NSW is set to become the first state in Australia to adopt dynamic premium pricing for Compulsory Third Party Green Slips for taxis and ridesharing vehicles.

Minister for Innovation and Better Regulation Victor Dominello said a new variable usage-based component would apply on point-to-point vehicle premiums under a proposed overhaul of the state’s Motor Accident Insurance Scheme.

“We want NSW to be a smart state and that’s why we will use telematics to more accurately set CTP premiums for taxis and ridesharing vehicles,” he said.

“Using telematics, a form of in-vehicle technology already used by most operators, will allow us to record how often a driver is on the road, at what time of the day and how safely they drive. It will enable us to price Green Slip premiums accordingly.”

Taxis are almost 12 times more likely than an average passenger vehicle to make a claim and currently pay an average premium of $7,800 per year. Ridesharing drivers pay class 1 premiums, ranging from $537 to $886.

“The Government’s proposed reform of the CTP Green Slip Scheme would see a significant reduction in annual premiums for taxi owners of up to 40 per cent. This would be a massive win for NSW taxi drivers,” Mr Dominello said.

In January, the NSW Government pledged to embrace the collaborative economy and market disruption, where it delivers better outcomes and services for citizens.

“We want to maintain low barriers to entry into the ridesharing market to encourage more competition and innovation. Consistent with this approach, ridesharing drivers will continue to operate in the general passenger vehicle class of the CTP scheme,” Mr Dominello said.

“However, in the new system, ridesharing operators, such as GoCatch and Uber, will be required to make periodic premium top-up payments on behalf of their drivers based road usage and passenger trips. Similar top-up schemes exist in the US.

“These reforms will create a more level playing field between established and emerging participants in the point-to-point transport market.”

Subject to Parliament’s approval, the new CTP Green Slip Scheme could take effect from July 2017. Further information is available at www.greenslipreforms.nsw.gov.au