Every cab owner in South Australia will get $30,000 as Uber is legalised

Photo: Pablo Blazquez Dominguez/ Getty Images.

South Australia has become the latest state to legalise ride sharing services, opening the gates for the likes of Uber and GoCatch to enter the market.

As a result, the local government is spending $34 million, paying $30,000 in compensation to each of the 1,137 taxi licence holders, funded by a $1 tariff on fares. Licence lessees will receive $50 a week compensation for up to 11 months.

On top of that, taxi fares in general will be increased, and a further 20% tariff will be added on Friday and Saturday nights.

Earlier this year NSW offered a $250 million package to compensate its taxi industry, which was also funded by charging an extra $1 levy on all ride share and taxi fares.

Rules around what types of cars can be used as cabs have also been relaxed, opening the door for smaller cars, such as a Toyota Corolla or Hyundai i30 to be used.

Taxi drivers will retain exclusive rights to hail passengers and ranks, and Uber will not be allowed at the airport.

The government will also be freezing new taxi licences for five years, which will cost the state budget around $23 million.

These changes will come into play from July 1 this year.

Before this, it wasn’t just ride sharing apps that were banned, but taxi applications as a whole, so other taxi only services such as Ingogo are now open for business in the state too.

Despite the changes, Uber still says there’s work to be done. While ride sharing has been legalised, much of the red tape in getting drivers on the service still remains.

It costs $45 to become a legally accredited driver in NSW, with the process taking just a few days. However, the anticipated costs and the length of time it is going to take for someone from Adelaide to become a part-time ridesharing driver is “far in excess of the cost and time” of other states Uber says.