Lobbying Effectiveness in Australian Context for UberArticleBattersby, L. and Schetzer, A. 2015, ‘Uber : the villan everyone loves to use’, The Sydney Morning Herald, 13 September, viewed 13 September 2015, SummaryBattersby and Schetzer (2015), reports on UberX’s obstacles in operating in Australia, due to the lobbying of the taxi industry against the seemingly lack of regulation for UberX in an excessively regulated industry. This article follows UberX’s rise to popularity and its fight with regulators to continue its operations in Australia.Application of conceptsThis article relates to the political and regulatory environment brought about by excessive regulation of the taxi industry. Highlighted in the article, the taxi industry is notoriously over-regulated in the world, and in Australia (Abelson 2010, p.41). This over-regulation presents itself as a government failure (Weidenbaum 2004) as regulations became protectionist of the taxi industry, creating a monopoly before the reform in 2012. After the reform, the government can be seen as an enabler by encouraging competition through cheaper licensing by lowering the price from $500,000 each to $22,000. Hire-cars, seen as the closest taxi service to UberX, are required to pay a $40,000 license fee. However, UberX is exempt from this fee and requires no endorsement from the Taxi Services Commission. This is poor institutional capacity that is reflected from the inability to enforce rule of law (Robson 2015, p. 13) on UberX. Nonetheless, another government institution, the Australian Tax Office has been successful in enforcing it on UberX after declaring their drivers as taxi drivers, and subsequently applying government functions such as taxes and industry policy to report on their income (Robson 2015, p.34).
The ruling has explicated UberX’s political helplessness (Robson 2015, p. 22) against the influence of the government as they were forced to ‘increase fares by 10 percent to make up for lost income’ from the ruling, which was highly influenced by the taxi lobby and its representative bodies (Khadem 2015).AnalysisUberX’s future in Australia relies heavily on their ability to overcome the regulatory capture by the Australian Taxi Industry Association and related representative groups. UberX’s prospects are bleak as UberX drivers being charged for operating illegally (Menagh 2015) and the government warning ‘of a campaign to come’ (Saulwick and Snow 2015), rendering the government as a threat. The chairman of major taxi network company, Cabcharge, was an ex-premier of the state of NSW and in 2009, secretary of the then Minister of Transport means that there are powerful connections to government officials, a key factor in lobbying success (Mahoney 2007), and in this case, against UberX’s operations.
Policymakers and lobbyists have always been involved in the business of getting people to do something, and getting an industry to pay dues to the government is not unique. Indeed, a close look at the taxi industry in Australia shows that there were more than 100 major taxi companies, including the largest in South Australia that in 1995 had paid back their profits to the government (Waldwell 1996). Furthermore, there exist an alarming number of other Australian organisations (including a number of international companies) that have been funded by the “freebie tax” program, which is based on their revenue coming from low-cost taxi fares that the government doesn’t actually give to them.
The most important aspect of the taxi industry, as seen with a recent report by the Australian Competition and Consumer Commission which looks at the cost of legal and regulatory enforcement, is that it is highly profitable, which means that as more and more people are having access to safe, convenient, private transport, the government is expected to put more of the taxi industry’s resources into ensuring that their safety, profit and security are more effectively protected. Furthermore, a recent report found that the average passenger fee paid by major companies is over $500,000 and that a large portion of all fares paid to drivers are paid by taxis, in a matter of seconds – that is far too large to avoid with the current system in place – and in turn, drivers are frequently on the losing side.
Some taxi companies have argued that due to the economic pressures, regulations and security constraints, they need to build new taxis to compete with major carriers and provide safety (see Taxi Industry In Australia ). And while the fact that most of these taxi companies are big and strong, it is hard to see any real difference when working close to them. While the Australian government has had a long history of regulating the taxi industry, it had done so only to protect its own interests when it started, and the current arrangements are unlikely to change that.
The current legal system is poorly policed and the current rules are inconsistent with the values of fairness, accountability and individual rights in the taxi industry. Some argue that if the current government were to introduce the government-only taxi regulatory system, it would become a law-and-order tyranny. The current Liberal government of the day, Tony Abbott, has proposed abolishing the current federal Taxi Regulation Service, which is also used by taxi organizations.
The current regulatory regime has also created and fostered a situation where individual companies and individual investors who wanted to invest directly in the taxi industry and whose livelihoods depended on building the taxis were able to do so. This has led to a serious financial problem which has been compounded by a policy of deregulation that favours large, well-known companies over the most well-established, well controlled and regulated taxi service.
There’s also a lot more at risk under current regulations. The Australian Competition and Consumer Commission has found that in Australia, the majority of its annual operating expenses – at the current rate of $14.6 billion – are borne by private players including ride-share companies (Cannavox 2011). The business models of private car makers have long been a key part of Australia’s taxi business model, as many drivers make $100,000 and carry hundreds or even thousands of passengers each year (Jong 2016).
The current regulations – and the current policy with respect to the taxi industry – include some draconian, even unnecessary changes to the existing Federal Rules, the current rules governing the state’s taxi fleet and the current taxi fleet standard. The current regulations set out the rules for what they would mean in practice, and it was for that only: not for the taxi industry itself.
The current regulation system may have created a situation in which major taxi firms are being pressured to cut fares and reduce services. Some argue that under the current system, those firms who are in a better position to raise revenues are the