Passenger Transport (Point to Point Transport Services) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 5 February 2025.)

The Hon. D.G. PISONI (Unley) (12:28): I advise the house that I am the lead speaker for the opposition on this bill. The Passenger Transport (Point to Point Transport Services) Amendment Bill comes to this place almost exactly 10 years from when we first started seeing Uber popping up around the world, and things have changed enormously. I remember there were even riots. I remember seeing on the news riots in France, with taxidrivers ripping off the doors of Uber vehicles. I can remember the commentary interstate and in South Australia about how it would damage the industry.

What we did see was a change in the way in which people could get from point A to point B. We saw efficiencies in a traditional service that was heavily regulated, and we saw many of the things that were being offered in the new ridesharing schemes that were popping up at the time being adopted by the taxi industry.

This bill, of course, proposes significant changes to the taxi industry and the licensing system. I think since the first model T Ford rolled off the production line countries around the world have adopted a perpetual licence system, although not all of them. There were some that started with a different system, but predominantly you buy a licence, and they are limited. Governments release them.

I can remember often reading the Gazette—something I did regularly when I was first in this place—about a new release or tender for licence plates being released by the Department of Transport. The idea there, of course, is that they were controlled to keep the licence plate as an asset, a business investment, a bit like buying an apartment that you might rent out or a building you might rent out, either a commercial building or a residential building. We know that many of those taxi licence holders would also lease their plates, and so you would have people who would lease the plate and either buy their own taxi for that leased plate or lease the plate and the taxi itself.

There were all sorts of business opportunities at different levels of entry point for people who wanted to work in that industry. What ridesharing did close on 10 years ago was open that opportunity up for so many more people to offer a different type of service, and for consumers to have choice in service. We saw a transformation of point-to-point servicing.

In 2016 or 2017, I learnt a little bit about how the rating system for passengers and for drivers can certainly be dictated by the local culture. The first time I used Uber was when I was in the United States. When I returned, I looked up my rating, and I was not rated very well. I was thinking, I was well behaved, I do not know what has happened there, and then I did a bit of research and I found that if you do not tip, you get a poor rating.

Of course, I had no idea that you had to tip the Uber driver. Coming from Australia, it is not something that we are familiar with and, consequently, it cost you, and it might cost you being picked up if you do not have a very good rating or a high rating. It does suggest that maybe you do not tip. When things are busy in places like America, you may be left standing on the side of the road because people do not want to pick someone up who does not tip, so that was a lesson learnt. I did not have to wait for an Uber, but I think that was before my rating became known to other Uber drivers in the United States. Fortunately, here we do not have that tipping culture, and so consequently it is not usually an issue.

This bill proposes significant reforms to the South Australian point-to-point transport industry, impacting taxis, rideshare, and chauffeured services. The government claims the bill is necessary to modernise the industry and implement elements of the taxi industry support package from the 2024-25 state budget. There are significant concerns in the industry regarding the bill's removal of independent oversight, and the significant increase of ministerial authority.

The bill also proposes to open up all of South Australia to rideshare operators. This is long overdue, and I congratulate the member for Schubert on her advocacy in this area. Living in the Barossa Valley, we all know it is world famous for its wineries and its wine tours, but without ridesharing it severely restricts the ability for people to travel for a day, unless they hire a bus or a chauffeur in a chauffeured vehicle. They would have to find something else to do or find someone who is prepared to drive for the wine tasting and not drink, of course.

So this will be great for the wine districts in South Australia and for other restaurant destinations in regional towns where the food is renowned for its quality, its uniqueness and the atmosphere. It is all about experiences, and bringing rideshare out to the regions will expand that experience. However, we know that will take some time. This is not a switch process. Yes, it pushes the go button, but there will be people who will need to come forward to offer those ridesharing facilities in the regions, and that will take some time.

The bill abolishes the Passenger Transport Standards Committee, which previously provided independent oversight and industry consultation on regulatory matters. I know that this has caused some angst and concern within the industry because it puts all of the power and decision-making process with the minister. There is no requirement for consultation and there is no independent review, so it is obviously subject to a political agenda that any current or future minister may have in that sector. That is something that I understand the industry has been concerned about.

