Study commissioned by Uber against compensation for taxis if ride-sharing is legalised

The preference of using an Uber instead of an ambulance by a woman in Melbourne about to give birth shows the changing commuter preference in Australia. It appears that the ride-sharing service has also gained influence in policy formulation in the country’s transport industry.

On Wednesday, Uber released a report made by Professor Richard Holden from the University of New South Wales arguing against compensation to taxi licence holders for their losses with the possible legalisation of ride-sharing, reports Brisbanetimes. Queensland taxi owners called the report a diversion.

Since the roll out of Uber service in Queensland in May 2014, the licence values of cabs in the Australian state was halved. But despite that argument, Holden says it is not strong enough, comparing the planned compensation to reimbursing losing lottery ticket holders.

“Not only does their ‘compensation’ come (before the change), through the price of the ticket, such (after the fact) compensation provides perverse incentives for excess purchases of lottery tickets,” Holden explains.

The professor believes market prices should have already reflected the possibility of regulating and business changes this vast. However, he based his stand that many taxi owners have received an economically fair return on their investments on study of taxi licence prices in New South Wales and Victoria, not Queensland.

Because of the plunge in the value of their assets, the taxi owners have held several public protests against Uber which sometimes resulted in gridlock, reports The Age. According to latest figures published by the Taxi Services Commission, the average value of a licence to operate a taxi in metropolitan Melbourne has been cut to half in the last 12 months to about $150,000 from $300,000.

VIDEO: Uber vs Taxis