A2B - A2B Australia

[ROE]

Seriously CAB is an easy target, it big enough to target and small enough to screw it over and CAB CEO
is a private guy, he doesn't give interview, he doesn't talk about rumor, he shunt most people that want to do deal and milk them fee ...he prefer to do his own deal like Warren Buffett and they are successful.

You get a glim of him at AGM and he tell you how CAB did in the year to 30/06 and another kick ass dividend...

All that lead to a bit of a tall poppy syndrome for some people...

The regulators know they cant touch WOW,WES and the big 4 banks, they make a few noises here and there then disappear under the radar.

so they target someone like CAB, FLT etc.. to show that they are doing something...

You got to give credit to Reg that he build an incredible successful business that fairly impossible to penetrate.

even Mac Banks and Visa lost this game to CAB so the only thing they can do is keep attacking it with all sort of reform and try to weaken it.

but still CAB soldier on deliver rock solid dividend yield that can only be matched by a few very large business.

you got to see how CAB business structure to see its castle is surround by rivers, swamp, traps and if you are
someone who try to get in your probably dies at the gate.

time to hail a Taxi

 

[McLovin]

The regulators know they cant touch WOW,WES and the big 4 banks, they make a few noises here and there then disappear under the radar.

so they target someone like CAB, FLT etc.. to show that they are doing something...

Exactly my thinking. The ACCC are useless when it comes to breaking up the duopolies and oligopolies in this country (the recent Metcash/Frankins thing was farcical) but they know companies like CAB are pretty easy.

 

[ROE]

Exactly my thinking. The ACCC are useless when it comes to breaking up the duopolies and oligopolies in this country (the recent Metcash/Frankins thing was farcical) but they know companies like CAB are pretty easy.

yeah this is a classic example, WOW and WES control most of the market and you wont let MTS get bigger to give them a decent chance of competition? and if WOW and WES decided to go Regional MTS need the scale to compete..

and FLT price fixing another easy target..

I havent seen them launch anything against WOW or WES or the big 4

how many producers complain left and right WOW/WES use their market power to pay them bankruptcy price
for their produces and the tactics where small fruit shop open near woolies, woolies then sell stuff below cost
and drive the other guy out...

you dont see many small fruit/veg shop near Woolies any more ....I used to see them all the time
decades back...

Regulators maybe need a reform themselves

 

[catfish]

hey everyone,

Im failing to see CAB's competitive advantage at a glance. Can someone please explain why they are in a near monopolistic position? Surely the technology is not the only advantage.

And ROE you say CAB's best is still ahead of it, What do you mean by this? CAB seems resonably cheap at first inspection of its current business, although how can this company move further forward as it is already in a dominant position and is heavily targeted by regulators. It seems to me that the only way is down, involving loss of market share and some potential end to their dream run of charging this 10% fee on taxi payments.

It has been a great business, providing shareholders with great return but Im struggling to predict the furutre on thuis one.

 

[Kulio]

If I produce a product who the **** are you to tell me how much I try to sell it for? You don't like the fee I charge on my card? Then don't use it, simple.

Fel's inquiry holds no weight and he is just an old fool seeking attention.

 

[ROE]

hey everyone,

Im failing to see CAB's competitive advantage at a glance. Can someone please explain why they are in a near monopolistic position? Surely the technology is not the only advantage.

And ROE you say CAB's best is still ahead of it, What do you mean by this? CAB seems resonably cheap at first inspection of its current business, although how can this company move further forward as it is already in a dominant position and is heavily targeted by regulators. It seems to me that the only way is down, involving loss of market share and some potential end to their dream run of charging this 10% fee on taxi payments.

It has been a great business, providing shareholders with great return but Im struggling to predict the furutre on thuis one.

CAB make money from its payment but its surrounding structure that make its payment unbreakable.

CAB owned the Radio network, each taxi has to sign up to a radio network, regulation requirement.

CAB owned dispatching system, all taxi must use the dispatching system one way or another

CAB owned the largest fleet of Taxi plate, they operate the largest taxi network, taxi repair, finance, training etc...

CAB develop their own payment system and own cabcharge vouchers (corporate accounts)

CAB EFPOST system is fairly impressive and high tech, the big 4 banks outsource some of the development to
CAB.... CAB one of the first to adopt wireless terminal now start to build traction in most retails.

Almost all taxi have to have a CAB payment system else they cant process Cabcharge vouchers
all this add up give CAB a very reliable earning stream.

In order for rival to break into CAB they must break into these area that CAB own and CAB wont let you in that easily.... They own the largest taxi fleet so they only put their CAB payment system in,

Rival can have their own taxi fleet and put whatever system they want in there ... Massive Massive capital investment or Rivals entice independent operators to go with them and give them nice stuff like CAB give them like meters and EFPOST machines and again this required large capital investment.

so what CAB can do is wait for Rival to invest these large Capital investment initiatives then comes up with their own incentives that even beat its rival, its rival get ****ty return on capital and end of story.

CAB did this to Macquarie banks when they try to muscle into CAB taxi business, CAB bought up all the disable plates, Mac bank got shut out of the market operate at a loss and sell out to management which now becomes
Live Payments.

CAB also expand into bus now, it now account around 24% of CAB earning and grow at double digit every year
(that is why I say the best of CAB is yet to come..this market is still young CAB can takes on a lot more market share, installed their payment system and expand into other transport hub)

CAB can also buy the rest of the indepedent operators who dont want to run Taxi any more...again this give CAB scale, they just bought Yellow Cab in Adelaide for 4 million bucks

I can go on and on and on but that should be enough to get you started....

people can always pay cash and don't get quacked 10% finance service by CAB so I dont know what the hoha is about....they only charge 10% if you use cards because they have to process these cards, wear bad debts and make a bucks... Because they are so efficient at doing this and get large margin you penalise them???? it cost them money to installed these infrastructure and I found it ridiculous you wont let people make money from their investment in these infrastructure...

