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NSW government plans to compensate taxi industry for Uber arrival with another $1 billion package

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Rideshare and taxi users in NSW will be plagued with a $1 continued surcharge as part of a staggering $1 billion taxi industry compensation package being considered by the NSW government more than six years after Uber became state-owned. legalized.

When rideshare was legalized in late 2015, the then government of Baird announced a $250 million compensation to the taxi industry that offered plate owners $20,000 per plate. The Australian Reports the government now wants to increase that compensation package tenfold to about $200,000.

The surcharge, known as the NSW passenger tax, which applies to rideshare, taxi and rental cars, will continue to pay for the $1 billion package. It was introduced in 2018 for a maximum of five years. With approximately 175 million journeys per year in NSW pre-pandemic, the levy has already paid a $250 million compensation plan but remains in effect.

Since drivers pass the cost, this attracts GST, so customers pay $1.10. The compensation package actually provides a $125 million windfall for the federal government.

To take a step back: In mid-2016, the then Baird government announced a $20,000 payment in transitional assistance to licensees as part of a $250 million industry adjustment package to pay for rideshare legalization.

The package included $98 million for license holders — $20,000 each for up to two licenses held before July 1, 2015 — and $142 million for taxi license holders who face difficulties as a result of the changes; and up to $10 million for a buy-back arrangement for perpetual rental car licensees.

A NSW tax permit was worth $367,000 in 2014. Before that, they traded over $400,000 and before the pandemic, after rideshare, they traded for about $70,000.

The charges are not a government levy – they are traded in the private market just like any other asset.

Compensation claims were closed in January 2017. The government reserved higher payments for license plate holders that they bought closer to Uber’s legalization.

The Australian reports Transport for NSW officials told the industry last September that a $50,000 license, again limited to two licenses, was under consideration.

Current NSW Transport Secretary David Elliott told the budget estimates committee hearing in March that he preferred a “more generous” fee over the taxi industry.

“I don’t want people to end their working lives as taxi drivers who are unnecessarily burdened by the point-to-point financial implications of Uber,” he said.

More of The Australian here

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