What is a taxi licence?
To ensure that the communities served by taxis receive quality and innovative taxi services at a reasonable cost, the Queensland Government regulates the taxi industry in this state. The government specifies such items as areas of operation, the numbers of taxis in those areas, maximum fares, types of vehicle, and standards of service. A Taxi Service Licence (taxi licence) is a licence issued by Queensland Transport that allows the holder to provide a taxi service in a defined area. The holder of the licence must hold Operator Accreditation (also issued by Queensland Transport) and be affiliated with a taxi company holding a Taxi Service Contract. All of these entities and standards are defined in the governing legislation for the taxi industry in Queensland - the Transport Operations (Passenger Transport) Act 1994 and subordinate legislation.

In other words?
You need a taxi licence to run a taxi and these licences can be transferred and hold a capital value. Although the licence has a term, renewal is automatic and the licence is effectively perpetual.  Someone other than the owner can run the taxi that operates on a licence, which makes a taxi licence a passive or semi-passive investment opportunity.  Though there are many conditions to holding a taxi licence, Garden City Cabs can help you with meeting and maintaining the requirements with minimal cost and time commitment.

How does a taxi licence earn an income (without me driving a taxi)?
There are two ways to generate an income from a taxi licence ? leasing and management. Either method is currently returning around 6.0% per annum or more before tax. This is assessing only income, and does not assess any capital gain that may be made. Taxi Licence Leasing  Leasing a taxi licence is a passive investment. The licence owner leases their licence to a Taxi Company or individual operator who provides the vehicle ? the owner has no involvement in the running of the business.

Taxi Licence Management
This alternative is for the owner of the Taxi Service Licence to provide the taxi vehicle as well, and have an operator manage the vehicle and Licence (including dealing with drivers and arranging vehicle maintenance). Instead of a passive investment, the licence now becomes a taxi business (an active asset).  Under Licence Management the owner of the licence receives all the income from the operation of the taxi and is liable for all costs of the operation. Costs include a management fee charged by the operator and vehicle replacement (or depreciation) costs.  The taxation system in Australia has many concessions and incentives available to small business owners that are not available to owners of passive investments. The areas most of interest to an owner of a taxi service licence are Capital Gains Tax, Income Tax and the Goods & Services Tax (GST).

Capital Gains Tax
The capital gain available on a taxi service licence has historically been one of its most attractive features as an investment, but since 1985 the introduction of Capital Gains Tax has introduced challenges for many investors. There are a range of concessions on Capital Gains Tax available to the owners of an active asset (a business). Using the Active Asset concession on top of the normal discount to an individual or trust can see the taxable amount reduced by 75%. The tax on this capital gain can be further deferred or eliminated entirely depending on the circumstances of the owner (eg rollover into super fund).

How secure is my investment?
Queensland Governments have always supported regulation of the taxi industry in this state, and this is supported by the recent National Competition Policy review. Taxi transport is very competitive and competes with all forms of public transport. Additionally most capital cities throughout Australia have competition within the industry as metropolitan taxi companies compete for a share of the market. 

What does a Taxi Licence cost in Toowoomba?
Currently Taxi Licences are selling at between $300,000.00 and $325,000.00 plus Stamp Duty.

What else do I need to know before I buy a taxi licence?
Subject to the granting of Operator Accreditation, any person, partnership, company, trust or superannuation fund can own a Taxi Service Licence. A Transfer of a Taxi Service Licence Notification form must be completed and lodged with Queensland Transport. This form is available from Garden City Cabs or Queensland Transport.

Operator Accreditation
Operator Accreditation is an approval that a taxi licence owner must attain and maintain to be legally permitted to provide public passenger transport services. Even if the owner is not involved in managing the operation of the taxi on a day-to-day basis, they are still required to hold Operator Accreditation.  Operator Accreditation is generally issued for a one-year period, and an annual fee is applicable on renewal. An application for operator accreditation may be refused (eg. if an applicant has been convicted of certain criminal offences), however for most investors approval should be straightforward. Garden City Cabs will supply you with an application form.

About Garden City Cabs
Garden city Cabs is part of the Black & White Cabs group of companies which is one of the largest taxi companies in Queensland. It has a long and proud history of service to the Toowoomba community, dating back over 30 years. Black & White Cabs was the first metropolitan company to sign a Taxi Service Contract with Queensland Transport. Garden City Cabs enjoys a very loyal customer base. We now have a fleet of over 70 taxis including Business Class (prestige) taxis and 14 Maxicabs.

What should I do now?
Garden City Cabs management will assist you with purchasing your taxi licence. Please call us at Garden City Cabs (07) 46 357 250 or fax us on (07) 46 355 755 for any further assistance.

Disclaimer
Neither Garden City Cabs nor any member or employee of Garden City Cabs undertakes any responsibility or accepts any liability in any way to any person in respect for reliance on this information. Garden City Cabs recommends and strongly suggests that you seek your own independent legal and business (including accountants) advice prior to investing in the taxi industry including purchasing, leasing or managing a taxi service licence. All figures in this document exclude GST.