Bills

Passenger Transport (Miscellaneous) Amendment Bill

Second Reading

Debate resumed.

The Hon. S.C. MULLIGHAN (Lee—Minister for Transport and Infrastructure, Minister for Housing and Urban Development) (17:18): I thank the member for Unley and the member for Colton for their contributions on the bill. I am glad to have the support of the house on this important bill. We have been through a very busy 18 months in the passenger transport industry. We have had the emergence in Australia and, of course, in South Australia, of new technologies like ride-sharing applications on smart phones, which have created a new type of competition in the passenger transport industry.

In South Australia, we have had a taxi industry in the configuration as we know it now. I believe its roots can be traced back to the 1950s, somewhat a little prior to my time. In fact, it is probably somewhat a little prior to the time of most of us in here. More recently, but still a good 20 or 30 years ago, we saw the emergence of the chauffeur vehicle industry or what we would now consider the blue-plate operators here in South Australia. So the emergence of a new type of competition I think could be euphemistically described as causing a few ripples in the pond. It has been a challenge for us to work out how to make sure that the growing number of South Australians who want to take advantage of these new types of services can do so, and can do so safely.

The existing regulatory models were quickly shown to be outdated and inapplicable to these types of services. Certainly, the most obvious example of these ride-sharing services is the international company called Uber, which announced its intentions to operate Australia-wide, particularly throughout the course of 2015, and emerged here in South Australia during the course of that year, and such was their business practice, at least at the time, in deliberate defiance of local laws and custom when it came to operating across Australian jurisdictions.

Despite my entreaties and the entreaties of other jurisdictional transport ministers to the national transport minister at the time—not the current federal transport minister, but the previous federal transport minister—urging a consistent approach across all jurisdictions so that all Australian states and territories were applying the same types of laws with the same types of principles to these ride-sharing companies, and in particular Uber, perhaps more of a reflection of his interests in the transport portfolio, that federal transport minister declined that opportunity and the states were left to go it alone.

What we saw over the course of the last months of 2015 and the early months of 2016 was a game of playing different jurisdictions off against one another with what the appropriate rules and regulations should be. It was a challenging time for the existing industry. We had some proponents of these new transport service providers, particularly the Greens and also the opposition, who were urging the government in this state to welcome these new operators in without regulation, without the same types of requirements that we have always imposed on the existing operators (the taxi and the chauffeur vehicle operators) without the driver checks and without the vehicle checks.

I have made it clear and consistent that the first principle that we should have when regulating these transport services is one of safety. Passengers have the right, when they are procuring one of these services, to demand that the driver who will be providing the service is safe and reputable and appropriately providing that service, as is the vehicle, and that was not the approach that was taken by those political parties I just mentioned. They did not believe that that level of regulation was required and that it would be an unfair inhibitor on these new entrants into the market.

I also said at the time that we had to think of who comprised the existing industry. There are thousands of families who are invested in either the taxi industry or the chauffeur vehicle industry in South Australia, thousands of people who have either purchased the right to operate taxis through taxi plates or who pay to the government an annual lease payment for the right to operate a blue plate. Then of course there are all the costs on top of that: the costs of purchasing and operating a vehicle to the appropriate standards. It is a significant investment.

Even while we had a period of time, particularly from the very late 1990s through the 2000s when the value of these taxi plates escalated very substantially as more and more people took taxi services, the people who owned those taxi plates quite often used the market value of those taxi plates as equity, either to run their own business, to purchase vehicles, or to make other financial contributions towards their taxi businesses or, indeed, to secure other types of assets—even real estate, even the family home, for example.

They were incredibly important assets, so you can imagine the concern that these taxi plate owners had not just at the emergence of these new competitors and these new service providers and what that meant for the viability of their own businesses but also for what it meant for their own liquidity and their family's financial position. That is why the approach from the government was a careful and considered one. It was not the approach of those opposite, which was to just welcome in Uber without regulation and without regard to the impact on those thousands of families who have been operating taxis and chauffeur vehicles in South Australia.

Our approach was to have a very thorough review about the sort of regulation that we should apply to these new operators, if indeed they were to be made legal here in South Australia at all. That is just what we did. We made sure that all the drivers had to have not only a national police clearance but a working with children check. I do not think any of us need to reflect on the community standards and expectations that we should be imposing on those people who provide these services now with regard to that working with children clearance.

