Rules making taxi fares higher

WA's taxi industry has been so tightly bound in regulation in recent years that fares have risen unnecessarily.

A review by former Australian Competition and Consumer Commission chairman Allan Fels and Monash University economist David Cousins has recommended the partial deregulation of the industry and removing restrictions on the number of licences issued.

The restrictions, described yesterday by Professor Cousins as a "public policy scandal", meant taxi fares were 16 per cent higher than they should be - an extra $3.30 for an average taxi journey fare.

"Restrictions on licence numbers have allowed fares to be set at higher levels than otherwise," the RAC-commissioned review said.

"Licences have acquired substantial value, around $290,000 currently, for conventional licences."

The review recommended government taxi plates be leased at a reduced fee of $10,000 a year - down from $13,390.

This in turn would reduce the rates for privately owned plates.

The value of private plates would fall from $290,000 to about $150,000.

But the review said "there is no need to consider a compulsory buyback of licences".

Instead, the Government could consider a voluntary buyback arrangement, it said.