A2B Australia

A2B Australia (formerly Cabcharge Australia) (ASX: A2B) is an Australian public company which was listed on the Australian Securities Exchange in December 1999 and is an ASX 200 company. The company was founded by Reg Kermode.[1] In 1976, the company established Cabcharge, an account payment system to provide a way to pay for taxi fares by non-cash means, which today is the sole provider of the in-taxi service.

A2B Australia Limited
TypePublic company
ASX: A2B
IndustryLand transport
Founded1976
FounderReg Kermode
Headquarters
Sydney
,
Australia
Key people
ProductsTransport-related services in Australia, the United Kingdom & Europe
RevenueDecrease A$170.9 million (2020)
Decrease -A$23.7 million (2020)
Websitewww.a2baustralia.com

Subsidiaries of A2B operate booking and dispatch services for taxis in Australia under the Taxi Networks and 13cabs brands, which today covers over 7,000 taxis. In 2014, there were 21,344 taxis in Australia.[2]

The company's activities have sometimes been controversial and it has faced strong criticism at times from inquiries and regulatory bodies, especially over its Cabcharge taxi payment system. The company was the subject of Federal Court proceedings in 2010 over alleged anti-competitive practices including predatory pricing activities. It was heavily fined and paid a record high $15 million settlement for these behaviours.[3] 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 was investigated by the Reserve Bank of Australia.[4] 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%.[5] In December 2014 the surcharge was also reduced to 5% in New South Wales. As at November 2018, it operated 9.963 taxis.[6]

History
Former Cabcharge logo

The Cabcharge taxi payment system was established in 1976 to provide an alternative payment system to cash in the taxi industry.[1]

In January 2002, Cabcharge acquired Combined Communications Network to provide taxi booking and dispatch services in Sydney. Today, it provides taxi booking and dispatch services through Taxi Networks in New South Wales (Combined Communications Network[7]) and 13cabs in Victoria.[8] Today, over 7,000 taxis operate on Cabcharge booking and dispatch networks in Sydney, Melbourne, Adelaide and Newcastle.[9]

In March 2003 it acquired Black Cabs, Melbourne's second largest taxi company, to be followed by Newcastle Taxis and Melbourne's Arrow Taxis.

In 2001, Cabcharge formed a joint venture with Singapore-based DelGro Corporation (now ComfortDelGro) to form CityFleet Networks in the United Kingdom, in which Cabcharge held a 49% interest.[10][11] In 2005, Cabcharge formed another joint venture company with ComfortDelGro to form ComfortDelGro Cabcharge (CDC) in Australia, in which Cabcharge held a 49% interest. CDC purchased Hillsbus and Westbus and later Blue Ribbon. In 2009, CDC purchased the Kefford Corporation in Victoria, and expanded by acquiring other bus operations. In February 2017, Cabcharge sold its shareholding to ComfortDelGro.[12][13]

In 2008, Cabcharge established EFT Solutions which develops payment system software for other clients, including major banks and retailers, as well as for the Cabcharge system.

In October 2018, it was announced the business would be rebranded as A2B Australia.[14] The motion to change the name change was passed by the shareholders at the company's annual general meeting in November 2018.[6]

Outline

A2B Australia's principal activities include:

  • provision of charge account facilities for businesses and individuals to enable non-cash payment of taxi fares.
  • development of a point-of-sale system that allows taxi users to pay their fare using third party charge, credit and debit cards and Cabcharge products. The system requires passengers to pay a 10% surcharge on their fare although the surcharge is currently being reviewed by the Reserve Bank of Australia following public comments and complaints that the surcharge is excessive.[4] The surcharge has been limited in New South Wales and Victoria to 5%.
  • software development.
  • provision of taxi booking and dispatch services. Additional capture of taxi owners, operators and drivers is practised through provision of services including repairs and installation of in-vehicle equipment, insurance, vehicle leasing and training.
  • development of taxi-related hardware and software like taxi security camera systems, meters, and transaction processing equipment.

Federal Court action by ACCC
Main article: ACCC v Cabcharge Australia Ltd

In June 2009, the Australian Competition & Consumer Commission (ACCC) began proceedings in the Federal Court of Australia against Cabcharge alleging that Cabcharge had breached the Trade Practices Act (TPA) by misusing its market power and entering into an agreement to substantially lessen competition. The action centered on Cabcharge's conduct in refusing to deal with competing suppliers to allow Cabcharge payments to be processed through EFTPOS terminals provided by rival companies and supplying taxi meters and fare updates at below actual cost or at no cost.[15]

On 24 September 2010, Cabcharge admitted to three contraventions of the TPA to settle the proceedings. The Federal Court approved the settlement, and declared that Cabcharge had breached the TPA by taking advantage of its substantial degree of power in the Australian markets for the supply of services to enable non-cash payments for taxi fares and charges by taxi passengers and non-cash instruments that could be used only for the payment of taxi fares and charges. The Court imposed the highest ever penalty for misuse of market power, imposing a fine of $15 million ($14 million in civil penalties and $1 million in costs).[15]

Sydney Morning Herald allegations

Cabcharge's former CEO Reg Kermode was the subject of a sustained campaign of criticism by Sydney Morning Herald journalist Linton Besser. Besser calls Kermode, "The Taxi Tsar".[16] Besser claims that Cabcharge and Reg Kermode "...along with the industry's other big players, continues to benefit from millions of dollars worth of free taxi plates issued to it by successive governments..." as a result of political and bureaucratic connections and favouritism stretching over a generation.[17][18][19]

See also

References
  1. Cabcharge - History
  2. ATIA, State & Territory Taxi Statistics as at December 2014
  3. See the findings and observations of the Federal Court of Australia in ACCC v Cabcharge Australia Ltd [2010] FCA 731; ACCC v Cabcharge Australia Ltd (No 2) [2010] FCA 837.
  4. "Reserve moves to tackle card fee", Peter Martin, The Age, 21 March 2012.
  5. Transport Legislation Amendment (Foundation Taxi and Hire Car Reforms) Act 2013 - see http://www.legislation.vic.gov.au.
  6. Cabcharge takes old taxis off the road to help fight against Uber Australian Financial Review 22 November 2018
  7. Combined Communications Network
  8. 13cabs
  9. "Annual Report 2015". Archived from the original on 20 December 2016. Retrieved 22 July 2016.
  10. "Company Overview of CityFleet Networks Limited". Bloomberg News. Retrieved 10 August 2018.
  11. "Annual Report 2001". Cabcharge. Archived from the original on 13 March 2018. Retrieved 10 August 2018.
  12. Acquisition of Shares in ComfortDelGro Cabcharge Pty Ltd Archived 6 January 2017 at the Wayback Machine ComfortDelGro 21 December 2016
  13. Cabcharge departs Aust bus market Special Broadcasting Service 21 December 2016
  14. Taxi payments group Cabcharge dumping name to drive off as A2B Australia Australian Financial Review 21 October 2018
  15. ACCC v Cabcharge Australia Ltd [2010] FCA 731, Federal Court (Australia); ACCC v Cabcharge Australia Ltd (No 2) [2010] FCA 837, Federal Court (Australia).
  16. See articles headed "The Taxi Tsar" at www.smh.com.au/interactive/2009/taxis/ - retrieved 14 January 2012.
  17. "Inside the world of Mr Taxi", Linton Besser, Sydney Morning Herald, 19 September 2009.
  18. "Defunct cab body costing millions", Linton Besser, Sydney Morning Herald, 21 September 2009.
  19. "Main players had most to lose from reform plan", Linton Besser, Sydney Morning Herald, 21 September 2009.
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