Queensland Taxi Licence Values Plummet

The value of taxi licences in Queensland has experienced a catastrophic decline, a stark reality for many owners who once viewed them as a secure retirement plan. This significant devaluation is primarily attributed to the disruptive impact of ride-sharing services and the unprecedented challenges brought about by the COVID-19 pandemic. Once a coveted asset, the market for taxi licences has shifted dramatically, leaving many owners in a distressing financial situation.

The Steep Decline in Licence Values

The figures paint a grim picture. In 2014, a standard Queensland taxi licence could command prices as high as $500,000. However, recent sales tell a different story. In February 2021, a standard Brisbane taxi licence sold for a mere $16,541, a fraction of its former value. This represents a staggering drop, with prices hitting their lowest point in over a decade. The situation is equally dire for limousine licences, with many changing hands for as little as $1,000 in 2020, a far cry from the average of $68,409 recorded in 2014.

The Impact of Ride-Sharing and COVID-19

The introduction of ride-sharing platforms like Uber, Ola, and DiDi into the Queensland market, beginning with Uber's arrival in Brisbane in 2014 and its legalisation in 2016, marked the beginning of a challenging era for the traditional taxi industry. Blair Davies, Chief Executive of the Taxi Council of Queensland, explains that the industry was first hit by the legalisation of ride-sharing and then further devastated by the COVID-19 pandemic. “Gathering restrictions, stay at home orders, border closures – that very much impacted the demand for taxis,” he stated, noting that demand in 2020 plummeted by as much as 80% at certain points.

The pandemic's impact was widespread, forcing many businesses to adapt or face severe consequences. Jacqui Shephard, Chairwoman of the Limousine Action Group Queensland, highlighted how COVID-19 "decimated the industry," with many drivers kept on through government support schemes like JobKeeper. The cessation of international travel and the shift towards working from home meant a significant reduction in the need for traditional taxi and limousine services. "The industry is really struggling and they’re predominantly small business owners," she added.

Market Dynamics and Seller Hesitation

The current market for taxi licences is characterised by a significant imbalance between buyers and sellers. Buyers are offering substantially lower prices, which many sellers are unwilling to accept, hoping for a future recovery in values. Furthermore, banks have become reluctant to provide finance for these assets, creating a "double whammy" for licence owners. As Mr. Davies explained, "Anyone looking to sell their taxi licences at the moment is probably not going to get a very high price for it. And the reason for that is, buyers know they can get a bargain if they can and buyers can’t get finance from banks, so there’s a double whammy there for people that own licenses, they’re almost obliged to hold onto their licenses at the moment and it’s a distressing thing for some."

The number of licences changing hands has also drastically reduced, falling from 69 in 2013 to just 14 in 2020. This decline indicates that many owners have “given up trying to offload what was once their treasured retirement plan.” Some sales at extremely low prices, even zero dollars, are often the result of transfers between family members or within trust structures and have been excluded from market analyses.

Government Support and Industry Response

The Queensland government has acknowledged the crisis facing the taxi and limousine industries and has implemented several support measures. In 2016, a $100 million industry adjustment assistance package was introduced, including payments of $20,000 per licence for eligible owners. More recently, in April 2020, the government announced a $54.5 million transport industry package, which involved waiving fees and extending licences for six months. An additional $23 million package was rolled out in June 2020 to further support the sector.

Despite these measures, the sentiment within the industry remains one of significant concern. Paul Scaini, CEO of the Queensland Taxi Licence Owners Association, points to the sheer volume of vehicles now operating in Brisbane due to ride-sharing services. "The problem lies in the fact that we now have 20,000 vehicles in Brisbane, doing the job of what used to be done by 3,000 and the framework that underpins Queensland’s personal transportation industry not allowing for viability."

Legal Challenges and Future Outlook

The distress experienced by licence holders has led to significant legal action. In 2020, the federal member for Kennedy, Bob Katter, vowed to take the compensation claim of over 1,300 taxi licence holders against the Queensland government to the High Court. Furthermore, Maurice Blackburn Lawyers has filed a class action against Uber in multiple Australian states, including Queensland, New South Wales, Victoria, and Western Australia, alleging damages suffered by taxi licence owners.

While the current situation is bleak, there are glimmers of hope. Mr. Davies believes that the industry will see an improvement in 2021, with the reopening of airports leading to increased travel and a return of businesspeople to their offices. "It’s like they [licence values] went over a cliff when the government changed that regulatory environment and it will be a long, slow climb back up to more reasonable values, we believe," he commented.

Key Takeaways

Frequently Asked Questions

Q1: How much is a taxi licence worth in Queensland now?
As of early 2021, a standard Brisbane taxi licence was selling for around $16,541, a significant decrease from previous years.

Q2: What caused the drop in taxi licence values?
The primary reasons are the increased competition from ride-sharing services and the severe impact of the COVID-19 pandemic on travel demand.

Q3: Has the government offered any compensation to taxi licence owners?
Yes, the Queensland government has provided industry adjustment assistance packages and other forms of support, though many owners feel it is insufficient.

Q4: Are taxi licence values expected to recover?
Industry representatives believe there will be a slow recovery as travel patterns normalise, but the market has fundamentally changed.

Q5: What legal action is being taken by taxi licence holders?
Several class actions have been filed against ride-sharing companies, and some licence holders are pursuing claims against the government in higher courts.

The future of taxi licence values in Queensland remains uncertain, but the current landscape is a testament to the profound disruption caused by technological innovation and global events. Owners are navigating a difficult period, hoping for a return to stability and a more favourable market in the years to come.