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A2B Australia
Company typePublic company (ASX: CAB)
IndustryLand transport
Founded1976
FounderReg Kermode
Headquarters
Sydney
,
Australia
ProductsTransport-related services in Australia, United Kingdom & Europe
RevenueIncrease A$197.3 million (2014)
Decrease A$65.8 million (2014)
Websitewww.cabcharge.com.au

Cabcharge Australia Ltd (CAB) is an Australian public company which was listed on the Australian Securities Exchange ASX: CAB in December 1999 and is an ASX 200 company. The company's founder and CEO is Reg Kermode. [1] In 1976, the company established Cabcharge, an account payment system to provide a way to pay for taxi fares by non-cash means, which today is the sole provider of the in-taxi service. In 2005 it joined with a 49% interest in a joint venture with Singapore-based ComfortDelGro Corporation Ltd in ComfortDelGro Cabcharge Pty Ltd (CDC). Since then CDC has had an increasing control in the bus industry in Sydney and Melbourne. Subsidiaries of CAB operate taxi network services, which are booking and dispatch services for taxis in Australia, which today covers over 7,000 taxis.

The company's activities have sometimes been controversial and it has faced strong criticism at times from inquiries and regulatory bodies, especially over its Cabcharge taxi payment system. The company was the subject of Federal Court proceedings in 2010 over alleged anti-competitive practices including predatory pricing activities. It was heavily fined and forced to pay a record high $15 million settlement for these behaviours.[2] The company is also facing accusations of profiteering for the 10% surcharge it imposes on taxi fares paid by a payment card and the matter is currently being investigated by the Reserve Bank of Australia.[3] The surcharge has been reduced by law to 5% in Victoria following recommendations made by the Taxi Industry Inquiry and a further review of the surcharge in that State may lead to the figure being set at well below 5%.[4] In December 2014 the surcharge was also reduced to 5% in New South Wales.

History

The Cabcharge taxi payment system was established in 1976 to provide an alternative payment system to cash in the taxi industry.[1]

In January 2002, Cabcharge acquired Combined Communications Network to provide taxi booking and dispatch services in Sydney. Today, it provides taxi booking and dispatch services through Taxi Networks in New South Wales (Combined Communications Network[5]) and 13CABS in Victoria.[6] Today, over 7,000 taxis operate on Cabcharge booking and dispatch networks in Sydney, Melbourne, Adelaide and Newcastle.[7]

In March 2003 it acquired Black Cabs, Melbourne’s second largest taxi company, to be followed by Newcastle Taxis and Melbourne’s Arrow Taxis.

In 2005 Cabcharge formed a joint venture company with Singapore-based ComfortDelGro Corporation Ltd to form ComfortDelGro Cabcharge Pty Ltd (CDC), in which Cabcharge holds a 49% interest. CDC purchased the Westbus Group and later the Baxter private bus business and Toronto Bus Services. In 2009, CDC purchased the Kefford Group in Victoria, and has expanded by acquiring other bus operations.

In 2008, Cabcharge established EFT Solutions which develops payment system software for other clients, including major banks and retailers, as well as for the Cabcharge system.

Outline

Cabcharge's principal activities include:

  • provision of charge account facilities for businesses and individuals to enable non cash payment of taxi fares.
  • development of a point-of-sale system that allows taxi users to pay their fare using third party charge, credit and debit cards and Cabcharge products. The system requires passengers to pay a 10% surcharge on their fare although the surcharge is currently being reviewed by the Reserve Bank of Australia following public comments and complaints that the surcharge is excessive.[3]
  • software development.
  • provision of taxi booking and dispatch services. Additional capture of taxi owners, operators and drivers is practised through provision of services including repairs and installation of in-vehicle equipment, insurance, vehicle leasing and training.
  • development of taxi-related hardware and software like taxi security camera systems, meters, and transaction processing equipment.
  • provision of taxi booking and dispatch through CityFleet UK with operations in London, Edinburgh, Liverpool, Birmingham and Aberdeen in a joint venture with ComfortDelGro Corporation.
  • operation of buses and coaches in NSW and Victoria through a joint venture with ComfortDelGro. Cabcharge has a 49% shareholding in ComfortDelGro Cabcharge. In NSW this operates Hillsbus, Hunter Valley Buses, CharterPlus and Qcity Transit and in Victoria, CDC Melbourne, CDC Ballarat and CDC Geelong.

Federal Court action by ACCC

Main article: ACCC v Cabcharge Australia Ltd

In June 2009, the Australian Competition and Consumer Commission (ACCC) began proceedings in the Federal Court of Australia against Cabcharge alleging that Cabcharge had breached the Trade Practices Act (TPA) by misusing its market power and entering into an agreement to substantially lessen competition. The action centered on Cabcharge's conduct in refusing to deal with competing suppliers to allow Cabcharge payments to be processed through EFTPOS terminals provided by rival companies and supplying taxi meters and fare updates at below actual cost or at no cost.[8]

On 24 September 2010, Cabcharge admitted to three contraventions of the TPA to settle the proceedings. The Federal Court approved the settlement, and declared that Cabcharge had breached the TPA by taking advantage of its substantial degree of power in the Australian markets for the supply of services to enable non-cash payments for taxi fares and charges by taxi passengers and non-cash instruments that could be used only for the payment of taxi fares and charges. The Court imposed the highest ever penalty for misuse of market power, imposing a fine of $15 million ($14 million in civil penalties and $1 million in costs).[8]

Sydney Morning Herald allegations

Cabcharge's CEO Reg Kermode has been the subject of a sustained campaign of criticism by Sydney Morning Herald journalist Linton Besser. Besser calls Kermode, "The Taxi Tsar".[9] Besser claims that Cabcharge and Reg Kermode "...along with the industry's other big players, continues to benefit from millions of dollars worth of free taxi plates issued to it by successive governments..." as a result of political and bureaucratic connections and favouritism stretching over a generation.[10][11][12]

See also

References

  1. ^ a b Cabcharge - History
  2. ^ See the findings and observations of the Federal Court of Australia in ACCC v Cabcharge Australia Ltd [2010 FCA 731]; ACCC v Cabcharge Australia Ltd (No 2) [2010] FCA 837.
  3. ^ a b "Reserve moves to tackle card fee", Peter Martin, The Age, 21 March 2012.
  4. ^ Transport Legislation Amendment (Foundation Taxi and Hire Car Reforms) Act 2013 - see http://www.legislation.vic.gov.au.
  5. ^ Combined Communications Network
  6. ^ 13CABS
  7. ^ Annual Report 2015
  8. ^ a b ACCC v Cabcharge Australia Ltd [2010 FCA 731]; ACCC v Cabcharge Australia Ltd (No 2) [2010] FCA 837.
  9. ^ See articles headed "The Taxi Tsar" at www.smh.com.au/interactive/2009/taxis/ - retrieved 14 January 2012.
  10. ^ "Inside the world of Mr Taxi", Linton Besser, Sydney Morning Herald, 19 September 2009.
  11. ^ "Defunct cab body costing millions", Linton Besser, Sydney Morning Herald, 21 September 2009.
  12. ^ "Main players had most to lose from reform plan", Linton Besser, Sydney Morning Herald, 21 September 2009.
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