21 September 2006 - Bank sets its sites on taxi takeover

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SYDNEY MORNING HERALD

21 September, 2006

Bank sets its sights on taxi takeover

Lisa Murray

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MACQUARIE Bank is launching an all-out assault on the taxi industry with plans to set up a rival cab fleet and a new voucher system to compete with Cabcharge.

The fleet would be in addition to the bank’s wheelchair-accessible cab company, Lime Taxis, and has been approved by the bank’s executive committee.

It will be branded separately from Lime and will recruit owner-drivers with their own plates.

The company expects to have a “comfortable number” of cars in its first 12 months.

Macquarie’s new vouchers would provide the first real competition to Cabcharge’s payments system, which has a near monopoly of the Sydney market.

Macquarie employs more than 5800 staff in Australian and spends more than $5 million on taxi fares for business trips every year.  The bank is expected to use the vouchers for its own staff and may also tap into its business network to pick up other corporate customers.

The new venture comes as Macquarie experiences further delays in getting its Lime service up and running. The service, for disabled passengers, was launched in February by a Macquarie executive, Bill Moss, who has muscular dystrophy.

It has faced  criticism from Cabcharge’s boss, Reg Kermode, who says the taxi industry is “far removed from the rarified atmosphere of merchant banking”.  Cabcharge owns Australia’s biggest operator, Taxis Combined.

Some Cabcharge directors believe Macquarie aims to build a fleet big enough to tie up all jobs to and from Sydney Airport, which is controlled by one of the bank’s biggest listed funds, Macquarie Airports.

Lime rejects this claim.

The company said in February that it would have 240 cabs on the road by Christmas. There are none officially on the road and the 240-car target has been pushed back until at least next September. The company was forced to wait six months before its network was authorised by the Ministry of Transport in March.

It has since been fighting a requirement for it to join the centralised booking service for taxis with wheelchair access, which is run by Cabcharge.

Lime’s chief executive, Stephen Albin, said:  “What started out as a realistic business proposition to raise the standard of service to the disabled community has uncovered an industry that’s so locked up to competition that you couldn’t reasonably expect to get a socially responsible initiative off the ground in itself.” Macquarie began expanding its taxi ambitions last November.

Lime has no cars in operation, although some of its Mercedes-Benz Vitos have been shuttling bank staff around Sydney as part of a test run. More than 300 drivers have expressed interest in working for Lime, promoting its decision to set up a second fleet.

Lime is selling franchises for about $27,500-plus a month. But the second fleet will not be a franchise business model. Drivers will have their own cars and licences and be given access to Macquarie’s booking service.

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131 008 says:

Is Macquarie Bank interested in Cabcharge?

If Macquarie Bank is being truthful about its intentions for a second taxi fleet then those who have already committed their time and money to the Taxi Industry will come to appreciate the national protection that 131 008 affords their market share.

But with the launch of Lime Taxis now apparently delayed for another year are these Macquarie Bank media releases simply an attempt to contain the Cabcharge share price?

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