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Guidance note
Driver agreement – clarification of 55/45 split for
contract and discount work
Background
A driver agreement is an agreement between a taxi driver and a permit holder (operator) that
clarifies certain working conditions for the driver, and other arrangements for the taxi. It
should include information such as what portion of the fare box the driver will keep (which
must be at least 55%), insurance arrangements and leave entitlements.
A driver agreement includes conditions that all taxi drivers are entitled to—these are known
as ‘implied conditions’1. The implied conditions automatically apply to all driver agreements
and cannot be changed.
Does the driver get 55% of the metered fare?
Section 162L(2) of the (Transport (Compliance and Miscellaneous) Act 1983) says that it is
an implied condition that the driver must keep or be paid at least 55% of the ‘gross fares’
earned when the driver is in control of the taxi.
To help the industry to comply with this requirement, the TSC included this definition of
‘gross fares’ in the implied conditions:
Gross fares means the total amount of all fares accrued on the meter, including any
applicable:
a)
booking fee;
b)
high occupancy fee;
c)
late night surcharge; and
d)
public holiday surcharge,
but does not include Citylink or Eastlink tolls, any non-cash payment surcharge and any fees
charged by Melbourne Airport.
1
Conditions published in the government gazette on 19 June 2014 under section 162L(1) of the Transport
(Compliance and Miscellaneous) Act 1983
1
Taxi Services Commission
Level 23, 80 Collins Street, Melbourne VIC 3000
GPO Box 1716, Melbourne VIC 3001 Phone: 1800 638 802 (toll-free) www.taxi.vic.gov.au
September 2014
Version 1, 17 September 2014
Gross fares do not include the wheelchair accessible taxi (WAT) lifting fee.
This means that, generally, the driver must keep or be paid at least 55% of the metered
fare. The exception to this is contract and discount work.
Contract and discount work
The TSC supports contract and discount work as it promotes competition and leads to better
value and better services for the travelling public. However, the TSC acknowledges that it
may be unfair to require that the driver keeps 55% of the metered fare where the metered
fare has been discounted. The TSC did not intend the driver agreement reform to have this
effect.
Where the driver does work for a fixed rate under a contract, or offers a one-off discount
from the metered fare (for example a flat rate to the airport), the TSC agrees that the fare
collected from the passenger may be split 55/45 instead of the metered fare.
Next steps
The TSC is conducting a formal review of the implied conditions from December 2014 and
will address this issue at that time. In the meantime:

The TSC will not take enforcement action against permit holders engaged in contract
or discount work if the TSC is satisfied that the driver has received at least 55% of
the contracted or collected fare.

For discount and contract work, the driver and permit holder must both agree to the
discount, and this should be stated in the driver agreement. If the driver has not
agreed to the discount, the metered fare must be split 55/45.
DISCLAIMER: The information contained in this document is intended only to provide
guidance on these matters. It is not intended to be comprehensive. It does not constitute, nor
should it be treated as, legal advice or opinions. The Taxi Services Commission (TSC)
accepts no liability for any loss suffered as a result of reliance on this guidance note. The
TSC recommends that the parties seek independent professional advice if they have
concerns about whether a term of their driver agreement is consistent with the implied
conditions or another relevant law. The information in this document is current as at the date
of this document.
2
Taxi Services Commission
Level 23, 80 Collins Street, Melbourne VIC 3000
GPO Box 1716, Melbourne VIC 3001 Phone: 1800 638 802 (toll-free) www.taxi.vic.gov.au
September 2014
Version 1, 17 September 2014