Taxi fares set to fall as Cabcharge loses monopoly 3



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If you’ve ever paid for a taxi using your credit or debit card, you may have paid too much according to the Australian Competition and Consumer Commission.

The ACCC has been fighting a long-running legal battle with Cabcharge over what it described as a monopoly on card-processing.

Until recently Cabcharge machines in taxis were the only terminals that could process all cards, including the Cabcharge ones used by businesses.  Cabcharge added a processing fee that was 10 per cent of the taxi fare.

The ACCC was successful in its bid to allow other eftpos terminals to process Cabcharge cards.

The impact of this on regular taxi users is that we will see the surcharge fall and will ultimately pay less for taxi fares.

“Now that other terminals can also process Cabcharge payments, they can also cover all forms of payment, and so taxi drivers now may be able to at least have competition between which terminal they want in their cab and that competition we think should see a reduction in fares”.

Some states have passed legislation limiting the card-processing fee to 5 per cent of the fare, however the ACCC’s chairman Rod Sims believes that fares could fall further with more competition.

“We’d hope that when you move from what has been a traditional monopoly by Cabcharge to where you’ve got competition for these processing machines that you will get charges reflecting normal retail levels,” he said.

In most shops, a typical credit card surcharge is around 1 to 2 per cent.

According to the ABC, Cabcharge was forced to pay $15 million in penalties and costs in 2010 after the ACCC’s initial action against it for refusing to engage with certain firms and engaging in predatory pricing.

Tell us, do you think it’s fair to have to pay a card-processing fee in taxis or in today’s cashless world would you expect this to be part of the service? 

Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. I recently had to pay an exorbitant $25 for a taxi from Sydney international to domestic terminals because it was too early for the buses and the train would have missed my connection.

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