Uber, Ola and Didi price hikes: Sydney taxi drivers offered $150,000 as passenger service tax rises

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Why your Uber will get more expensive – all to bail out taxi owners whose poor service helped fuel the ride-sharing boom

  • All rideshare customers will pay a service fee of $1.20, up from the old fee of $1
  • The fee will be used to pay higher compensation for all taxi license holders
  • Sydney metro taxi drivers will be offered up to $150,000 for their plate
  • Taxi drivers in other areas of NSW will be offered between $85,000 and $195,000

Your rideshare journey is about to get more expensive under a NSW plan to raise its Passenger Services Tax to help taxi drivers exit the industry.

Taxi license holders would be compensated up to $150,000 for their license plates in Sydney – but this will come at a cost, with the fee paid by rideshare, taxi and hire car passengers rising from 1 $ to $1.20 for each trip.

The higher tax would remain in place until 2030 and is expected to bring in an additional $260 million for the struggling taxi industry.

The service tax hike would help fund the NSW government’s plan to deregulate point-to-point transport services like taxis and Uber rides.

Drivers from other parts of the state will be offered between $40,000 and $195,000, depending on where they live.

All taxi and Uber customers will pay a tax of $1.20 on each trip to fund compensation for NSW taxi license plate holders

The huge taxi driver compensation will be paid by customers through the service tax.

The government previously offered compensation as low as $25,000 for regional drivers and up to $100,000 for those in the city.

NSW Transport Minister David Elliott told 2GB’s Ben Fordham the pay package was “the most generous in Australia by a country mile”.

Mr Elliott said he was unable to find a complaint about the swab.

“When you consider how Uber has lowered the point-to-point (transportation) price, I really don’t think it’s going to be considered unfair or unreasonable,” he said.

The NSW government has introduced a plan to compensate taxi drivers after ride apps, like Uber, started to invade the industry

The NSW government has introduced a plan to compensate taxi drivers after ride apps, like Uber, started to invade the industry

“(The levy) will ensure that taxpayers are not necessarily burdened with this package.”

Mr Elliott has also asked the NSW Taxi Council to accept the new pay package after the government faced serious backlash for its previous offer.

‘I would like to ask the members of the Taxi Council to speak to their peak body and accept the offer,’ he said.

“We only have two weeks of parliament left and if we don’t get legislation it won’t get passed, it will probably end up going to committee and scrutinizing.

“It means taxi drivers won’t get their money back and there’s no guarantee a review will provide a better option.”

The NSW government has presented a point-to-point deregulation plan after ride apps like Uber began to invade the industry.

Sydney taxi drivers will receive up to $150,000 for their license plate, fully funded by a $1.20 surcharge for taxi and Uber customers until 2030

Sydney taxi drivers will receive up to $150,000 for their license plate, fully funded by a $1.20 surcharge for taxi and Uber customers until 2030

Deregulation means that taxi services will no longer need to pay exorbitant fees to obtain a taxi license plate, some costing over $200,000, and there will be no limit to the number of taxis that can operate in an area.

The scheme was first introduced in 2018 and saw a $1 levy charged to all NSW taxi service customers in a bid to fund the planned $250million.

As of June 2022, the $1 levy has raised over $259 million.

However, the higher compensation offered to taxi license holders means that the charge will be increased to $1.20 until 2030.

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