We also wanted to make sure that the vehicles were appropriately inspected and judged to be roadworthy so that they could be operated on South Australian roads and, in a measure that the member for Unley touched on, that they were appropriately insured as well. In this regard, the member for Unley is absolutely right: the taxi industry has been subject to very high compulsory third-party premiums for many years to reflect the fact that, perhaps unlike the vehicles that we would all operate personally, which might be on the road for up to an hour or a couple of hours a day, taxis often operate in excess of 18 hours a day, and they commensurately have a much higher risk of accidents and injury out on the roads.

The risk-based analysis, the actuarial analysis that is done to determine their premiums, was not something that was established under this government. In fact, it was established quite some time ago under a regime administered by the former treasurer, a member of the other place, the Hon. Rob Lucas. We have continued on that actuarial analysis-based premium setting regime here in government.

The member for Unley is right: will that change in the future? We would hope that in market competition, with at least three private companies providing insurance into the market, competition may indeed drive that down. However, I think the inference from the member for Unley's comments that this is some kind of revenue raising scheme for the benefit of the Consolidated Account needs to be firmly refuted. Members should be reminded that this is the same measure that the opposition Treasury spokesperson, the Hon. Rob Lucas, presided over.

I return to the impact on local industry. We differed from the opposition in its saying that Uber should be welcomed in without regulation. In contrast, we said that they should be regulated and that they should be subject to higher standards. We also recognised, as we should, the likely impact that Uber's presence, even operating legally within the new regulatory environment in South Australia, was likely to have on the South Australian industry.

We offered, and indeed continue to pay out, an industry assistance package to members of the existing South Australian passenger transport industry. We think that this is incredibly important. It is a measure largely consistent with the measures taken in other states, although at the time of its announcement South Australia's was by far the most generous industry assistance package.

You may recall, Deputy Speaker, that when the member for Unley and the Leader of the Opposition were asked if they thought any industry assistance or compensation was necessary for the existing industry, the response from the member for Unley was, no, they did not believe it was necessary. Their position for the passenger transport industry was, 'Let Uber and ride share in without any regulation, and don't assist the existing industry on the way through in the face of new competition.' I am very glad to say we have refuted that.

After a period of watching some of these ride-share operators in practice, Uber's promise of 5,000 new jobs, of a massive impact on the unemployment rate and of a new land of milk and honey that would be delivered here in South Australia by the mere fact of their presence has not quite materialised. In fact, I still think we are short of about 1,000 registered drivers under Uber, so we are perhaps running at only 20 per cent of the promise that was made, and not just by them, I should say, but also by the Leader of the Opposition. He promised 5,000 jobs from his policy of letting them in to South Australia.

However, I am pleased to say that certainly the operations of Uber and their approach to the South Australian government and the community has improved dramatically, particularly over the last 12 months, to the point where we have offered them accreditation and we have re-offered them accreditation at the expiration of their first accreditation period. We have got to the point now where we believe that the vast majority of their drivers are appropriately accredited and they are taking steps or have taken steps to make sure that their vehicles are compliant, have been inspected and are roadworthy, and that is a welcome improvement.

Unfortunately, we are seeing some participants in the industry who are not doing the right thing. This is not a comment targeted at a particular type of service or operator; unfortunately, this is a pox on all types of operators, a small number of whom are choosing to flout the law. They are either providing services as drivers while they are unaccredited, they are providing services in vehicles that are not roadworthy or they may even be transport booking services which have not been appropriately accredited or which may not be meeting the terms of their accreditation. These are very serious matters, not because we would like to see our regulatory environment that we have established for these new services kept up with, although we believe it is always important to uphold the law, but because it presents a serious safety risk.

Unfortunately, across all forms of personal passenger transport—perhaps if I could describe it euphemistically—there is a very regrettable number of incidents that occur each year. It may be in a taxi, it may be chauffeured vehicle or it may be in a ride-share service vehicle that illegal activities take place. They may be assaults, thefts or some other criminal activity. It is both absolutely necessary and important to make sure that the drivers are accredited, that the vehicles are accredited and that the booking services are accredited and are meeting the terms of their accreditation.

This enables the government, perhaps most usually through South Australia Police, to make sure that we can track down those services and those people involved in the conduct of those services—not just the service provider and the driver but also the passenger, the recipient of those services—and follow through the circumstances of that incident, lay charges and punish those people as appropriate. It is a critically important safety measure.