The minister will have unilateral power to impose new conditions on transport operators, to approve or revoke licences and to make regulatory changes without prior consultation. We know that consultation is an important factor, particularly when you are dealing with small businesses. Remember, these are all small business operators: taxi owners, taxi operators, taxidrivers, Uber drivers, drivers of other point-to-point or ridesharing providers.

These are all small business people. They work by providing a service. They are not hourly paid. They do not accrue superannuation, long service leave and annual leave. They do not get penalty rates on weekends, and I will touch on that a little bit later because there is something unique to the changes here in South Australia that seems to be at odds with the entire philosophy of the Malinauskas Labor government.

The government argues that SACAT will provide a mechanism for review, but industry leaders have raised concerns that SACAT is already overloaded, meaning accreditation appeals will be costly and delayed. I think that is a legitimate concern. As you give bodies like SACAT more work and more scope, they need to have the resources to be able to do that. Justice delayed is justice denied. When you are running a business and if you have a house, supporting the finances that you have arranged to run that business, you want any dispute or any issue that you feel is unfair dealt with in a timely manner.

The Taxi Council has warned that the minister will now act as a judge, jury and executioner over transport industry decisions, creating significant uncertainty for operators. That may sound alarmist, but that is the view that many people who are running businesses have. Something that could end your business or severely disrupt your business, you would see that as an execution, and I certainly sympathise with that view.

The bill removes the existing metropolitan boundary for rideshare services, allowing rideshare companies like Uber and DiDi to operate statewide, including in regional areas. Regional councils generally support the change, arguing that it will increase transport options in communities that struggle with taxi availability. However, taxi operators have warned that an influx of new competitors in already now low-demand areas could destabilise services, leading to inconsistent availability and driver shortages in off-peak periods. That may very well happen, but we saw that concern also raised with the introduction of Uber in the metropolitan area about a decade ago. Yes, there were changes to the way the taxi industry operated, but we certainly did not see devastation for consumers or for operators. There was significant change—I understand that—and there was some pain, but it certainly was not the end.

Uber Australia has indicated that, while it supports the change, it will take time to onboard enough drivers in regional areas. That in itself does give those established taxi operators time to change their model and prepare for some additional competition. However, I will say that the research that I have seen about the introduction of rideshare is that we actually saw more people using point-to-point transport services. We did not actually see a shrinkage of services being delivered by taxis. People who were not using taxis started using rideshare. It is like introducing a vegan menu to your barbecue inn. You were not getting those vegans coming to your restaurant before then, but when you introduced that menu they did not come in and buy vegan meals instead of their steak meals. I think it is a similar sort of analogy—it is a bit crude, but I think it is a similar analogy.

Surge pricing will be banned in certain circumstances. In those circumstances, it will be interesting to understand what they are and why they are. We have a government that has introduced new public holidays to increase penalty rates for staff. Now, at a time when there is a demand, when there are public holidays for some reason, there is government intervention here that will prevent those Uber drivers from getting a surge price to cover the fact that they are working on a public holiday.

There are inconsistencies there. I am not aware of that happening elsewhere. It sounds to me to be something that might be based on populist ideology or populist theory, that the public will not like surge pricing and we can punish these Uber drivers because they are not members of the shoppies union or anything like that, so it does not matter that they are not getting penalty rates or getting more for working on a public holiday, which we demand that shop workers get, for example. I would be very keen to understand what those circumstances are and why we have that condition.

Without the ability to use surge pricing, rideshare drivers may be less willing to work during these periods. That is the exact argument that we hear from the government when it comes to penalty rates being introduced on New Year's Eve and Christmas Eve, for example. One Christmas Day every six years, when it is here on a Sunday, is declared a public holiday for penalty rates, because how are you going to get people to work if you are not paying higher wages on those particular days? I agree with that. Usually the market sorts it out, and that is what this system is: it is a market system. It is not a regulated system like the award system or the industrial system; the market makes it work. If people do not want to pay that price, they will walk, they use public transport or they will not go out, so it is difficult to understand why it is needed. It will reduce the availability during those busy times: weekend nights, special events and public holidays, for example.

