TAXI BUSINESS DECLINED

Southland Times, Issue 23376, 7 December 1937, Page 11

TAXI BUSINESS DECLINED

Insurance Companies In Sydney

DRIVERS IN QUANDARY

SYDNEY, November 15. The Ajax Insurance Company, which has been “carrying” a large number of taxi-cabs here, last week notified everyone whom it might concern that after 4 p.m. today, the insurance policies of some 350 taxis would be cancelled. The reason given by the company officials is that taxis are “a bad risk.” (< Taxi insurance has proved to be a losing game”—so says a high insurance expert. Once the companies regarded this business as a fifty-fifty risk, but during the past few months the rapid increase of accidents has made the position impossible, according to the manager of the Ajax Company. DOUBLE PREMIUMS Taxi owners pay double the premium paid by private owners and they cannot claim for damage under £5. Moreover, as they are allowed a rebate for non-claim to the amount of 33 1-3 per cent., they rarely claim for anything under £lO Taxi insurance policies are issued with a proviso that they may be cancelled by either party on making a pro rata payment. According to the Ajax Company it will cost them £3OOO in rebates to write off the policies that they intend to cancel, but they would prefer to face this substantial loss rather than maintain the present precarious position. There are about 1000 taxis operating in Sydney and the lead given by the Ajax Company in cancelling policies was followed by the other insurance offices. By the end of the week the companies which run the various taxi services in the metropolitan area were faced with’ the practical certainty that they need not expect to get any risk cover in future in the ordinary legitimate way. They approached the insurance companies with offers of double premiums. One company offered double the premium, double the franchise and accept half of the third party insurance—in other words, it was prepared to pay £34 for every £lOO insurance, to pay for all damages up to £lO, and to accept £5OO instead .f £lOOO for third party risk. Even these handsome concessions did not move the companies, which have apparently decided that they do not want taxi business at any price, and an appeal to various Melbourne offices proved equally fruitless. This afternoon hundreds of taxi drivers gathered at the Ajax insurance office to plead for a continuance of their policies, at least for the time. They pointed out that they had been unable so far to get cover elsewhere and if the Ajax cancelled their policies it would be virtually impossible for them to carry on. The office decided to deal generously with them and they all received extensions of a week or a fortnight. It should be understood, however, that this temporary cover is only for legal liability for damage to the vehicle or property or injury to persons outside the taxi. THIRD PARTY INSURANCE According to The Sun, which seems to have collected its facts carefully, at least 700 Sydney cabs are not insured against injury to passengers, and never have been. There is no law in New South Wales requiring compulsory third party insurance by owners. Under the hire-purchase system prevailing here, the obligation is on the hirer to see that he has third party cover, and if he fails to arrange this he may have his car taken back at once.

The position in regard to third party risk is therefore most unsatisfactory, and, though the matter was discussed by Cabinet last week, the Premier still declines to say whether he is prepared to make third party insurance compulsory by law. What the taxi companies are chiefly concerned about just now is the necessity for protecting their own property against damages or accident, and at present the difficulty of securing adequate insurance by ordinary methods seems almost insuperable. Some of the taxi companies are even contemplating carrying their own insurance with the help of a levy on the drivers. MANY ACCIDENTS In 1936, taxicabs were involved in 1520 accidents, or over 15 per cent, of the total number of road accidents in New South Wales, and, while the outlook may have been too gloomy for the insurance companies to face, it is still more depressing for the taxi passengers, pedestrians, and other motorists who will stand but a very remote chance of getting damages or compensation for injuries inflicted by uninsured taxis.

There is, of course, an obvious way of escape. As the private companies decline to take these risks, let the State Insurance Office do so.

Truth has pointed out convincingly that all Mr Stevens has to do is to remove the embargo upon motor business which his Government imposed in the interests of the private companies on the State Insurance Office, and the problem will be solved at once. With no profits or dividends to- pay, the State office could carry such business safely and probably show a profit as well.