Taxi drivers are used to paying around $7,800 for a green slip, compared to private motorists, who pay around $700. Since Uber and GoCatch entered the “point-to-point” market, private motorists pay the lower price while using their cars for ridesharing. Now there will be a new price for frequent drivers.
NSW will now introduce so-called “dynamic pricing” to green slips for taxis and ridesharing vehicles. It is the first state to do so. Telematics, a form of technology already used in many vehicles, can effectively record how, when and where people drive.
Taxi drivers or ridesharers who drive often, will pay more for their green slip than those who drive less.
Currently, taxi drivers are nearly 12 times more likely than a private motorist to make a claim. But private motorists who use their cars for ridesharing are as risky as taxi drivers, especially if they are frequent drivers.
Minister Victor Dominello wants to promote ridesharing, while making the CTP scheme fair for taxi sand ridesharers. Ridesharing drivers will pay a base premium and then make periodic top-up payments according to road usage and passenger trips. Schemes like this already exist in the US.
Uber has cautiously welcomed fair changes but wants to see how the pricing structure actually works, for example, whether top-ups will come from the driver or the passenger.
Telematics is nothing new in the global insurance market. In fact, dynamic premium pricing is often called “usage-based insurance” or “pay as you drive”.
QBE already uses Insurance Box in the vehicles of people with comprehensive insurance, to watch their driving and set their premiums. Telematics data reveal their style of braking and acceleration, actual speed and speed compared with other road users.
It is predicted dynamic CTP pricing will cut taxi premiums by up to 40%. For full-time Uber drivers, their CTP premiums will rocket. If the bill is passed – as part of a bill for general CTP reform – most drivers will see changes in the price of their CTP green slips from July 2017.