Most of us here in this chamber have children. Some of us have children much older than mine, and some of them would even be procuring some of these services. It may be after a late night. It may even be, for those children—

Mr Pisoni interjecting:

The Hon. S.C. MULLIGHAN: Indeed. The member for Unley makes a very salient point that the unfortunate yet important duty of parents to provide taxi services to their children in the wee hours of the morning is sometimes called upon. Fortunately for us, like other parents, we do not need to be accredited to provide those services because that would be perhaps one straw that might break the camel's back in that type of service provision. Nonetheless, we want to make sure that those people, whether they are children or other people within our community, are kept safe and that is why these standards are very important and why I commend these penalties to the house.

I might attempt to respond to the member for Unley's query in my remarks here. If I do an insufficient job of addressing his concerns, I am more than happy to move into committee. The member for Unley raised the issue of the collection of the government's $1 levy on the industry. You may recall that the purpose of the $1 levy is to fund that industry assistance package and to reduce fees and charges for those people participating in the industry, as well as provide some improved and additional services to disabled passengers, particularly the lifting fee, and other benefits to the industry.

It has been a matter of consternation for the industry about how this $1 levy is to be collected. I think the member for Unley touched on an important point there. There were various models, to be fair, that I think the member for Unley was heading towards in his comments about how that $1 levy should be collected. We took the view that it would be simplest for the industry and simplest for government to have what we now call the transport booking service, previously known in the taxi industry as centralised booking services, collect that $1 levy.

That would mean that we are imposing a burden on three bodies or organisations, rather than the hundreds of people who might be leasing a taxi plate, or rather than the more than 1,000 taxi plates that are owned, or indeed the more than 4,000 people who are taxidrivers. Unsurprisingly, in the first instance, there was some resistance from the transport booking service at being faced with this task, despite assurances from government that if it required an amendment to their processes or systems that we would be willing to assist them financially with the costs of altering their processes or systems to enable them to do this. It is a far better way of capturing this $1 levy than requiring it of the drivers.

It would be incredibly burdensome, and additionally burdensome for a group of people who are amongst the lowest paid workers in our community, to expect them to collect and pay to the government this $1 levy. Of course, it would be more convenient for the transport booking service and so that is why we have gone down that path. The member for Unley gave an example which, unfortunately, can be an accurate example of what might be described as a 'cashie', where a passenger jumps in a taxi and says, 'Can you run me home for 20 bucks? Don't worry about turning the meter on.'

That has always been illegal under our regulations, and so it should be. If we have one of those unpalatable incidents which I described earlier, if there is some sort of assault or some sort of robbery or any other such incident, if that meter is not turned on there is no record of that service which is provided, unless there happens to be some accidental capture of that service, for example, through some sort of app which might be running on a smart phone or some other system which may, coincidently, be recording the locational coordinates of that service being provided.

Every transport booking service, particularly in the taxi industry, but also elsewhere, as soon as a meter is switched on or as soon as the appropriate device is activated to record that service, tracks that service, and that is important for those safety reasons. It is also really important, perhaps less so for a state government but important in the national context, that that sort of job, the undeclared cash job, is, in my understanding, also illegal from the Australian Taxation Office's point of view because it more than likely represents undeclared income for that taxidriver.

It also creates, back into the more relevant industry context and the state context, a lack of clarity in the relationships between the driver, the leaseholder, the operator of the vehicle, the plate owner and the transport booking service about what work has been done and how the benefits and the costs should be shared amongst the industry That is the rationale behind the $1 levy being collected by the transport booking service.

There has been a disparity of views amongst the transport booking services, the three taxi companies—I do not think there is any denying that—but it is a better outcome for the industry as a whole to have it centralised with the burden falling to three organisations, rather than falling to plate owners, plate operators or leaseholders, let alone the drivers.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 10 passed.

Clause 11.

Mr PISONI: Minister, are you able to advise whether all three of the booking agencies were consulted in this process?

The Hon. S.C. MULLIGHAN: Yes.

Mr PISONI: Were they able to have a copy of the draft bill in order to be properly consulted?

The Hon. S.C. MULLIGHAN: I am advised that, while all three may not have seen the full draft bill, there was at least a session in person where they were briefed on the contents of the bill and the operation of this particular clause. I am advised that it was made very plain to them how this mechanism was to operate within the industry where they would be collecting the levy.