The bill also prohibits queue-jumping fees, meaning customers cannot pay extra for priority service. This is a restriction that removes flexibility for passengers willing to pay more for faster rides—again, an interference with the marketplace. With that view, you might as well say, 'No-one is allowed to have private health insurance because you don't have to wait for surgery in most instances when you have private health insurance.' Where does it end? It is bizarre that ridesharing has been pulled out where people cannot pay for a faster service.

Even when you go to Disneyland you can buy a fast pass and skip the queues. Everywhere in the world there is a market mechanism for helping to manage things that are in limited supply, whether that is waiting or whether that is paying a fee. Often, particularly in the health service, it is a mix of both: a list or waiting time, or you pay a fee in order to avoid that. That has been accepted even for something as essential as health, but for some bizarre reason it is not being accepted for getting from point A to point B. Imagine if the Shinkansen fast train in Japan was not allowed to charge more than the slow train; I think that is how bizarre it is.

Industry experts warn that overly rigid fare controls could make taxi and rideshare services financially unsustainable. I do not know if that is the intention here, for the purpose of the media release by the government: 'We have done this but really we don't want it to work so we'll put some things in there that severely distort the marketplace and severely distort the ability for the market to respond.' We actually think this is the only place in any jurisdiction with such restrictions. We are not aware of them elsewhere. I would certainly be happy to be advised otherwise, but that is the information that we have to hand at the moment.

Small taxi businesses, particularly in regional areas, have raised concerns that additional compliance costs could push operators out of the market. I think this is a thing that was badly managed when rideshare was first introduced. It was an enormous impost for third-party insurance for taxidrivers that was not there for rideshare drivers, and an easy adjustment could have been made for taxis which were then in a competitive environment by what was a regulated fee by the department for such insurance. It could have been a market fee.

If that was the case, we would have seen a dramatic drop in the cost of third-party insurance for taxidrivers at that time. But that was not the case. It was locked in through a deal that was done by the Treasurer at the time, I think. When it privatised the third-party insurance sector in South Australia, it locked in that higher price for taxi users and that was a substantial penalty, if you like, for those who already had taxi licences competing in the new environment.

The bill will allow the minister to impose new vehicle requirements, including cameras and prescribed vehicle markings, without industry consultation, raising privacy, cost and practicality concerns for rideshare drivers using personal devices. Again, I can remember that whenever there has been a requirement on the taxi industry for additional safety requirements, there has always been something chipped in from the department at the time in order to do that—even the compensation payment. It was not a buyback scheme like this one is, but the compensation payment was paid to existing taxi plate holders.

When cameras went in I think there was support from the state government at the time, so it will be interesting to see what will happen in regional South Australia if the minister decides that will be the case, that there will be some new requirements in rideshare vehicles and taxis that are not there at the moment.

The minister has confirmed that doubling the existing point-to-point transport levy from $1 to $2 a trip will directly increase the cost of rideshare and taxi fares. This is in the middle of a cost of living crisis, of course, that we are seeing a 100 per cent increase in that levy. I remember when that $1 fee was first introduced for rideshare it was said it was going to be used to offset the payment the government was giving to existing taxi plate holders, and when that was paid the levy would go. Ten years later the levy is still here, and this legislation is going to see it double.

The minister has earmarked the additional revenue to fund the buyback of perpetual taxi licences, but there are concerns that passengers are being unfairly forced to pay for this industry. Of course, it is always the case that any increase in government charges are paid for by the public; whether it is an increase in bus or tram or train fares or whether it is a taxi surcharge it is the user who pays for it, the operator simply passes it on. It also may reduce the number of customers available for those rideshare providers and taxidrivers.

