Aussies love tech, so much so that when new apps and services enter the marketplace, it can be hard for our reactive legal system to keep up. That’s what we’ve seen with the entry of companies like Uber into the country, as State Governments and taxi lobbies try to squash it before it takes root. A new review into competition policy says that our legal competition framework just can’t keep up the Ubers of the world, and change is needed if Australia wants to be a forward-thinking economy.
The observation comes from within the Federal Government’s root-and-branch review into Australia’s competition law released yesterday.
Among other things, the Review found that Australia isn’t as ready for technological change as it might like to think. When new players like Uber enter the market, Australians take to using them non-stop, disrupting the local market to a large degree.
As the Review states, “reform of taxi regulation in most jurisdictions is long overdue”:
Australians eagerly embrace new ideas when they offer us something of value, and this includes innovations from new players entering markets like never before.
Our existing laws and institutions often struggle to keep pace. Sometimes this is the inevitable consequence of an unanticipated shock, but it can also be because existing laws and policies have rightly or wrongly instituted some form of preferment to incumbent market participants.
New entry is a positive discipline on existing market players, encouraging them to be more innovative and responsive to consumer needs. By contrast, locking in long-term preferment risks Australia falling behind other countries, as potential new approaches and innovations pass us by.
Our competition policy, laws and institutions need to be sufficiently adaptable to allow new entry to make innovative and potentially lower-cost products and services available to Australian consumers. Uber ridesharing services…is an example of a new player introducing new technology and a novel concept that challenges existing regulatory frameworks.
A competition policy that is fit for purpose must strike a balance between the long-term benefits to consumers of allowing new entrants to establish themselves in a market and protecting the public interest against dishonest or dangerous practices.
The problem here is that taxi and transport laws are a State Government issue, meaning the Federal Government — to whom this review is aimed — can’t really force regulatory change in the matter. Basically, it’s a just advice on getting with the times that State Governments can ignore if they want to. And considering that taxi licenses bring in hundreds of thousands of dollars each year, ignorance is what we’ll get for the time being.
Some state governments like New South Wales are looking to formalise app-based transport apps like Uber and GoCatch with new legislation that mandates minimum safety requirements, but ride-sharing services like Uber’s UberX tier are still regarded as outside the law, as the review states.
You can read the full Competition Review right here.