Tuesday, August 21, 2007


1. Introduction:A Brief Historical Overview in the Development of a Cultureof `Lawlessness and Corruption in the NSW Taxi Industry.

Throughout this document reference will be made to the "NSW Taxi Industry" wherein matters addressed refer specifically to the Sydney taxi fleet. The use of the term "NSW" here is in recognition that the Sydney fleet is governed by the Legislature, Ministers and Cabinet of the State of New South Wales. The Sydney fleet is also subject to the industrial court determinations that apply within the state jurisdiction. Hence there is no specific attempt to address the problems that beset taxi drivers or owners in geographical areas outside the greater metropolitan region of Sydney.

Part of the political culture and folklore of Sydney is that everyone "knows a cabbie" and hence is "an expert on the taxi industry". Amongst the professional class there are many who worked part-time or on week-ends to get themselves through their accountancy or engineering degrees. Others have relied on the industry as "a second job". Hence there is the general perception that the itinerant nature of the industry means that drivers are prepared to suffer lackof industrial representation, lack of enforcement of award conditions, etc. because "it's the nature of the job". You put in thehours, earn a quid and get out. Similarly, owner-drivers have developed a certain "maverick" image derived from dealing with allsorts of people in the community. They have cultivated a certain care-free attitude, a distaste for bureaucracy and a toleration of the low return on their investment because they like the job.

Over a long period of time the "cash-in-hand" system allowed owners and drivers alike to "rob Peter to pay Paul" and delude themselves that the personal freedom offered by the "laissez-faire"-faire"nature of their industry's regulatory infrastructure more than compensated for the long hours, drunken passengers, unsafe working conditions and lack of entitlements that the "nine-to-fivers"enjoyed. While this cultural aspect to the job has continued to flourish over the past two decades the ability of taxi drivers to "earn a decent living" with "minimum interference" has not. Legislative changes have occurred which benefit a tiny minority within the industry. This minority, trading on the pre-existing culture of the industry has now manoeuvred the whole industry into a state of play where all the other players in the game are pre-ordained losers. The influence of this minority has grown into an oligarchy with inter-connecting threads in the political, trade union, media, legal, bureaucratic arenas. The result is a system approaching nepotism and favouritism that threatens the stability and quality of the industry.

The first judicial mention of "lawless bailors/taxi operators" goes back to a decision of Justice Edwards in 1940. The unresolved problem was restated by the Full Bench of the Industrial Commission in 1968.The problem began to escalate in the 1970s and early 1980s with the removal of the Seniority system for the allocation of new taxi plateleases and the expedient increase of the number of vehicles on the road beyond the customer demand or services of those vehicles. The latter development created not only excess capacity but undermined the stability of the sole proprietor as the lynch-pin in the system. A system that had as its axiom "the owner will look after his bailee driver because he is a driver too". The arrangement was invariably the owner performing the day shift with a regular non-casual night driver. A close bond existed between the two through a system oftrust (which the owner invariably exploited even then).

The system was then compounded by the deregulation surrounding taxi ownership which shifted the balance of power and numerical strength within the industry away from the single owner operator/bailee normin favour of the more corporatist fleet management/entrepreneurial ownership regime that is now in place. The final lynch-pins in this `brave new world' was the full corporatisation of the Taxi Co-operatives which drastically shifted any residual decision-making and economic power of the single owner operator out of their hands and into the clutches of the Board of Directors of the Cooperatives.Through sleight of hand and clever but questionable legal manoeuvres these Board of Directors were now in full control.

The Board of Directors were originally elected by the majority ofdrivers within the industry through owner operator attended AGMs. Thenew style Board of Directors were only responsible to a minority oftaxi owners who were "shareholders" within restructured co-operatives which bore little legal semblance to the original organisations. Yet the disenfranchised majority of owner operators were still tied to their "Cooperatives" by government legislation that coerced them to remain financial contributors to organisations that they had no realsay in running. This is the current situation in NSW.

Naturally a lot of owner operators voted with their feet and puttheir lease plates on the market. Under the deregulated ownershiprules (owners no longer required to drive their vehicles for aliving) the "big fish" in the industry further consolidated their power by either purchasing these newly available licence plates or by encouraging the new (non-industry) owners to take advantage of the economies of scale of fleet management and place their "asset" underthe fleet management control of the power brokers. The industry was moving closer to monopolisation at this stage with the Boards of Directors of the major Cooperatives being able to use inside knowledge of the taxi industry to both increase the percentage of taxi plates on the road under their direct control and extend their influence over government policy through the creation of the "TaxiCouncil" as the major advisory body to government.

