ACCC accepts undertaking over restrictions on Townsville Taxis booking apps and mobile phones

15 October 2014

The Australian Competition and Consumer Commission has accepted a court enforceable undertaking from Standard White Cabs Limited, trading as Townsville Taxis, relating to alleged breaches of the competition provisions in the Competition and Consumer Act 2010 (the Act).

The ACCC’s investigation followed allegations that Townsville Taxis had been restricting its affiliated taxi drivers’ from using third party taxi booking applications and mobile telephones to accept taxi bookings from customers.

Third party taxi booking applications are a relatively new technology, commonly operated on a smart phone or tablet computer device, which facilitate taxi bookings between a customer and taxi driver.

The allegations raised concerns that Townsville Taxis was likely supplying taxi booking services to its affiliated drivers on condition that they would not acquire taxi booking services (through the use of third party booking applications) from a competitor of Townsville Taxis, in this particular instance, goCatch.

Additional concerns arose that Townsville Taxis had prohibited its affiliated drivers’ lawful use of mobile telephones to accept taxi bookings from customers, with the substantial purpose of preventing the supply of taxi booking services via mobile phones. The ACCC considered that the conduct was likely to result in taxi customers in the Townsville/Thuringowa region of North Queensland being prevented from booking taxis in this way.

Townsville Taxis has acknowledged that its conduct was likely to have breached the exclusive dealing and exclusionary arrangement prohibitions in the Act.

“It is extremely important that new technological services, such as third party booking applications, are not unlawfully restricted in their ability to compete with established taxi booking services,” ACCC Chairman Rod Sims said.

"The ACCC has had a long-standing focus on the taxi sector and will continue to monitor behaviour in this sector which might have an anti-competitive effect.”

“We will, in particular, monitor behaviour in relation to third party taxi booking applications,” Mr Sims said.

As part of its undertaking, Townsville Taxis will ensure that its affiliated drivers are free to lawfully use a third party booking application and/or a mobile telephone to receive taxi bookings from customers, and will provide them with notice of the undertaking.

Townsville Taxis will also implement a competition and consumer law compliance program designed to minimise its risk of future potential breaches of the Act.

The undertaking is available on the public register.

The ACCC has previously taken action in the taxi industry, including in 2010, the Federal Court ordered Black and White Cabs Pty Ltd to pay a $110,000 penalty for breaching the Act after it required some of its taxi operators to exclusively use the Cabcharge Payment System when processing payments. In a separate matter, also in 2010, the Federal Court ordered Cabcharge Australia Limited to pay $14 million in penalties for breaches of the misuse of market power provisions under section 46(1) of the Act.

Release number: 
MR 247/14
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