ACCC permits Victorian country taxi co-ops to agree prices in the short term

19 June 2014

The Australian Competition and Consumer Commission has decided to temporarily exempt Victorian country taxi operators working in co-operatives from competition laws so they can agree the maximum prices for their cooperative network when state pricing laws change from 30 June.

Victorian authorities will no longer prescribe fares in regional and country taxi zones from 30 June. The Victorian Taxi Association (VTA) asked the ACCC to exempt 19 regional and country based cooperative networks from provisions of the Competition and Consumer Act (2010) designed to prevent price fixing among competitors.  The VTA argued that if individual cooperative networks cannot agree maximum fares, the networks won’t function efficiently when Victoria’s taxi reforms are introduced from 30 June.

“The operators have a short timeframe to adjust to wider regulatory reform. We are giving them temporary authorisation so that in the interim they can keep their model of offering cabs based on who’s available and close – not on differing prices,” said ACCC Deputy Chair, Dr Michael Schaper.

“This decision should not be taken to indicate whether or not the ACCC will grant final authorisation. We consider it’s appropriate to grant such temporary authorisation as a transitional measure while the industry adapts to reform. We have not come to a decision about the longer term and we welcome submissions on whether this exemption should be limited to a transition period only and, if so, what an appropriate transition period might be.”

The Victorian Taxi Association has not applied for authorisation to stop individual operators or drivers from offering discounts off the maximum fare. About a quarter of Victoria’s regional and country networks are cooperatives, accounting for about one third of cabs in those zones.

The Victorian Government’s taxi industry reforms will allow operators or networks in regional and country zones to set their own fares from 30 June 2014, subject to them informing Victoria’s Taxi Services Commission and passengers of their maximum fares.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. The ACCC may grant interim authorisation where the ACCC considers it appropriate to allow the parties to engage in conduct while the ACCC is considering the substantive merits of the application.

Further information about the application for authorisation, including a copy of the ACCC's interim authorisation decision and public submissions, is available on the public register.   

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NR 157/14
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