Many taxidrivers originally paid upwards of $300,000 for perpetual licences, particularly those who bought them in the few years before ridesharing was introduced. I can remember seeing that in almost every budget, I think, there was a release of extra taxi licences out to tender. I know that at times the taxi industry was concerned they were getting ahead of demand and so they were having a devalued effect on the existing taxi licences. I think the market price they paid was lower than ones that were sold a few years earlier or those that were sold in the marketplace.

Under this bill the government will buy back perpetual taxi licences for $200,000 for the first licence and then $10,000 for each subsequent licence—a fraction of what the operators originally paid. Quite possibly you could have situation where somebody who bought a taxi licence in the 1970s or 1980s, or handed it down to children or others, would make quite a windfall. It will not be a market windfall, because the changes to rideshare and so forth have reduced the market rate of taxi licences, yet someone who may have bought one just months prior to the announcement of rideshare here may very well be down $100,000 or $150,000. If they bought more than one, then they are only getting $10,000 for that significant investment.

We are very interested to know where the pricing came from, because we know that whenever there is compulsory acquisition of property the government has an obligation to ensure that people are not disadvantaged, so I would be interested to hear the rationale for the figures quoted in the bill. There is no structured appeal process for licence holders who believe they are undercompensated, leaving many longstanding operators at risk of facing financial hardship, and I gave some examples of that earlier.

The buyback scheme will operate on an eight-year timeframe, meaning some operators will be left in limbo for nearly a decade before receiving their full payments. We know that many of the plate holders are more senior South Australians who may not have eight years to enjoy cashing in the asset they have in the plate, but they may have to wait eight years, so they could be left in limbo for nearly a decade before receiving their full payments.

It is looking to me like a lay-by system. The only difference is the government takes your licence away and then pays you over time rather than paying you over time and then taking your licence away. I think there are some questions about the process there and just how fair that is. The Taxi Council has called for a shorter timeframe, citing the fact that many taxidrivers are elderly.

The minister will have full discretion to set and change the levy via regulation, meaning future levy increases can happen without parliamentary oversight. That is something that is becoming very common with this government. They have such a large majority, particularly in this chamber, that at various opportunities they will use mechanisms such as the guillotine. I think it was 17 times in one day before Christmas that we saw the guillotine being used. It was more times than the whole time I have been in this place, which is now coming up for 19 years. So there is just no guarantee that there will be an oversight process with these changes.

The opposition and industry alike will be interested to know from the minister how he arrived at these buyback figures and the buyback process, and we will be pursuing those questions in the committee.

The bill abolishes the perpetual taxi licence and replaces it with an uncapped annual licensing system. This legislation does not specify how much an annual taxi licence will cost, so you could have a situation where the government has taken away a perpetual licence—this is how I see it, and I would love the minister to explain it—and then a person could have to start paying an annual fee before they have even been fully compensated their $200,000 for the licence that has been removed.

The minister will have full discretion to set the licence fee via regulation, meaning the cost could increase unpredictably, without parliamentary approval. If I know the way this government works we will see initially a very low fee for the annual licence, but then we will see that creeping up over time, usually a long way away from election cycle. So watch out for the first budget after the election if Labor is returned.

The bill also allows the minister to mandate the installation of in-vehicle cameras for taxis and other passenger transport services. The bill does not provide clear privacy protections for camera footage, raising concerns about how recordings will be stored, accessed and used. We know there has been legislation brought into parliaments all around the country about how you use images of people. Will those images be subject to the same laws that are there to protect people from being exposed on social media or protect people from being victims of AI manipulation, for example?

There are no provisions for financial support to assist small operators with the cost of installing or maintaining in-vehicle cameras, and I touched on that earlier. Previously, when safety measures have been introduced into taxis, there has been some support from the state government, but in this instance we are seeing a levy doubled: the existing levy is going up from $1 to $2. So it is the reverse that is happening: the taxidrivers have to provide through their customers more money in order to comply with these changes.

Debate adjourned on motion of Hon. A. Michaels.

Sitting suspended from 12:59 to 14:00.