travel overseas. The convenience of having the apps on my phone has really made using these services very popular, not just with me but with hundreds of thousands of Victorians.
As a result of the very good lobbying work and the very significant information that the taxi licence holders have provided to us, the government has uncapped the Fairness Fund, and I think that is very fair. This is a big shakeup; this is a big disruption to the taxi industry and licence-holders, some of whom are multigenerational licence-holders — we have got people whose grandparents were driving taxis. This is a significant shakeup, and I am pleased that the government has uncapped that Fairness Fund. The funding for the transitional assistance payments has been allocated in the budget, and if this legislation passes before the end of June, those transitional assistance payments will be made as a single lump sum to eligible licence-holders when their licences are revoked, and I think that is very positive.
But I take issue with the levy as proposed. I do not have much of a problem with the government using the levy to recoup the cost of some of the assistance that we are providing to the licence-holders, but I think a $2 levy is too much. I made three Uber trips on the weekend, and they were all under $8. A $2 levy on that is a 25 per cent levy, and that is significant.
Mr Ramsay interjected.
Ms PATTEN — You try and walk in my heels, Mr Ramsay.
The levy will affect short fares and it will apply downward pressure on the market, so I am proposing a starting point for the levy of $1. Importantly the numbers show that the costs of compensation can easily be met at this rate, and I would like to step through that analysis. I wish I had PowerPoint or some sort of holographic system to show how this works, but maybe not in this term of Parliament; hopefully we will see things like that in the next — we are an innovative state.
On 22 February this year the Premier announced the total cost of the government’s assistance package at about $494 million. This figure includes a $50 million Fairness Fund boost and $25 million for continued access for people with disabilities, both of which are already provided for in the budget outside of the levy. It was always understood that those payments were not to be recouped by the levy. However, the levy probably will, in the long run, recoup those. Whether the levy can recoup the necessary funds hinges on two key factors: the number of trips we make in Victoria and provider compliance, and we have heard a lot about the fact that the industry will not comply.
We know from the Victorian Taxi Association that there are about 40 million taxi rides per year. Even if we were ultraconservative in estimating the ridesharing trips at 10 million, that is 50 million rides per year in Victoria already. We know that 10 million ridesharing trips is very conservative; the actual number is far higher.
But putting that reality aside, if we take this conservative combined figure of 50 million trips per year, applying a $1 levy gives $500 million over 10 years — and that is not accounting for any growth in the industry. I personally estimate that there are between 70 million and 80 million trips a year now. But working on a figure of 50 million, this looks at $500 million being recouped in 10 years.
Comparing the government’s figures to the ones that I have just mentioned, it is plain that 28.8 million total trips per year is an incredible underestimate. It is 25 per cent less than the Victorian Taxi Association’s report, let alone the combined total including the Uber trips or other ridesharing services. The government also estimates that out of the money they raise about 23.7 per cent will be spent on compliance. I actually think that is incredibly significant.
I do not think our ridesharing services will commit tax fraud to that degree. I do not think we will see a quarter of them not paying their taxes. If the levy is set at $1, I think we can ensure far greater compliance. From my conversations with Uber passengers, while they would like to see no levy, they are quite understanding of a $1 levy, so I believe a $1 point is absolutely sufficient to recoup the costs of the transitional assistance package. At that lower rate we will see very high compliance and we will see support from our community.
Acting President, at this point I ask that my proposed amendments be circulated.
Australian Sex Party amendments circulated by Ms PATTEN (Northern Metropolitan) pursuant to standing orders.
Ms PATTEN — This is a new and emerging technology and a new and emerging industry. While I think I can make some very good assessments of the number of rides we are going to see and the amount of compensation the levy will bring to the government, I am a practical person. I am aware that sometimes you do not know what is going to happen. You do not know what other disruptions may affect this commercial passenger vehicle industry and how it may be affected. My amendments build in some flexibility for the government to adjust the levy if need be, but only if it is recommended by an entirely independent Essential Services Commission. This is a decent and fair proposal. It will be popular with the community, but it also provides this government and future governments with some assurance that the levy will meet their requirements. I really hope that this house will agree to it.
I appreciate there is significant disagreement in the house around this bill, but I think the bill, with a $1 levy that is audited and assessed by an independent body, actually creates a very fair and practical system that ensures that those who have been affected by the disruption to the industry, those who have been affected by the changes to our commercial passenger vehicle industry and those who may be affected in the future by what changes will happen will be looked after and will be compensated. So I think my amendments make this bill a fairer bill while still keeping it a practical bill that recognises that this government will be paying out in excess of $500 million in compensation to the families and the licence-holders. I commend my amendments, and I look forward to hearing the rest of the contributions.