The Federal Court has found that an anti competitive roster system has operated in the taxi industry in Shepparton for many years and has ordered total penalties of $77,000.
The proceeding was instituted by the Australian Competition and Consumer Commission on 8 August 2008 against White Top Taxis Limited, its directors Mr Rex Powell, Mr Allan Bemrose and Mr Anthony Mason together with one of the drivers affiliated with White Top Taxis, Mr Geoffrey Groves.
Justice Finkelstein of the Federal Court in Melbourne made a number of declarations by consent. These included a declaration that from October 2003 to 18 June 2008, the directors and Mr Groves were party and gave effect to an arrangement or understanding (between themselves and other operators of taxi-cabs who were members of or affiliated with White Top Taxis) that allocated shifts under a roster.
Justice Finkelstein found that the roster contained a provision that operators of White Top Taxi cabs whose taxis were the subject of the roster, would not operate their taxi cab during other times, albeit that there were some limited exceptions.
The Shepparton roster system which operated for decades essentially divided work between all vehicles by allocating each vehicle a rotating weekly shift of hours. Over the course of a number of months each vehicle would work each of the roster slots allocated each week. By way of example, at one stage the roster for the 19 vehicles comprising the general fleet had 19 weekly slots which rotated through a 19 week cycle. The roster operated 24/7 for the whole year.
The court was told that the roster had both a roster on and roster off purpose. The roster on provision provided for a taxi to operate at a time of low demand and to ensure availability of a service; however the roster off provision had the purpose of limiting the number of taxis at higher demand times.
Justice Finkelstein found that White Top Taxis had attempted to induce operators of White Top Taxis cabs to give effect to the roster off provision.
In addition to making declarations regarding the illegal conduct, Justice Finkelstein made the following orders also by consent:
- injunctions restraining similar conduct in the future
- an order that White Top Taxis implement a trade practices law compliance program
- an order that White Top Taxis pay a penalty of $30,000
- an order that Mr Powell, Mr Bemrose and Mr Mason each pay a penalty of $14,000
- an order that Mr Groves pay a penalty of $5,000, and
- an order that White Top Taxis, Mr Powell, Mr Bemrose, Mr Mason and Mr Groves pay a contribution of $15,000 towards the ACCC's costs of the proceeding.
The arrangement or understanding reduced the ability of individual taxi operators to operate their business and to serve the public of Shepparton at times when those Taxi Operators may have otherwise made themselves available for work.
ACCC Chairman, Mr Graeme Samuel, welcomed the court's decision and the imposition of the penalties against each of the parties.
Mr Samuel said the penalties imposed by the Federal Court reflected the seriousness of the conduct whilst recognising certain mitigating circumstances such as the dual purpose and the fact that the arrangements were long standing and inherited by the current directors.
Mr Samuel noted that whilst some in the industry may wish to describe such arrangements as 'gentlemen's agreements', such arrangements and understandings are illegal and have previously been identified as such by the ACCC.
"A rotating and intrusive roster such as the Shepparton roster reduces the ability of individual taxi operators to choose when they will serve the public of Shepparton and to develop and retain custom through differentiating themselves in terms of service delivery," Mr Samuel said. "An overly extensive roster such as that operated in Shepparton also intrudes into the ability of an operator to marry lifestyle and investment returns in their business, and facilitates unlawful collusion."
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