Shining A Light Into The Rotten Core Of The Taxi Industry

Release date: 13/07/2015

Sydney Morning Herald, by TWU NSW Secretary Michael Aird, 13 July 2015

Imagine if the rules of your job hadn't changed since the middle of the 19th century. Miners would still be working side by side with their children, factory workers would still be entertained on their 16-hour days by lectors, and when you talked about a computer you would mean a person and not an object!

While the industries mentioned above and many more have changed with the times, there is still one run on 19th century rules – the taxi industry. Many taxi drivers still operate under a "bailment" system that was codified for the pony and traps of 1850's London. Under this ancient system, drivers hire the licence plate from an operator, effectively paying for the privilege of going to work.

While the travelling public are well within their rights to lament the high cost of cab fares, in most cases the cabbie in the driver's seat hasn't exactly been making a mint. Instead, because of the bailment system, it is the operators, plate owners and taxi base stations that have been raking in the lion's share of the profits.

While no comparable data is readily available for the ACT, an expert report commissioned by the NSW Independent Pricing and Regulatory Tribunal in 2011-12 determined that taxi drivers earn on average about $10 per hour. That's $7.29 below the minimum wage for every hour at work.

Pitiful wages like these are why so many cabbies are driving crazy hours in clapped-out cars just to put food on the family table.

The arrival of UberX must be viewed in the context of these exploited cabbies, frustrated passengers and powerful vested interests that have a monopoly to defend. To the ACT government's credit, it has used the arrival of UberX and other ride-sharing services as an opportunity to conduct a review and shine a light into this entirely dysfunctional industry.

The Transport Workers Union NSW and ACT branch's submission highlights how the existing bailment system leads to low pay, overwork and low safety standards. Poor working conditions are the prime cause of poor driver quality, which in turn is the prime cause of poor service and poor safety standards. To put it differently, safety and service standards in this essential industry are closely intertwined with working conditions.

The TWU has attempted to reform the shady and age-old bailment system on numerous occasions, but at every attempt we have been blocked by the operators and their industry bodies who are determined to keep hold of their cartel.

On the other hand, we do not endorse UberX as it now operates. UberX drivers are not guaranteed any level of income. They do not receive any of the protections traditionally extended to employees and some other workers.

The company's claims that it is a technology company and not an employer of drivers are purely self-interested denials of the reality of their position. UberX drivers are not people operating their own businesses, but are enmeshed entirely in the UberX business. Work is allocated to them by Uber and fees are collected by Uber. They have no capacity to delegate work and they do not employ workers.

Left unchecked, the precarious nature of the engagement of UberX drivers is likely to aggravate rather than improve the industry's existing failures. It's merely a further step down the path already travelled by the industry, with a different cabal pocketing the profits at the expense of drivers and passengers. Are we really going to allow ourselves to be so excited by the use of an emerging technology that we accelerate this race to the bottom on safety, pay and employment?

Instead, the arrival of UberX offers an opportunity to reflect on both the state of the industry and its future. The opportunity should not be missed.

The reality, as the Californian labour commissioner recently determined, is that UberX drivers are in truth employees and should be treated as such. Here in Australia, there are already examples from the road transport industry that can be applied to the taxi industry. For example, the establishment of the Road Safety Remuneration Tribunal in 2012 demonstrates that it is possible to establish minimum labour standards designed to improve safety and fairness for all workers, regardless of their particular method of engagement or precise nature of the work.

As a first step, we need to bring together government, industry and drivers' representatives to create a genuinely level playing field. A minimum safety net of terms and conditions must be established for drivers regardless of their classifications as employees, bailees or independent contractors. There must also be proper training and education for drivers, and robust enforcement of the rules to make sure no one has an unfair advantage.

Bold action by the ACT government to reform the entire industry and create a genuinely level playing field for all operators will benefit passengers, drivers and the industry. We look forward to working with the government and all interested parties to make this a reality.

Michael Aird is the secretary of the Transport Workers Union of NSW. This is an edited extract of the union's submission to the Legislative Assembly's inquiry into the taxi industry.

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