Caps on taxi payment service fees rather than increased competition from ride-sharing apps like Uber have hit Cabcharge’s profits, the company says. Cabcharge is one of the largest taxi operators in Australia. The taxi network and payments system operator’s full-year net profit has slumped 45 per cent to $25.6 million and revenue is down 10.2 per cent to $168.8 million.
But Cabcharge says the introduction of 5.0 per cent caps on payment service fees in NSW, Victoria and Western Australia have had the greatest impact on profits. “The industries in which Cabcharge operates have always been competitive. We welcome increased competition as it is increasing the penetration of personal transport services as a proportion of the overall transport market,” the company said in its earnings report.
“It is the change in service fee, far more than competition from new or existing market entrants, that has affected our 2015/16 results.”
Cabcharge said other factors hitting its bottom line include regulatory changes which cut the value of taxi licence plates by $27.7 million.
Chief executive Andrew Skelton was optimistic about the coming year as all states proposing changes to taxi regulations had now completed them, removing that uncertainty.
He told SkyNews Queensland’s imposition of a five per cent cap on payment services had also rounded out regulatory pricing changes Australia-wide. “Our payment model will now evolve to focus on growth and winning market share,” Mr Skelton said.
“Various government announcements have cleared much of the remaining regulatory uncertainty overhanging our industry and have enabled us to set our future strategy with confidence.” He also said Cabcharge would invest heavily in technology such as the iHail app, which allows customers to hail the nearest available taxi and pay through the app.
And, Mr Skelton said, new dispatch technologies like Passenger Connect would allow drivers to call passengers on approach. “Technology is a key arm to our growth strategy and we will continue to invest in new projects to ensure we are well positioned to grow our market share,” he added.