The Australian Taxi Drivers Association
Representing Australian Taxi Drivers and their Regional Associations.
TWU and Taxi Drivers
Victorian Driver Agreement
Queensland Driver Agreement
Towards a Taxi Driver Agreement
An underlying principal of any commercial undertaking is that it is viable and sustainable. Generally it follows that, when staff are employed, their wages and entitlements can be paid, and are paid. It is generally a duty of corporate management not to trade whilst insolvent. Superannuation is an employer expense, and there is a fiduciary duty to provide for, and retain both Superannuation and Income Tax.
Public Passenger Transport industries such as buses, trains and ferries have an almost universal problem of being unable to fund the totality of their liabilities, costs and expenses, from passenger fares without Government subsidy. Around Australia, such public transport is subsidized, and the Corporations involved are able to pay their workers Award Rates with Entitlements, and Superannuation. They remain solvent.
Fares are thereby able to be restrained to acceptable and affordable community standards, by the supplement of subsidies, and are generally regulated by independent pricing tribunals, acting within Governmental guidelines. Market forces also set econometrically measurable price elasticities.
Taxi fares are similarly so restrained and regulated. But, for the taxi industry, which is not the subject of direct subsidy, and which is actually paying very considerable license fees to Government, or to private investors, the shortfall must be met another way. That way is to purport to classify the industry’s workers – taxi drivers -- as non-employed subcontractors such that their $10 to $13 an hour average earnings are the basis of the taxi operators costs, and that the $25 an hour liability arising from a properly classified employee structure does not exist.
The Fels Report into the Victorian Taxi Industry, and IPART surveys in NSW, clearly note the low earnings of taxi drivers, and the former comments upon the long term exploitation of bailee drivers by the bailor operators. It recommends a new Driver Agreement with a split of 55 / 45 % of the nett fares. The supporting tables do not however bring taxi driver earnings up to anywhere near minimum wages, let alone minimum wages with entitlements or Superannuation. The industry, so the Report appears to claim, cannot afford to pay wages to taxi drivers !!!
In the context of an Operator being able to now pay the Government $22,000 a year in plate fees, and acknowledging current payments of up to $35,00 to private investors ( GST included), he is adjudged unable to “pay” more than a total of $15 an hour to his driver. Worse, it would appear, is that the Driver Agreement will endorse and enshrine that as an acceptable contract.
It is a sham and unconscionable contract. The ATDA will oppose any agreement which has the legal effect of a contract of employment, but which fails to observe the relationship of employer and employee, and is not based on at the least the payment of minimum wage, entitlements and Superannuation.
The problem may well then be that the taxi industry ceases to be viable or sustainable, and will, self evidently, be insolvent. The solution is not to increase fares – that won’t work. Nor is it for Government to subsidize taxi operators’ driver “wages” – that would cost about $50,000 a taxi. Part of the solution is to decrease costs and the principal items are plate lease fees, insurances and network / depot fees – the Fels Report addresses some of these aspects.
The single best solution is an increase in productivity, patronage and gross revenue per cab. That flows primarily from customer satisfaction with taxi quality and service. “Customers First “
The solution is also for a Driver Agreement to resolve and affirm that status of the bailee driver as being an employed bailee driver, such that 50% of net fares, plus entitlements,( another 15%) and a safety net ( part of the Draft Fels Report) related to the national Minimum Wage underpins his hourly earnings. As any other Australian worker he should earn at least the minimum wage.
In just the same way as a shopkeeper, or a Department Store, or the Fish Markets, do not remain open, or roster its staff to be on duty when there are likely to be no customers, but does remain open for business when consumer demand is present – late night shopping or pre-Christmas- then so will a taxi operator employer roster on his employed staff to meet demand. That is the operation of a free market economy. It is also his risk, and his profit to make the right call. He cannot do what the taxi industry now does: he must pay his rostered staff, and at penalty rates on some occasions.
He cannot send out the drivers, at their own risk and cost, to trawl the streets for passengers : that’s a taxi industry scam, in which the cabbie gets less than half community standard “wages”. That is not an acceptable practice any longer. It is not even a ‘joint venture’.