Technological change in the 1980s (computer assisted dispatch system) and 1990s (computer assisted telephone booking system) saw the demiseof the two way radio dispatch system. The Taxis Combined radio network emerged as the dominant player within the industry. It now has seven of the eleven taxi networks directly hooked into their computer assisted dispatch and booking system. As a result theworking records of the majority of Sydney drivers are entered intoand continually updated on their private data bases. All drivers must now have their authority cards authorised through the networks. This system ties them, like the single taxi owner operator into a form of conscripted loyalty to their radio network. (A small group of smarter drivers used mobile phones and pagers in an attempt to break out of this conscription and emerged as the first of many "executive fleets"in the `divided & ruled' world of the taxi driver).

The Beattie Report of the late 1960s stated, after extensive investigation, that there should be no fixed pay-in system at all. The taxi owners responded with the Lake Agreement, (Lake was the nameof the President of the TIA before current incumbent Reg Kermode).This agreement was an unregistered document whereby the bailees were offered a choice between percentage pay ins and fixed pay-ins. Owners enticed bailee drivers into accepting the fixed pay-in system as the norm by offering low pay-ins at the time of introduction. As the older drivers, working on the percentage system, retired or left the industry throughout the 1970s the fixed pay-in system emerged as the dominant method of bailment. New drivers were seldom informed of the percentage pay-in option. Those that were informed were scared away from exercising this option by owners who warned them they would be incurring a heavier (and more easily detected) taxation liability.The reality was the owners were the major tax dodgers in the industry. Now they wanted to increase their income further by avoiding the responsibility of guaranteeing a basic income to their bailees.

Under the leadership of Mr. E. McBeaty the Transport Workers Union lodged a claim for taxi drivers before the industrial court inDecember 1979 [V-13] which included a Clause (8) entitled "Guarantied Earnings" whereby the driver would be guaranteed a minimum return for each shift worked. It also included a log of claims for improved sickleave, annual leave, long service and public holiday entitlements, as well as receipts for any payments made to the bailor. The Taxi Industry Association (TIA) stalled and resisted all these claims andargued for the legal entrenchment of a fixed pay-in system before they would negotiate.

Following the death of Mr McBeatty (by misadventure), the incoming Secretary of the TWU, Mr. H. Quinn, instructed the union's legal teamto break the stalemate and reach an agreement with the TIA. This occurred soon after when the TWU consented to the TIA demands for a fixed pay-in system and the erosion of other legal entitlements of the bailees. Under this consented arrangement bailors were no longer required to issue receipts to bailee drivers. Bailee driver claims to other entitlements were made unenforceable. For example, under Clauses 1 & 10 of this consented arrangement bailee's bailment could be terminated without notice or reason. Thus if a driver reached 219 shifts in a calender year he could be sacked without notice and deprived of four weeks annual leave which immediately accumulated after 220 shifts. The net effect was to remove all obligations from owners in regards to annual leave, and, ipso facto, any other obligations.

The official entrenchment of the fixed pay-in system occurred inearly 1984 with the new Taxi Industry (Contract Drivers) Contract Determination 1984 (known as `The Determination"). This "Determination" ensured the owners a guaranteed income every shift but put the onus on the drivers to raise their own incomes after they had first achieved the owners guaranteed income each shift. The implications of this Determination are obvious. Drivers would be compelled to remain on the road for longer hours to reach the same level of income as they had previously earned. Before long, the ("minimum") nine hour shifts became in practice 10 hour shifts, and with additional taxi plates released by the government, 10 hour shifts became 12 hour shifts. Today, the 12 hour night shift, (with no statutory meal break) is the norm. "Semi-double" or 24 hour shifts are also a common practice in the industry.

The machinations leading up the acceptance of the "Determination" in 1984 are documented in the T.I.S.A. submission to the Hylda RolfeCommission (1993) (See V14). In short, the TWU's cave-in to the TIA demands became the "Determination" when it was rubber-stamped by the Industrial Commission soon after their consensual arrangement. This occurred despite the consented arrangement being contrary to the procedures laid down under the Industrial Arbitration Act 1940 to1968 giving jurisdiction to the Commission to grant pay-ins only as apercentage of metered takings.

The recently strengthened optional system (where drivers had a choice between the percentage based OR fixed pay-in systems), known as the Interim Determination 1997, has been a total failure owing to widespread intimidation of drivers, government and union neglect and the corrupt failure of the bureaucracy to enforce the law. In short,drivers cannot choose to elect to return to the metered pay-in systemwhile they are still shackled to the Contract Determination which ensures the owner retains the power of instant dismissal. Out of over 20,000 drivers currently in the industry only two are known to beworking under the metered pay-in system without facing owner retribution.

Source: Sydney Taxi Corruption

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