Cabcharge

The Cabcharge account payment system was established in 1976 to provide taxi passengers a way to pay for taxi fares by non-cash means. The payment system is owned and operated by Cabcharge Australia Ltd, an ASX listed public company.

The Cabcharge system has several aspects:

Though called a service fee by Cabcharge, to the general public and government authorities it is commonly referred to as a surcharge, and has given rise to controversy, litigation and government legislative intervention.

Cabcharge Australia's commercial activities have been controversial at times and the company has faced regular accusations of excessive charging or profiteering and predatory and anti-competitive practices. The company was recently subject to adverse court proceedings and a major settlement arising from these behaviours.

The company used to impose a surcharge of 10% on taxi fares for the use of its payment system, but justifies the surcharge on the basis that it incurs the costs associated with transactions including card and other product production, in-taxi processing, administration, fraud protection and investigation, provision of statements and driver education. The surcharge has been controversial and has been found to be excessive and predatory, and Victoria and New South Wales have by law restricted the surcharge to 5%.

Cabcharge Australia was the subject of Federal Court proceedings in 2010 over alleged anti-competitive practices including predatory pricing activities. The company was fined heavily and forced to pay a record high $15 million settlement for these behaviours. The company is also facing accusations of profiteering for the 10% surcharge it imposes on taxi fares paid by a payment card and the matter is currently being investigated by the Reserve Bank of Australia. The surcharge has been reduced by law to 5% in Victoria following recommendations made by the Taxi Industry Inquiry and a further review of the surcharge in that State may lead to the figure being set at well below 5%. In December 2014 the surcharge was also reduced to 5% in New South Wales.

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Wikipedia