AUSTRALIA’S largest taxi operator is being investigated by the Australian Taxation Office over its payment practices and whether it is compliant with laws, a regulator says.
The taxi industry’s biggest pay-to-play companies have been found to have defrauded more than 200,000 taxi drivers, which could amount to billions of dollars, over the past six years, the ATO said on Tuesday.
Cab drivers were charged $50 a week for a minimum of nine hours of their time to transport passengers, but it was unclear whether drivers were paid for extra time on the road.
There are more than 400 pay-as-you-go cabs in Australia, with some offering hourly rates ranging from $2.20 to $7.70 per hour.
One pay-per-ride company, RideTaxi, has been fined $2 million by the ATOs payment watchdog for allegedly charging drivers more than $3,500 per hour for the same trip.
“These companies have continued to cheat drivers in the face of increasing competition and increased competition enforcement, particularly on pay-by-the-hour (P2P),” the ATOS said in a statement.
RideTaxi was fined $5 million last year, but the ATOC said the company had been operating under a different licence, which means it was exempt from its regulation.
Pay-by the trip operator has been a major pay-for-play industry in Australia for years, as drivers have to pay for the extra time they need to transport a passenger.
But the ATOA has flagged that there are more pay-the-$hundreds-per hour operators, which are not subject to regulation.
The ATO issued a notice of intent to levy criminal and civil penalties against five companies for their alleged payments practices, including RideTaxy, which has also been fined.
The other five companies, which were not identified, are known as pay-one-ride, pay-two-hundred-per cent and pay-three-hundreds.
They were charged with one offence each for failing to provide proper documentation of a payment, and two for failure to pay the minimum wage.
The three companies that were found to be not providing adequate documentation to support their payments included TaxiSafe, which was fined for not providing documentation to prove that drivers were receiving the required amount of time on their trips, and CabRide, which received a $2,000 fine for failing in its duty to notify the ATOR of an increase in its rate for cabs to $1.25 per kilometre.
Other companies have not been fined, but have been ordered to repay the ATORS money, the regulator said.
The companies are currently under investigation by the ASX, which said the investigation was not about any particular payment scheme.
Under the ATOLA rules, companies cannot operate in more than one business, so the regulator is not able to order the companies to pay back any money they have received from the ATOP. AAP/ABC