VACC challenges ESC's Accident Towing Fee Structure as industry faces rising costs.
The Victorian Automotive Chamber of Commerce (VACC) has submitted a detailed response to the Essential Services Commission's (ESC) draft decision on accident towing, storage and salvage fees, expressing serious concerns about the proposed fee structure's impact on industry sustainability.
Essential Service for Victorian Road Users
Accident towing operators provide a critical service to Victorian consumers and the broader road network. By quickly and efficiently clearing accident scenes, these operators help restore traffic flow, preventing extended congestion and secondary incidents. This rapid response capability is essential to Melbourne's traffic management system, directly benefiting commuters, emergency services, and the economy by minimising disruption following road incidents.
Rising Operational Costs
Accident towing operators in Melbourne are experiencing significant cost increases across various aspects of their business. The VACC submission presents data showing that since 2021, labour costs in the transport industry have grown by 26 per cent, industrial land rents have risen by 64 per cent, and insurance premiums have grown by 22 per cent.
The submission highlights several key factors affecting the viability of accident towing services in metropolitan Melbourne:
Traffic Congestion Impact
Melbourne's increasing road congestion creates additional challenges for operators, extending the time required to reach accident sites and return to depots. This congestion directly impacts operating costs and efficiency while requiring operators to maintain 24/7 readiness regardless of traffic conditions.
Technological Challenges
The evolution of vehicle technology creates opportunities and challenges for the automotive industry, including accident towing operators. VACC members are investing in training and equipment to safely manage modern vehicles, including those with high-voltage battery systems. Storing damaged electric vehicles creates a new hazard, as they must be treated differently to traditional internal combustion vehicles, requiring specialised facilities and safety protocols to
mitigate fire risks.
Alternative Methodologies Proposed
The VACC has proposed alternatives to the ESC's current benchmarking methodology, including:
- A cost-of-service approach that would directly consider the actual costs faced by Melbourne operators
- Consideration of the recently implemented fee structure used in Western Australia for the Perth and Peel region
A fee structure that appropriately reflects the fixed operational costs of providing accident towing services would support the sustainability of this essential industry.
The VACC looks forward to continued engagement with the ESC to develop a regulatory framework that ensures the ongoing provision of safe, efficient and timely accident towing services for Victorian road users.
Background
The Essential Services Commission (ESC) is Victoria's independent economic regulator responsible for determining fees for accident towing, storage and salvage services in metropolitan Melbourne. In early 2025, the ESC released its draft report on accident towing fees, which proposed maintaining the current regulated fees and applying only standard indexation adjustments.
The ESC's draft decision included maintaining the productivity adjustment factor at 0.5 per cent and concluded that basic salvage services should not be subject to a determination under section 211 of the Accident Towing Services Act. The VACC's response addresses these draft recommendations and provides alternative approaches that reflect the industry's operational realities.
View VACC's full submission here.