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Cabcharge vows to fight surcharge cuts

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AAP

2012-11-28

Transport payments group Cabcharge has vowed to fight any plans to cut taxi fare surcharges.

Executive chairman Reg Kermode took aim at the Reserve Bank of Australia (RBA) and former Australian Competition and Consumer Commission chairman Allan Fels as the company faces a challenge to its 10 per cent surcharge regime.

"This company does not intend to provide services to Visa and MasterCard at a cost to Cabcharge," he told the company's annual general meeting in Sydney on Wednesday.

"Suggestions that our industry could survive on five per cent, because of some as yet unaccepted draft report to the Victorian government on the Victorian taxi industry, are not realistic and are likely to be met with significant resistance."

Professor Fels is preparing to release a report into Cabcharge's dominance of the Victorian taxi industry, and the RBA has criticised existing 10 per cent surcharges on taxi fares.

Last week, the central bank announced that a new surcharge regime would start in March next year, instead of in January as previously planned.

Mr Kermode said Professor Fels's draft report would be unlikely to produce better outcomes for drivers.

He also said discussion of the report had caused an unfair impact on Cabcharge's market value, which has fallen significantly since the end of October.

"I would like to reassure you that this process is not necessarily the dire situation that some would lead you to believe," he told shareholders.

Cabcharge Australia shares were down four cents at $3.92 at 1439 AEDT, well below the $5.92 they closed at on October 31.