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Uber users to be hit with taxi tax

CHOICE welcomes the NSW Government's move to legalise ride-sharing but is disappointed to see consumers funding taxi compensation

17 December 2015

Consumer advocacy group CHOICE has welcomed the NSW Government's move to legalise ride-sharing services such as UberX by bringing them under regulation, a move that will come as an early Christmas present for revellers looking for another option to get home.

The move follows the ACT Government's decision to legalise ride-sharing services last month and an investigation by CHOICE comparing UberX with taxis, that found the ride-sharing service to be reliable, with a range of safety features, and nine times out of ten cheaper than taking a taxi by up to 40%.

"We welcome the NSW Government's decision to legalise ride-sharing services. It is another clear win for common sense and stands to increase competition into the point-to-point passenger market in NSW," says Matt Levey, CHOICE Director of Campaigns and Communications.

"However, all point-to-point rides including Uber and cabs will face a $1 per trip levy to fund taxi licensee compensation. This taxi tax will see all consumers pay more to compensate an industry that refused to innovate or improve its customer service.

"In the long term, the reforms will ideally offer more choices for consumers when trying to get from A to B which are safe and competitive but it's disappointing to see all consumers pay extra as a gift for taxi licensees.

"We hope other jurisdictions will rapidly legalise innovation and not outlaw competition," says Mr Levey.

NSW is the second jurisdiction in Australia to regulate the controversial ride-sharing service, UberX.

Under the changes, ride-share drivers will need hire car driver authority, which costs $45, will need to register their vehicle for business use and undergo the necessary criminal and driving history checks. Vehicles will also need to be checked for safety and be fully insured.

"Importantly, Uber will also be held corporately responsible if something goes wrong, a measure the popular ride-sharing service has resisted in other markets.

"It is also good to see some of the regulatory costs reduced for taxis, which should further help to promote competition," Mr Levey says.

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