Skip to content   Skip to footer navigation 

CHOICE hails taxi surcharge cap

CHOICE has welcomed Western Australia’s decision to end the taxi surcharge rort

24 February 2015

Consumers in Western Australia who frequently use taxis will be better off today following the state government’s decision to cap credit card surcharges.

The 5% cap on taxi surcharges, which came into effect today, follows similar moves by the NSW and Victorian state governments. 

“We congratulate the state government on taking this step to drive down excessive surcharges on taxi fares and we call upon those states and territories that are yet to act to get in the driver’s seat end this rort,” says CHOICE spokesperson Tom Godfrey.

“Until today consumers who used a credit card to pay for taxi in WA were faced with surcharges up to 11%, which is well in excess of the cost to the merchant of administering the transaction.”

“Surcharges should be reduced to the reasonable cost of processing cards, which RBA data shows on average to be less than 1% for merchants processing transactions through Visa and MasterCard.”

“Hopefully this will mean one less industry taking advantage of consumers and flouting the RBA’s rules, which unfortunately have no regulator enforcing them.”

“In the 23 months since the RBA rules came into place, the surcharging limits have been ignored by all of the worst surcharging offenders, in particular the nation’s airlines,” Mr Godfrey says.

In 2012, CHOICE awarded Cabcharge a Shonky for its 10 per cent credit card fee, which the company bizarrely claimed was not a surcharge but “fees on financial services rather than as a surcharge on the underlying transaction."[1]

The WA government’s decision to act on excessive taxi surcharges comes after the Victorian Taxi Services Commission began enforcing a maximum 5 per cent surcharge in February last year, then the NSW government followed suit in December.

A survey commissioned by CHOICE found that close to half of Australians who reported paying a credit card surcharge say they were not offered or made aware of an alternative, surcharge-free payment method.[2]

[1] Read more about Cabcharge’s Shonky awards/shonkys/the-2012-shonky-awards.aspx#ixzz2yFlWapG9

[2] CHOICE commissioned a nationally representative survey of 1,045 online Australians between 23 and 26 May 2013. The survey questions were part of a weekly omnibus conducted by Essential Research. When the 79% of respondents who reported using a credit card in the last 3 months were asked “At the time you last paid a credit card surcharge, were you offered or made aware of an alternative payment method that did not attract a surcharge?” 44% answered “No”.

Media contact