Passengers will bear the brunt of the new taxi fare system, which Minister for Public Transport Terry Mulder said would provide more incentive for taxis to be on the road in peak times and would lift industry standards.

“We want to support the industry in transforming, and we realise that if we want better drivers and better services, we need to fairly compensate those providing these services,” he said of the most significant change to Victoria’s taxi fee structure in six years.

New flag fall, per kilometre and minute charges will apply for three distinct periods – ‘day’ (9am-5pm), ‘overnight’ (5pm-9am) and ‘peak’ (10pm-4am overnight Friday and Saturday).

The Australian reported that the changes mean that late-night revellers across Melbourne should expect to pay around an extra $5.40 for a 5km ride home (total cost $19) during the peak, or an extra $20 for a 40km trip (total cost $98).

“On average, daytime fares will only rise by a little over $1 per trip, for trips of up to 40km,” Mulder said.

The new taxi fares take effect from May 19 May.

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