A review of the Victorian taxi industry has recommended a new $10 booking fee to improve incentives for drivers to operate during peak hours.
The commission made the recommendation in its draft report, which was released on Tuesday evening.
The report said the charge would improve incentives for taxis to operate during peak times and would give incentives to improve the reliability of taxi booking services.
"The peak booking charge would be capped at a maximum of up to $10 and only applicable for booked taxi trips commencing during times when the peak tariff maximum fares apply," the report said.
"The charge would be separate to the standard maximum $2 booking fee — that is, it may apply in addition to a booking fee."
It also recommended bringing forward the peak period to 7:00pm on Friday and Saturday nights instead of 10:00pm, when it starts currently.
Essential Services Commission chairman Dr Ron Ben-David said the proposed changes could help keep taxis on the road during peak times.
"The data shows us very clearly that ... on a Friday night at about 7:00pm, there's a huge increase in demand for taxis," he said.
"At the same time, we're seeing a drop off in the number of taxis on the road.
"What we're proposing is to give taxis flexibility. We're not saying they have to increase prices.
"What we're saying is you can charge the $10 if it means you can provide a better, more reliable service to customers."
Lower taxi demand due to competing servicesThe commission did not propose increasing fares, noting increased price competition from services such as Uber.
"We have concluded that reductions in taxi trips are largely a result of consumers increasingly switching to alternative commercial passenger vehicle services," the report said.
The Victorian Taxi Association said giving taxi operators more flexibility over pricing would be a good thing.
"We think that, fundamentally, what people want from a taxi is a service when they need it. And if [the booking charge] helps achieve that, it'd be a positive thing for consumers," Victorian Taxi Association chief executive David Samuel said.
"What people often forget is that [competitor] services are often more expensive than a taxi during peak times.
"During low-demand times, we can't offset or make the fare lower because we can't go higher during a peak time."
The commission is seeking submissions from the industry on its draft recommendations.