Ride-sharing services such as UberX have been legalised in NSW, with regulatory changes taking effect tomorrow.
Under the new regulatory framework announced by the NSW government today, UberX drivers will need to obtain a hire car driver authorisation and have a business registration for their car. In addition, UberX drivers will undergo medical and criminal background checks.
Ride-sharing services will have to be booked through an app, as taxis will maintain exclusive control of hail and rank services. For passengers travelling to and from the airport, ride-share services won't be able to pick up or drop off at the taxi ranks. Sydney Airport will be in charge of the operational management of such services.
Western Australia is set to follow in making ridesharing services legal by next year, with drivers required to pay an annual fee and subject to police and medical checks.
How will pricing work?
Fares won't be regulated for any booked services, including taxis, however, the NSW government will continue to set maximum fares for taxis hired at a taxi rank or hailed off the street. For booked services, companies will set their own prices and customers will need to agree to the fare rate before the booking is confirmed.
Next year, a bill will be introduced into Parliament which will appoint a new specialist regulator that is able to hold the booking companies directly accountable for the safety of the services provided under their brand. The bill will also introduce compensation for taxi plate owners, which is expected to be a flat fee of $20,000. This compensation will be funded through a levy on all point-to-point transport providers, equivalent to $1 per trip for five years. Service providers will be able to decide whether or not they choose to pass on this cost.
Matt Levey, CHOICE director of campaigns and communications says, "This 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".
The government expects that by 2019, the reforms will deliver more than $30 million a year in red tape savings, and benefit consumers through shorter waiting times and more innovative services. Demand for point-to-point services is also expected to increase.
What is UberX?
UberX operates through the Uber app, linking up passengers with private drivers using their own cars. The app detects your location via GPS and connects you with the nearest available driver. The vehicle's approach can be tracked through the app and the driver's details are sent to the passenger. Payment is cashless and passengers enter their credit card details when signing up. If you need to cancel, you have up to five minutes after the driver accepts before you'll be charged a cancellation fee. Uber takes a 20% cut of the driver's fare.
CHOICE compared UberX services with taxis back in September and found that UberX was cheaper than a taxi around nine times out of 10 and that on average, taxis were 40% more expensive than UberX. We also found the UberX service to be safe and reliable.
This announcement makes NSW the second jurisdiction to legalise UberX, after the ACT did so in October. Meanwhile the legal status of the service in other states and territories remains in limbo.