Industry Overview

P2P Transport operates in the Australian point-to-point passenger transport industry, which is estimated to have generated approximately $5.9 billion in passenger expenditure for FY16.

The taxi segment accounts for approximately 93% of passenger expenditure, while ride share represents the fastest growing segment accounting for approximately 6% of passenger expenditure. The corporate hire car segment represents a smaller, stable segment accounting for approximately 1% of passenger expenditure.

P2P Transport operates in each segment of the point-to-point passenger transport industry through the provision of vehicles on a rental basis to independent professional drivers.

The Company’s business model comprises end-to-end fleet management services extending from vehicle acquisition and in-house customisation, vehicle servicing and driver support, and fleet management and administration.

The overall point-to-point passenger transport industry in Australia is rapidly evolving. The growth of online-enabled platforms and smartphone applications that connect passengers and drivers, such as that introduced by Uber and other ride share platforms, is a key driver of change. Similar to other international jurisdictions, the taxi segment in Australia has experienced disruption. This changing landscape, together with the highly fragmented nature of the industry involving a large number of firms owning small taxi fleets (typically 10-20 vehicles22), has seen smaller fleet operators experience increasing cost and competitive pressures. With limited opportunity to generate scale efficiencies, a number of fleet operators are leaving the industry and other participants, such as taxi plate owners, have experienced a reduction in asset values.

The taxi segment is responding to industry changes with a range of initiatives (such as increased use of taxi booking applications and improved services for passengers) and government led regulatory changes (for example, future reduction in compulsory third party (CTP) insurance costs for taxis and increased efficiency in taxi driver licensing) aimed at improving quality, service and cost competitiveness. Recent changes to the taxi and ride share regulatory landscapes have resulted in all point-to-point passenger transport segments (taxis, ride share and corporate hire cars) being regulated under a single regime in an effort to address cost inefficiencies in the taxi industry and to create an enhanced regulatory framework for hire cars and ride share.

The point-to-point passenger transport industry includes all forms of personalised, door-to-door transport where a driver is paid a fee to take a passenger to a destination of the passenger’s choosing, including on-demand services provided by taxis, corporate hire cars, and ride sharing services. This excludes mass transit, such as trains and buses, car-sharing, car rental where driven by the user, and other on-demand services with larger vehicles, such as charter buses and shuttle vehicles.

A comparison of the relevant personalised point-to-point transport options is given below.

Taxi: a vehicle for public hire, fitted with a taximeter, camera, dispatch device and external branding and can be hailed from the street or ranks without pre-booking.

Taxi booking services receive and dispatch bookings to drivers affiliated with their service.

Ride share: mobile application-based, on-demand service in which a driver typically uses the spare capacity of a private vehicle to supply transport to a passenger.

Corporate hire car: vehicles operated on a pre-booked basis. Typically, these are luxury sedans or stretched limousines.

Fleet operator: a company that owns a fleet of cars that it rents to taxi drivers, corporate hire car drivers and / or ride share drivers. Typically included within this service are vehicle registration, compulsory third party (CTP) insurance, comprehensive insurance, scheduled maintenance and breakdown assistance, in varying combinations.23 In the Company’s experience,vertically integrated fleet operators can provide these services more efficiently than smaller operators or driver-owners by bringing servicing, maintenance and repairs, as well as other value-added services, in-house.

Companies active in the fleet operator segment include those catering primarily to the ride share driver (such as Splend, Stride and Keyz), companies catering to taxi, ride share and corporate hire car drivers (such as P2P Transport), as well as traditional rental companies (such as Hertz, Europcar and Thrifty).