THE PEOPLE'S SOLICITORS

 

 

INFORMATION FOR TAXI DRIVERS AND OPERATORS CLASS ACTION

 
 

Cabcharge has, for many years, prevented taxi drivers from obtaining any commission from its 10% surcharge that Cabcharge adds to all non-cash transactions. The purpose of the Class Action is to ensure that Cabcharge is held accountable to drivers for the share in those commissions that would have been offered to all taxi drivers, in a competitive market, and based on the Federal court decision in the case brought against Cabcharge by the ACCC.

WHY DO TAXI DRIVERS AND OPERATORS HAVE A CLAIM AGAINST CABCHARGE?

CRUCIAL FACTS

From 2004 Cabcharge refused to allow any competing payment processing systems to process Cabcharge cards, e-tickets and paper vouchers and Cabcharge also refused to allow any competing payment system provider's cards, e-tickets or paper vouchers to be processed through the Cabcharge payment processing system. The Federal Court held that Cabcharge's conduct to contravene sections of the Trade Practices Act 1974 in the ACCC case against Cabcharge to be based on the following circumstances:

(i) The Cabcharge payment processing system was installed in 95% of all taxi vehicles in Australia which in terms of section 46 (1) (c ) of the Trade Practices Act 1974 constitutes a substantial degree of market power (ACCC v. Cabcharge decision of the Federal Court of Australia)

(ii) From 2004 between 40% and 50% of passenger fares were paid using Cabcharge cards, e-tickets and paper vouchers.
(iii) Cabcharge levied a 10% service fee on all passenger fares processed through the Cabcharge payment processing system.
(iv) Competing payment processing system providers also levied a 10% service fee on passenger fares which they shared as to 3% with the taxi driver and operator
(v) As a direct consequence of Cabcharge's "refusal to deal" taxi operators and drivers were denied the opportunity to receive a share of the 10% service fee on offer from competing payment processing system providers.
(vi) From September 2004 Cabcharge provided meters either free or substantially below cost to undercut competing payment processors and thereby took advantage of Cabcharge's substantial degree of market power and constrain actual or potential competitors. This conduct constituted "predatory pricing" in contravention of section 46 (1) ( c) of the Trade Practices Act 1974 (Federal Court finding in the ACCC v. Cabcharge case)

The "refusal to deal" and "predatory pricing" conduct upon which the Federal Court decision in the ACCC case was based is the exact same conduct that gives taxi operators and drivers the right to statutory compensation in accordance with section 82 of the Trade Practices Act 1974.

LEGAL BASIS FOR CLAIM.

1. The claim on behalf of taxi operators and drivers relies upon the proposition that the "refusal to deal" by Cabcharge contravened sections 46 (1) (c) of the Trade Practices Act 1974.
2. The Federal Court has already declared that "refusal to deal" did contravene section 46 (1) (c) of the Trade Practices Act 1974 based on Cabcharge admissions.
3. Section 82 of the Trade Practices Act provides that where a person suffers loss or damage as a consequence of conduct by another person that contravenes section 46 that person has a right to claim compensation for the loss or damage.
4. The loss suffered is the share of the 10% service fee drivers and operators would have received from competing payment system providers had they been allowed to process the Cabcharge cards, e-tickets and paper vouchers.

STATUTORY RIGHT TO COMPENSATION -SECTION 82

The damage for which compensation is claimed is the Operators and Drivers loss of the opportunity to receive a share of the 10% surcharge levied on passengers when payment of a taxi fare is processed through the on board payment processing system.

The loss is a direct consequence of the refusal by Cabcharge to allow competing payment processing systems to process Cabcharge cards and vouchers in circumstances where competing payment processing systems had offered to share the 10% surcharge with both Operators and Drivers.

COMPENSATION

The claim for compensation for both Operators and Drivers is based on the total value of fares processed via the Cabcharge payment processing system over the past six years. The amount will vary for each individual Operator and Driver depending upon the number of shifts worked and fares processed. To provide a guide as to the potential claim sum we refer to a research paper by Peter Abelson from the Department of Economics at the University of Sydney published in May 2009 which included research into driver incomes. The report concluded that the average full time driver in Sydney gross receipts from passenger fares processed via a payment processing system was $60,000.

The Federal Court in the ACCC case found that 40% of all passenger fares are paid using Cabcharge cards, e-tickets or paper vouchers.

The amount of compensation payable to each Taxi driver and operator will vary according to the number of shifts a time a driver has worked over the past six years and for an operator the number of vehicles in the individual operators fleet.