The ATDA recognizes that, without major structural and participatory change, our taxi industry is simply not viable. We demand that the industry workers be paid a fair, community standard, wage and entitlements, as a starting point.
We understand that current costs and revenues cannot sustain fair driver wages. Reducing the major cost items would provide for such a fair wage and entitlements over time.
Without, however, an increase in productivity – simply expressed as jobs per taxi per shift, or in the new terminology, as paid passenger kilometers,- there is no certainty of restoring passenger confidence and satisfaction in the context of providing reasonable driver earnings.
The issue we take up, in Victoria and around Australia, is that the key, concomitant, activity is for increased productivity. Taxis travel half the distance vacant, and two thirds of the time empty. Up to a third of registered cabs are not on the road. To some extent that is a world wide phenomenon - but it can be changed with modern technology and information. There is no absolute reason to come back from a trip vacant, every time. Fourteen shifts are not possible, ten shifts is uneconomic.
Sometimes, yes. Everytime , no.
There are a number of technological improvements – “apps” – already on the market which better link intending passenger with vacant or available driver. They need to be centrally connected to a recording facility. The excessive credit card surcharges need be controlled and reduced. Essentially, the security of drivers and passengers needs be enhanced. Much of the latent supply excess of registered cabs not on the road comes from low perceived potential earnings; much comes from the fear and danger of late night taxi work.
The greatest impact on taxi revenue and thereby on driver earnings will come from increased productivity delivered as extra passenger trips per shift and measured by time and distance hired ratios and proportion of cabs on the road. Improved customer service in waiting times is the result and customer satisfaction with driver services flows as an outcome.
The ATDA has, in recognition of this reality, developed a technological model for the taxi industry. Lifting Customer Services will also radically change the delivery of Taxi Services, and increase the potential earnings of taxi drivers. As a starting point there needs be industry wide recognition of bailee drivers as employees of the operator, and deserving of a minimum wage, conditions and entitlements.
We have prepared a balanced new Driver Agreement having the effect of an Industrial Award and Contract Determination applicable to taxi bailors and bailees around Australia, as employer and employee. That document forms the basis of the bailment process.
We have also developed an internet application which comprehensively delivers a taxi job offer and payment system to all passengers and drivers, as well as an operator’s system of rostering, payment and taxi management. All these are independent of networks, depots or taxi services providors.
They connect driver to passenger, and affirm the employment relationship of driver and operator. To a very large extent they also cut out the Networks and give the Regulator tools to measure and monitor performance.
In planning, and ready to produce a working prototype, is a totally new security system able to view, record and transmit every event that occurs within and without the taxi. Every function is recorded and able to be easily extracted such that the safety of passenger and driver is enhanced to an ideal point. A new taxi roof light bar incorporating 360 degree external cameras, and Destination / Messaging functions is an integral part of the system. Internal in-car display on demand images from internal cameras act as a deterrent to abuse from all parties, and on –line steaming of audio / video alarms is provided.
This system is linked to a central recording facility such that full extraction of data, information and alarms is on-line and fully available. Despatch of WATS work is incorporated as base platform.
Our propriety and recommended “TAXIS” job offer and payment system is fully integrated, as is the reporting function. There are no impediments to the use of other booking or payment systems, but that data is not directly accessible.
The ATDA is taking a holistic and comprehensive approach to the desperately needed reforms to the Taxi Industry. There is deep seated and entrenched opposition to the reform package proposed in Victoria. Around Australia major changes are viewed with fear and loathing – and all around Australia, the average taxi driver earns less than the Minimum Wage, and has none of the rights or entitlements of employment. It may not be considered practicable to effect all the reforms at once, but nor will it work to stagger their introduction.
One matter is however certain : A Driver Agreement which affirms the bailee driver as the employee of the licensed operator, and places a safety net hourly rate below the 50/50 split of net fare revenue, and which permits an agreed maximum set pay-in reflecting that split, in addition to ensuring the rights, entitlements and workplace safety of the taxi driver worker, is an essential prerequisite to Industry reform.
Once a fair contract is in place, all else will follow, including passenger customer satisfaction with Taxi Services.
Michael Jools, President ATDA, August 2013