Recommendations from the Victorian Taxi Industry Inquiry have called for the state government to lift restrictions on taxi licences, meaning more people could buy cheaper licences to drive taxis.

Castlemaine taxi owner and operator Jen Hocking said more taxis would “flood the market”.

She said if the proposals were adopted the over-supply of taxis would lower standards across the region, with the loss of the expertise of current operators.

“There will be an increase in supply but not an increase in demand,” she said.

“Our concern is they’re going to relieve the problems in the short term but down the track these cars will not be able to continue to operate, and we’ll be back to where we started.”

A new report from PricewaterhouseCoopers has shown that under the inquiry’s recommendations there would be a 21.6 per cent increase in the number of taxi licences in Victoria within three years.

The report - commissioned by the Victorian Taxi Association – noted that there was a strong risk that taxi operator profitability would slump, threatening the viability of the industry. “The profit margin in the taxi industry is already low, at around 4 per cent. The reforms proposed by the industry inquiry create a real risk that this margin will be completely eroded,” it found.

VTA acting chief executive David Samuel said Castlemaine and Bendigo would see a big rise in the amount of taxi licences if the state government adopts the reforms.

Mr Samuel said reform of Victoria’s taxi industry was clearly “necessary”, but that it should be introduced on a more sustainable basis that’s driven by demand.

Ms Hocking said regional taxi drivers and operators would be the hardest hit by sweeping reforms that would apply across the board from city to country areas. 

“We operate differently in regional than metropolitan taxis,” she said.

“We don’t want to be lumped with the same reforms.

“We’re just hoping the taxi inquiry listens to our concerns.”