Courtesy of Mish
If you are in the tax driving business and paid a lot of money for a medallion or license, sell it while you still can, if you still can.
In Melbourne Australia, Taxi Reform and reduced costs of licenses have some drivers worried they will lose everything.
Sandy Spanos is only 58, but now she could lose her house and be unable to pay for treatment for her cancer, which she was diagnosed with two years ago because the reform will leave her and her husband in hundreds of thousands of dollars of debt.
Mrs. Spanos invested in three taxi licenses so she could enter retirement comfortably with a good superannuation, but she said it has all been ripped from her.
“What did I do wrong?” She asked news.com.au.
The Victorian government wants to deregulate the taxi industry by abolishing taxi licenses and introducing a single registration for taxis, hire cars and ride-share services like Uber.
Taxi licenses cost cabbies $500,000 and it’s seen as an investment that will later help fund retirement.
The government now wants to buy back these licenses and has proposed to compensate taxi license holders by paying $100,000 for their first license and $50,000 for up to three others. Mrs. Spanos has three licenses, meaning she would receive $200,000, but she still has a loan of $300,000 she needs to pay back to the bank.
Her husband drives taxis but she said he was losing income.
“I can’t pay the bank back. I’ve still got bank loans and my husband’s income has almost decimated and my assets are being seized and I’m going to lose my house,” she said.
The Victorian government has previously said introducing new licensing requirements would put passengers first and create a level playing field for all industry participants.
“This will drive greater consumer choice, better service, and will place downward pressure on fares,” the government said.
The government claims it will be cheaper to now operate a taxi or hire car as the annual licence fee of $23,000 will be axed.
“What did I do wrong?”
- You paid $500,000 for each of three licenses
- You put all of your money in one basket
- You failed to assess Uber and other possibilities
- You borrowed money for a business that one should have seen issues with a long time ago.
Investing in taxis now is like investing in the film printing business 15 years ago, just as digital was about to replace film.
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