Industry Land transport Website www.cabcharge.com.au Revenue 197.3 million AUD (2014) Net income 65.8 million AUD (2014) | Founder Reg Kermode Headquarters Sydney, Australia Founded 1976 | |
Type Public company (ASX: CAB) Products Transport-related services in Australia, United Kingdom & Europe Stock price CAB (ASX) A$ 4.08 +0.12 (+3.03%)3 Mar, 4:10 PM GMT+11 - Disclaimer Subsidiaries Maxi Taxi (Australia) Pty Ltd. | ||
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. 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.
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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. 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. 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%. 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.
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) and 13CABS in Victoria. Today, over 7,000 taxis operate on Cabcharge booking and dispatch networks in Sydney, Melbourne, Adelaide and Newcastle.
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:
Federal Court action by ACCC
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.
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).
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". 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.