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Excessive Entry Test - Metropolitan & Urban taxis

The 'Excessive Entry Test' refers to powers given to the TSC from 30 June 2014 under Section 143AA of the Transport (Compliance and Miscellaneous) Act 1983 (the Act). The Act gives the TSC power to temporarily suspend the granting of new taxi licence applications in the Melbourne Metropolitan (Metropolitan) or Urban and Large Regional (Urban) taxi zones for up to 12 months. For this power to be exercised the Act requires the TSC to be satisfied that granting additional taxi licences in these zones would have significant negative impacts on both existing and future consumers.

The TSC monitors a range of taxi industry statistics to inform whether or not to exercise this power. In its considerations the TSC is mindful of the overall intent of taxi reform, which is to move the industry away from protection and restrictive regulation to one that is characterised by greater competition and self-regulation for the benefit of consumers. Accordingly, the TSC's policy is that new entry to the taxi industry should be governed by market forces to the maximum extent possible, and that new entry can be expected to deliver benefits to consumers through improved taxi availability and scope for competition.

The TSC would only consider temporarily suspending the granting of new taxi licences in exceptional circumstances. Such exceptional circumstances would include where it can be clearly and compellingly demonstrated that consumers are made significantly worse off as a direct result of very high taxi supply, and that competitive market forces will be unable to correct this in the long term. The TSC considers that this scenario is highly unlikely to eventuate.

For transparency and market certainty the TSC publishes on a monthly basis its most recent decision on whether or not to exercise market entry restriction powers.

Decision as at August 2015

The TSC will continue to grant new taxi licence applications in the Metropolitan or Urban taxi zones as there is no evidence available to suggest that restricting market entry would be in the interest of consumers.