Lobbying Effectiveness in Australian Context for Uber

Article

Battersby, L. and Schetzer, A. 2015, ‘Uber : the villan everyone loves to use’, The Sydney Morning Herald, 13 September, viewed 13 September 2015,

Summary

Battersby and Schetzer (2015), reports on UberX’s obstacles in operating in Australia, due to the lobbying of the taxi industry against the seemingly lack of regulation for UberX in an excessively regulated industry.  This article follows UberX’s rise to popularity and its fight with regulators to continue its operations in Australia.

Application of concepts

This article relates to the political and regulatory environment brought about by excessive regulation of the taxi industry. Highlighted in the article, the taxi industry is notoriously over-regulated in the world, and in Australia (Abelson 2010, p.41). This over-regulation presents itself as a government failure (Weidenbaum 2004) as regulations became protectionist of the taxi industry, creating a monopoly before the reform in 2012.

After the reform, the government can be seen as an enabler by encouraging competition through cheaper licensing by lowering the price from $500,000 each to $22,000. Hire-cars, seen as the closest taxi service to UberX, are required to pay a $40,000 license fee. However, UberX is exempt from this fee and requires no endorsement from the Taxi Services Commission. This is poor institutional capacity that is reflected from the inability to enforce rule of law (Robson 2015, p. 13) on UberX. Nonetheless, another government institution, the Australian Tax Office has been successful in enforcing it on UberX after declaring their drivers as taxi drivers, and subsequently applying government functions such as taxes and industry policy to report on their income (Robson 2015, p.34).

The ruling has explicated UberX’s political helplessness (Robson 2015, p. 22) against the influence of the government as they were forced to ‘increase fares by 10 percent to make up for lost income’ from the ruling, which was highly influenced by the taxi lobby and its representative bodies (Khadem 2015).

Analysis

UberX’s future in Australia relies heavily on their ability to overcome the regulatory capture by the Australian Taxi Industry Association and related representative groups. UberX’s prospects are bleak as UberX drivers being charged for operating illegally (Menagh 2015) and the government warning ‘of a campaign to come’ (Saulwick and Snow 2015), rendering the government as a threat. The chairman of major taxi network company, Cabcharge, was an ex-premier of the state of NSW and in 2009, secretary of the then Minister of Transport means that there are powerful connections to government officials, a key factor in lobbying success (Mahoney 2007), and in this case, against UberX’s operations.