THE impact on taxi plate values from the latest move by the state government to add supply into the system is likely to take some time as the sector absorbs the news.
THE impact on taxi plate values from the latest move by the state government to add supply into the system is likely to take some time as the sector absorbs the news.
Private taxi plates advertised at the weekend were for sale at prices ranging from $305,000 for the plate alone – which has a capped earning rate of $355 a week.
Those advertisers would most likely have been unaware of Transport Minister Troy Buswell’s announcement at the weekend to add 30 new government plates to the system and change regulations to allow the state to command a bigger share of the taxi market.
The state’s regulations cap its representation at 35 per cent of the fleet, which is understood to be around 1,830 taxis in the metropolitan area.
In a statement, Mr Buswell said 30 was the most new plates he could release until the regulatory change, suggesting the government currently controls about 620 plates.
His statement said the government’s proposed provision to move to 45 per cent of market share would provide for the release of up to 300 additional plates, suggesting the total market could grow to about 2,130 taxi plates.
However, Mr Buswell’s statement suggested the 300-plate target might not be reached if industry statistics about unmet passenger demand improved.
“Once the regulations are amended, we intend to release full-time plates each month until the industry can meet the agreed performance targets,” he said.
On top of the 30 plates to be released immediately, Mr Buswell hoped the regulation changes would allow a further 30 plates to be released within the next three months – totalling 60.
Last financial year, the Department of Transport released 56 unallocated taxi lease plates.
The move to release more plates comes two months after Mr Buswell met 120 drivers at a forum to discuss industry issues.
According to a Department of Transport report on the forum, taxi plates were the biggest single issue raised by the drivers.
The majority of respondents to that issue called for either tighter controls on the release of plates, a moratorium on plate releases or even a reduction in plates.
Most drivers who provided feedback to the issue said there were already too many taxis on the road and some questioned the policy mechanisms which provided for an expansion of the fleet. A minority of drivers attending the forum wanted more plates.
According to its annual report, the department earned more than $9.1 million in 2009-10 from taxi licence fees. It charges up to $250 a week for conventional taxi plates, significantly undercutting the private plate market where non-peak period taxi plate lease rates are capped at $355 a week.
While the weekly rate represents a 6 per cent annualised return on a plate at current market values, the threat of deregulation is an implied risk that many competing investments do not share.