Run an airline you put in billions you make a few millions put ten of millions in CAB you get
the same return so why punish cab for having a far superior business...

I always pay cash catching taxi and I own CAB shares

PS: I can tell you a bit more but I with hold some of this information for when the fear comes
I strike, Until that feared play out by the market and I get a bit more

 

[Kulio]

People are not dependant on the Cabcharge Card ie it's not a necessity as other options are available, so something I don't bloody understand is why any regulatory measures are even needed for their fee? Why is this in the inquiry? Why regulate the 10%? Makes no friggin sense to me. Why are they wasting time on this? Last time I checked predominant capitalism was in place. You use my service I charge you for it, simple.

Obviously the price of dildos does not need to be investigated because Fel's probably has one up his ass.

 

[prawn_86]

Some good discussion in this thread

CAB is in a strong position, and personally i think this latest peice of legislation will probably fizzle out, as most does. CAB seems fairly confident it can prove that its not a CC fee as such, more a fee for service as Kulio and others have said. Unlike airlines who charge you a specific amount to use a CC, no matter how much the original purchase is

 

[JTLP]

I was reading the Herald not too long ago and they had an article about shaking up the Taxi industry in Vic; something about lowering fares Mon-Thurs with increase on Fri-Sun, heavily reducing licensing fee's to enable more plate owners, only allowing plate owners to hold a certain amount etc etc.

Obviously these were all recommendations and nothing has come to fruition - but some food for thought.

 

[prawn_86]

More owners mean more Cabcharge products in their CABs

I was talking to a Melbourne cabby and he was saying they should all go on strike if those new lower fare rules come into play, so they aren't happy about the review

 

[herzy]

they seem to have taken on quite a lot of debt relatively recently. was that the adelaide acquisition? ROE, think that could be a problem in the future, combined with potential legislation impacting profits?

 

[HarryH]

Some good discussion in this thread

CAB is in a strong position, and personally i think this latest peice of legislation will probably fizzle out, as most does. CAB seems fairly confident it can prove that its not a CC fee as such, more a fee for service as Kulio and others have said. Unlike airlines who charge you a specific amount to use a CC, no matter how much the original purchase is

What legislation are you referring to? I don't see any current legislation affecting CAB in a bad way sorry.

 

[prawn_86]

What legislation are you referring to? I don't see any current legislation affecting CAB in a bad way sorry.

Read through the last couple pages of this thread discussing propsed changes to legislation regarding credit card fees

 

[HarryH]

Read through the last couple pages of this thread discussing propsed changes to legislation regarding credit card fees

If you're referring to credit card fees as announced by the RBA then nope still don't see it.

ie basically trying to say I see talk of legislation but don't see how it really affects CAB

 

[herzy]

If you're referring to credit card fees as announced by the RBA then nope still don't see it.

ie basically trying to say I see talk of legislation but don't see how it really affects CAB

from what I understand, CAB receives a good part of its profits from the 20% CREDIT CARD SURCHARGE they put on cab fares. (arguable whether this is actually a credit card surcharge, but that's another issue)

 

[HarryH]

from what I understand, CAB receives a good part of its profits from the 20% CREDIT CARD SURCHARGE they put on cab fares. (arguable whether this is actually a credit card surcharge, but that's another issue)

How about that, people actually use credit cards to pay for their cab fare.

Btw I'm pretty sure it's 10%, not 20%.

 

[Ves]

Someone may like to correct me, but from the 2011 financial statements:

Taxi service fee income was $87,328,000

Total income revenue / income was $184,542,000. This is about 47% of all revenue.

However, this also includes payments that were not from a "credit card" (hence not considered a "surcharge" if there was some sort of leglislative risk?). E-tickets, cabcharge cards, other cab dockets etc. must be outside of the scope of the new "surcharge" ruling by the RBA, surely?

I would be interested to know what impact on their NPAT a change from a 10% surcharge to a legislatively enforced 5% surcharge would have?

 

[HarryH]

Someone may like to correct me, but from the 2011 financial statements:

Taxi service fee income was $87,328,000

Total income revenue / income was $184,542,000. This is about 47% of all revenue.

However, this also includes payments that were not from a "credit card" (hence not considered a "surcharge" if there was some sort of leglislative risk?). E-tickets, cabcharge cards, other cab dockets etc. must be outside of the scope of the new "surcharge" ruling by the RBA, surely?

I would be interested to know what impact on their NPAT a change from a 10% surcharge to a legislatively enforced 5% surcharge would have?

Cabcharge fastcard, e-tickets dockets etc should be outside of that RBA ruling. The onus is on NAB (the "acquirer" of the transaction) to enforce the rule on CAB for credit card surcharges. If NAB doesn't then Visa/Mastercard/or whichever credit card can fine NAB. I don't know about you but I'm pretty sure CAB wouldn't fine their bank for overcharging on their own card.

The above is just my opinion and I'm not a lawyer (so please correct me if I'm wrong) but the way I see it this legislation doesn't really affect CAB all that much.

 

[herzy]

Fair points HarryH and Ves, thank you!

 

[prawn_86]

the way I see it this legislation doesn't really affect CAB all that much.

Pretty similar to what we have all said. New legisilation shouldn't affect CAB, but who knows, maybe it will, and that slight risk and uncertainty is what has caused the fall in share price. The market hates uncertainty, but if you are certain it wont be affected then perhaps it may be a good time to think about buying more?