Cost pressures on tow truck drivers in Victoria are threatening their future, threatening more delays at crashes, a leading industry body warns.
A bid by the towing industry to raise accident towing fees has been rejcted by the Essential Services Commission.
It found current regulated towing and storage fees for the Melbourne controlled area were appropriate and “should not be changed beyond the annual adjustment mechanism”, along with an unchanged productivity adjustment factor.
But the Victorian Automotive Chamber of Commerce says despite mounting evidence of unsustainable cost pressures facing the industry the fees will stay the same.
It warns Victorian motorists could face significantly longer wait times for accident clearance and reduced service quality as operators abandon business and compromise road safety.
The ESC’s final report, released this week after a three-month delay, recommends only minor indexation increases to existing fee.
Falling short
VACC CEO Peter Jones said falls well short of addressing the financial realities confronting accident towing operators across metropolitan Melbourne.
“We are deeply concerned that this decision overlooks the genuine cost pressures our members are experiencing and may jeopardise the long-term sustainability of accident towing services in Victoria,” Jones says.
“The ESC appears to have dismissed compelling evidence that demonstrates the current fee structure is no longer adequate to cover basic operational costs.”
The VACC’s comprehensive submission, supported by detailed economic analysis from Deloitte, highlighted significant cost increases since 2021: diesel fuel prices have risen by 34 per cent, insurance premiums have increased by 22 per cent, labour costs in the transport industry have grown by 26% (double the average wage growth), and industrial land rents in Melbourne have surged by 64%.
It wanted a fee structure similar to one recently implemented in Western Australia.
“We provided the ESC with a practical, evidence-based solution that has already been successfully implemented in another jurisdiction,” Jones says. “We are disappointed that this recommendation was not given the consideration we believe it warranted, particularly given the thorough consultation process undertaken in Western Australia.”
“The decision also overlooks the increasing complexity posed by electric and hybrid vehicles. Towing accident-damaged EVs requires specialised equipment, training, and safety protocols that significantly increase operational costs. These vehicles must be stored with 15-metre isolation zones, which substantially reduces storage capacity and increases overhead expenses
Industry survey
VACC survey data reveals that 78 per cent of accident towing operators indicate current fees are insufficient to cover their operational costs. Many operators are subsidising their accident towing operations through other business activities, creating an unsustainable business model that raises questions about the industry’s long-term viability.
“Our primary concern is ensuring Victorian motorists continue to receive timely, professional accident towing services,” Jones says.
“If operators are unable to maintain financially viable businesses, this could result in longer response times, reduced service quality, and ultimately impact road safety and traffic management across Melbourne.”