Renewed demand from business travellers is driving industry growth
Melbourne, Australia (PRWEB) May 10, 2012
The Australian Taxi and Other Road Passenger Transport industry is heavily regulated, with state governments determining the number of taxis on the road, the fares they can charge and the structure of the industry in which they operate. Hire cars, and limousines and wedding cars are moderately regulated, with state governments determining the number of these vehicles on the road and the operating conditions. Over the five years through 2011-12, the number of taxis on the road is expected to grow. Over the same period, revenue will grow an annualised 2.5% to reach a forecast $4.75 billion. According to IBISWorld industry analyst Caroline Finch, “Flush consumers and businesspeople supported industry revenue growth in the years leading up to the global financial crisis”. The poor global economic conditions in 2008-09 caused Australian business confidence to plummet, taking budgets for business travel and industry revenue with it. However, revenue picked up through 2009-10 and 2010-11, as business travellers returned and consumer demand stabilised. In 2011-12, industry revenue is expected to grow 3.1%.
As government-determined supply lags well behind demand, population growth and demographic changes will see revenue increase strongly in the next five years. The industry's revenue is projected to grow over the five years through 2016-17. However, underlying demand for the industry is likely to grow slower than revenue. “Business travel is projected to grow slower than in the past, as technology use changes demand for travel and therefore taxis and other road passenger transport”, Finch adds. As business growth slows, catering to the transport needs of an ageing population presents an opportunity for the industry.
Market share concentration is estimated to be low in the Taxi and Other Road Passenger Transport industry in Australia. The industry is dominated by one major player, Cabcharge. The hire car segment especially is dominated by owner drivers. Revenue does not capture the full influence of various players in the industry. Hierarchy, depot owners, license owners and license operators stand between the customer and the taxi driver. Concentration at these intermediate levels of the industry can have significant effects on competition within the industry without being significant from a revenue point of view. For example, Cabcharge has a monopoly-like control of payment systems within the industry and has been prosecuted for anti-competitive payment by the Australian Competition and Consumer Commission.
For more information, visit IBISWorld’s Taxi and Other Road Passenger Transport report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry operate taxicabs, hire cars with drivers, or other forms of road vehicles for passenger transportation, such as limousines and wedding cars.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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