Mr PISONI: I accept what the minister was saying in his second reading speech in attempting to clarify this section of the bill, but can he clarify if there is a liability for the booking agency for fares collected in a 'cashie', that term he uses, if, either after a tax department investigation or some other form of investigation, it can be identified that a particular driver or cab operator had racked up thousands of dollars in cash trips? Who would be liable for paying the $1 levy?

The Hon. S.C. MULLIGHAN: I am advised that it would be unlikely for that liability to be imposed on the transport booking service for the $1 levy for those particular types of trips for the following reasons. One is undeclared income by an individual who may happen to be a taxidriver. It would be extremely difficult, if not impossible, to have an understanding of whether that undeclared income came from providing taxi services as a driver. If it could be determined on a reasonable or proven basis, it would then be extremely difficult, if not impossible, to understand how many trips gave rise to, for example, X hundred or X thousand dollars of undeclared income that the tax office was taking exception to for that individual.

It is further complicated in another light. There is a recognition by the department and by the industry that, unfortunately, from time to time some passengers do runners. There may be some trips that are not appropriately accounted for, perhaps if I can use the phrase, through the chain of reporting that the meter and log keeping back up through the transport booking service usually records.

The last comment I make is that we have also indicated, particularly in the early months of operation of this levy, that there is going to be a period of adjustment and coming up to speed for drivers becoming familiar with their requirements and the transport booking service becoming more competent in ensuring that they are capturing the dollar levy liability from the driver and the operator through the chain back up to them. Does that provide sufficient clarity?

Mr PISONI: I do agree with the minister that it would take an enormous resource to try to estimate the value of taxi rides that were delivered in this manner. However, things do happen. If it became more widespread, it may very well be that the department might put resources in to deal with an issue like that, for example. Is it the intention of the bill that the liability for those identified cash transactions would not fall with the booking agency? Is that the intention of the bill?

The Hon. S.C. MULLIGHAN: Generally speaking, if the services are paid for and recorded on the meter, then they are liable for that trip. If they are not recorded on the meter, then we have almost zero visibility—perhaps zero visibility—of that trip and hence cannot raise a liability for that trip.

One of the other reasons why we were attracted to the model of the transport booking service capturing the data and collecting the levy and paying it to government is that they have a pretty sophisticated and nuanced understanding of what is happening out on the road. As I mentioned before in my earlier comments, it is a requirement that at the commencement of a job the meter is switched on. That is recorded back at base, and they understand that.

My understanding, though, is also that the transport booking service can also see where the cabs are. If they are moving around and the meter is not on and that is happening throughout the course of the night, they will want to know what is going on because they are missing out not on the dollar levy but on fees and revenue from the conduct of that taxi. So they almost assume a quasi enforcement role within the industry themselves because they are trying to make sure that the cab driver and that taxi vehicle itself is doing the right thing by turning the meter on for each job. If that is not happening, they are not getting paid.

There is also the practice of the relationship between the driver and the operator of the taxi. Not always but that tends to be, for example, a person who leases a plate and purchases a vehicle and then enters into an arrangement with a driver to drive the taxi plate or to drive the car that that operator has provided. That is most commonly—not exclusively but most commonly—done on a revenue-share basis.They will be very closely scrutinising the amount of work that has been done in that taxi.

The more work that gets done the more the driver gets paid, but also the more revenue the operator shares in. It is the operator who has an additional relationship with the transport booking service, because they have to pay base fees; that is, they have to pay to get jobs sent to their car, for example. So both the transport booking service and the operator have, I guess, what I describe as a quasi enforcement role in making sure that the meter is turned on and that revenue gets recorded, because those two are at risk of being out of pocket if cash job after cash job after cash job gets done by a particular driver or a particular vehicle on an ongoing basis.

I think the short answer to your question is that we cannot accurately determine how many cash jobs are being done. It is a relatively safe assumption that it is in the very, very small minority of jobs that are done, because it is a great risk to the driver that they will be found out by the operator and/or the transport booking service if a car is racking up kilometres and being seen to be whizzing around the metropolitan area but no revenue seems to be coming in.

Clause passed.

Remaining clauses (12 to 20) passed.

Schedules (1 and 2) and title passed.

Bill reported without amendment.

Third Reading

The Hon. S.C. MULLIGHAN (Lee—Minister for Transport and Infrastructure, Minister for Housing and Urban Development) (17:51): I move:

That this bill be now read a third time.

Bill read a third time and passed.