Driver Agreement FAQs

The Dispute Resolution Team has been in operation for 12 months. In this time, the team have dealt with almost 200 disputes between operators and drivers.

The majority of these matters related to a dispute over bond payments and the 55/45 pay split.

Many of these disputes could have been resolved quickly and easily if both parties communicated in the first instance.

Below are some frequently asked questions and answers. Please consider the responses to these questions before contacting the Dispute Resolution Team.

What is a Driver Agreement?

A Driver agreement is any agreement where the operator of a taxi allows a driver to operate the taxi-cab. 

Implied conditions automatically apply to all driver agreements, whether the agreement is in writing or not.  Driver agreements can include terms in addition to the implied conditions, as long as those terms are not inconsistent with the implied conditions. 

What are implied conditions?

Implied conditions set out a very specific set of requirements for taxi drivers and operators. Implied conditions have been made under legislation, therefore they are lawful. The implied conditions are intended to improve all drivers' working conditions.

Who do the driver agreement and implied conditions apply too?

Where the operator of a taxi  engages a driver to drive the taxi,  the driver agreement and implied conditions apply to both the operator and the driver.  

Do driver agreements need to be in writing?

Yes, operators are required under the Transport (Taxi-cab Industry Accreditation) Regulations 2007 to keep a written record of all driver agreements. However, even if there is no written agreement in place, the implied conditions will still apply and the parties will be required to comply with them.

What is a bond?

A bond is an amount of money up to $1,000 that the operator can request from the driver which must be held in a designated bank account.

The implied conditions specify that the operator can only take money from the bond if:

  • the driver takes the fare box and does not split the fares 55/45 with the operator; or
  • the vehicle or any equipment in the taxi is damaged by the driver's conduct.

Before the operator can take any money from the bond, they must notify the driver in writing stating the amount the operator intends to take from the bond and a description of the loss, and provide evidence of the loss.

When the driver agreement ends, the operator must return the bond money to the driver within 14 days.

EXAMPLE 1:

The driver has paid the operator a bond of $1000. The driver crashed the taxi and admits that he caused the accident. The operator pays the insurance excess. The operator then has the taxi assessed for damage and a written quote is given to the driver to pay for the damage.

Scenario 1 – The assessment comes back as $400 damage to the taxi. The operator writes to the driver letting him know that he intends to take $400 out of the driver's bond to pay for the damage the driver has caused to the taxi. The operator also gives a copy of the assessment report to the driver. The driver approves and  pays $400 back into the bond a lump sum or by incremental payments, as agreed with the operator.

Scenario 2 – The assessment comes back as $3000 damage to the taxi. The operator writes to the driver letting him know that he intends to take $1000 out of the driver's bond to pay for the damage the driver has caused to the taxi. The operator also gives a copy of the assessment report to the driver. The driver approves and  pays $1000 back into the bond a lump sum or by incremental payments, as agreed with the operator.

Scenario 3 – There is $0 damage to the taxi. The operator cannot take any money from the driver's bond.

EXAMPLE 2:

The operator and driver have agreed that the driver will pay $10 per shift until the bond reaches $1000. To date, the operator has collected $300 towards the bond. The driver causes an accident and the operator pays the insurance excess. The operator then has the taxi assessed for damage and a written quote is given to the driver.

Scenario 1 – The assessment comes back as $600 damage to the taxi. The operator writes to the driver letting him know that he intends to take the full $300 out of the driver's bond to pay for the damage the driver has caused to the taxi.  The driver continues to pay $10 per shift towards the bond. The operator cannot demand any further money from the driver to repair the taxi.

Scenario 2 – The assessment comes back as $3000 damage to the taxi. The operator writes to the driver letting him know that he intends to take the full $300 out of the driver's bond to pay for the damage the driver has caused to the taxi. The driver continues to pay $10 per shift towards the bond. The operator cannot demand any further money from the driver to repair the taxi.

Scenario 3 – There is $0 damage to the taxi. The operator cannot take any money from the driver's bond.

Conclusion:

If you have a dispute under your driver agreement, you must first meet with your driver or operator within seven days to try and resolve the matter.

Where the parties are not able to resolve the matter, you may lodge a dispute with the Dispute Resolution Team. The dispute resolution process will be followed in a timely, accurate and non-discriminating manner. You can contact the Dispute Resolution team on 1800 638 802 to make an enquiry and disputes can be lodged via the feedback form on the TSC website.

