Worldwide icon-chevron-right South Pacific icon-chevron-right Australia icon-chevron-right Melbourne icon-chevron-right The Victorian government announces plans to introduce a $2 per trip levy for Uber
News / Transport & Travel

The Victorian government announces plans to introduce a $2 per trip levy for Uber

Flinders Street Station at night
Photograph: Graham Denholm

Today, the Andrews Labor Government announced some significant changes to the transport industry – specifically, to the single commercial passenger industry (or in simple terms, taxis, hire cars and ride-sharing services like Uber). Yes, it will involve a $2 surcharge for Uber trips, and yes, some of the changes will divide opinion, but in the long term, we reckon that there are a few reasons to be cautiously positive.

#1: The Victorian government supports ridesharing apps like Uber
Surprised? Don’t be. Uber’s rise in Australia has been dogged by legal battles and criticism from the taxi industry – but in the end, it’s here to stay and effectively legal. The Victorian government are all about ridesharing services; they just want to level the playing field. Which means:

#2: Taxis will be able to set their own fares
Right now, taxi operators have to abide by strict fare regulations. Drivers also need to purchase hefty licenses (which can cost $150,000), and these two factors make competing with Uber impossible. To even things out, the government plans to deregulate fees and abolish license fees. They’ll even “buy back” licenses over time. Naturally, all this is going to cost money, which is why:

#3: There will be a $2 Uber surcharge while the changes are being made
No one likes suddenly paying more for a service, but according to the government, the $2 levy won’t be permanent. While the changes to the taxi industry take place, there’ll be a $2 cost on “all commercial passenger vehicle providers” during the transition. This money will go into a $75 million ‘Fairness Fund’, which will “provide targeted support to industry participants experiencing immediate financial hardship as a result of these changes”. What’s more, $25 million will go into improving services for those with a disability.

So what do these changes mean?
In two words: cheaper transport. The Victorian government hopes that flexible taxi fares will “drive competition and reduce the cost of travel for passengers”. Of course, the outcome remains to be seen – so don’t get too excited just yet.

Safety is also a priority with these reforms – not only will drivers still be subject to criminal checks, but taxis will only be able to work at rank and hail points if they meet stringent security measures, which include fare meters and cameras. Right now, this doesn’t look as if it applies to ridesharing apps.

There’s no timeline of exactly how long this will take (or whether the changes will go exactly to plan) but watch this space for updates as they come.

Read more about transport in Melbourne with Time Out's ranking of Melbourne's trams from best to worst.