Perth's taxi industry lacks competition and innovation and has failed to lead on important issues such as fare evasion and double booking, say WA transport authorities.
In their submission to the Economic Regulation Authority's inquiry into microeconomic reform in WA, the Department of Transport, the Public Transport Authority and Main Roads said new rules and regulations were needed to make taxis more competitive.
This was particularly important in the face of new technologies.
The submission says current regulations limit innovation and competition and so the sector lacked natural incentives for taxi owners to align their business model to changing consumer expectations.
"More critically, the sector has failed to address key business risks that other sectors are expected to address without government intervention," it says.
These risks included security and identity management, managing credit risks, marketing and promoting the sector and expanding taxi services.
The submission said the assumption that current regulations limited the ability of taxis to match peaks in demand was "an insufficient explanation". "Peak demand for taxis strongly correlates with areas and times where antisocial behaviour is highest," it said.
Taxi drivers did not just consider revenue and available fares when choosing when to work. They also looked at potential vehicle damage and personal risk of injury.
The paper said new technology could create competition from other on-demand transport.
GPS and mapping technology enabled accurate calculation of the cost of a journey beforehand.
And emerging smartphone apps could significantly erode the importance of rank and hail pick-ups.
Taxi Council chairman Kevin Foley disputed many of the claims.
He said there was a lot of competition in the industry, with each of Perth's 2300 drivers competing for fares and with charter vehicles.
"It is also wrong to say the industry has lacked innovation," he said. "We have a new phone app that is a world leader and have new technology to counter double booking."