Please note that drivers and operators must have their dispute reviewed by the TSC before going to the Office of the Victorian Small Business Commissioner (VSBC) or the Victorian Civil and Administrative Tribunal (VCAT).

Are all drivers required to receive a 55% split of the total fare box?

Yes. The operator must pay the driver a minimum of 55% of the total fare box. This is referred to as the "55/45 split".   

This is a mandatory requirement under the implied conditions contained in the Transport (Compliance and Miscellaneous) Act 1983 (Vic).

Under the implied conditions, the 55/45 split must include all fees and surcharges earned during the shift. For example, the operator is required to split any booking fee, high occupancy fee, late night and holiday surcharge with the driver. However, Citylink or Eastlink tolls, non-cash payment surcharges and any fees charged by Melbourne Airport are not to be included in the 55/45 split.

Is a set price agreement allowed?

No. Set price agreements are unlawful because they do not meet the obligations of the implied conditions contained in the Transport (Compliance and Miscellaneous) Act 1983 (Vic). For example, some implied conditions that would not be met under a set price agreement include the condition that:

  • the driver must keep at least 55% of the gross fares earned during a shift; and
  • the operator must pay all maintenance costs associated with the vehicle, including fuel.

Even if a operator or driver asks or agrees to enter into a set price agreement, you must not enter into one. Being party to set price agreements could subject operators to compliance action, including infringements and prosecution, by the TSC.

Remember, all operators and operators must enter into a driver agreement containing all of the implied conditions contained in the Transport (Compliance and Miscellaneous) Act 1983 (Vic).

Are drivers required to pay for fuel or maintenance as part of a set price arrangement?

Drivers are not required to pay fuel under a set price arrangement. Under the implied conditions, the operator must pay for all maintenance and up keep of the taxi. This includes fuel, tyres, repairs, cleaning etc. The operator may specify where maintenance, for example, repairs, is to be carried out.

How does a driver or operator prove that each party receives the correct share of the fare box?

The operator must provide the driver with, at a minimum, a monthly summary of the money the driver has earned and been paid, including surcharges.

Does the operator need to provide insurance for the driver?

Yes, the operator is required to have a policy in place providing cover for the driver of at least $5 million for third party property damage

Do drivers have to pay the excess for accidents?

No. It is the operator's responsibility to pay any excess on an insurance claim. This is a mandatory requirement in the implied conditions contained in the Transport (Compliance and Miscellaneous) Act 1983 (Vic).

If the operator has collected a bond from the driver and damage to the taxi is caused by the driver's conduct, the operator may use the bond to pay for repairs, but cannot take more from the bond than the amount of the damage. The bond cannot to be used to pay for damage to a third party's vehicle or property, and cannot be used in cases of an animal strike e.g. kangaroo.

Remember that if you intend to take money from the bond, the implied conditions require the operator to first notify the driver in writing stating the amount the operator intends to take from the bond and a description of the loss, and provide evidence of the loss.

Can drivers take unpaid leave and keep their arrangement with the operator?

Drivers who work for the same operator for a minimum of three shifts a week for 12 months or more are entitled to take a maximum of four weeks unpaid leave.

Can a driver agreement be terminated? How do I do this?  

Yes. Either party has the right to terminate the agreement by giving two weeks written notice to the other party, or immediately with written notice if there has been a breach by the other party.

What if the implied conditions are breached?

For any disputes arising in relation to a driver agreement, the parties are required under the implied conditions to meet within seven days, or longer period agreed between the parties, to try and resolve the matter between themselves.

Where the parties are not able to resolve the matter, the dispute resolution process will be followed in a timely, accurate and non-discriminating manner.

Drivers and operators must have their dispute reviewed by the TSC before going to the Office of the Victorian Small Business Commissioner (VSBC) or the Victorian Civil and Administrative Tribunal (VCAT).

  1. Parties may only refer their dispute to the VSBC if they have been unable to resolve the dispute with preliminary assistance from the TSC, and the TSC has issued a certificate allowing one or both parties to refer the dispute to the VSBC.
  2. Parties may only refer their dispute to VCAT if:

a) The TSC has issued a certificate stating that it considers that the dispute is unlikely to be resolved with the assistance of the VSBC; or

b) The parties have referred the matter to the VSBC, the dispute is still not resolved through the alternate dispute resolution process of the VSBC and the VSBC has issued a certificate under section 162PA of the Act.

The dispute resolution process aims to extend the chain of responsibility to industry participants and encourage all parties to communicate and resolve issues themselves in the first instance.