NSW Government Bans Cheaper, Non-Taxi Ridesharing App, Uber Low Cost

Uber, the smartphone app that allows people to bypass taxi booking systems for cabs and hire cars, is set for a showdown with the NSW Government over the introduction of its ride-sharing program, Uber Low Cost.

Uber has been testing the discount ride (known as Uber X in other international markets) in Sydney over the past fortnight, infuriating the taxi industry because it enlists non-taxi plate cars and drivers and undercuts the industry.

The only criteria for drivers involved is that they are at least aged 25 and driving a fully insured four-door car less than 9-years-old.

The fare is 88 cents/km, around 40% of the standard taxi rate of $2.14km. A fare quote from Parliament House to the airport is just $15.20. The train fare from the CBD to the airport is $16.40.

Uber has already been offering a 40% discount to users who book taxis with them during “offpeak” (10am and 5pm weekdays), and planned to replaced that discount with Uber Low Cost.

But following uncertainly around the legality of the service, Transport for NSW issued a statement today effectively banning the service saying “the law is clear and has not changed”.

“If a NSW driver is taking paying members of the public as passengers, the driver and the vehicle must operate in accordance with the Passenger Transport Act,” the release said.

That means drivers must hold an official taxi or hire car license to be accredited. Anyone breaching the act by carrying passengers face prosecution and fines of up to $110,000 the release warned.

The statement said the laws do not apply to friends sharing expenses or car pooling rides to the office.

The release also warned that any taxi booking service, including apps, must comply with the passenger transport legislation “or risk losing their authorisation to operate as a booking service”.

But Uber boss David Rohrsheim indicated the company planned to press ahead with the roll out of Low Cost.

“We’ve had regular positive discussions with the NSW Government for some time. We know they are watching this ride-sharing trial very closely, and they will be very interested to hear the feedback from customers. Early feedback from drivers and passengers has been overwhelmingly supportive,” he said.

“Ride-sharing is a new innovative concept that is finding rapid adoption around the world. The NSW Passenger Transport Act – which was written in 1990 – couldn’t possibly have taken into account ubiquitous use of mobile phones, let alone smartphone apps.

“Riders and drivers in NSW are flocking to the Uber platform precisely because we are solving a problem that has stood for decades – the inability to get a safe, reliable ride when and where needed. We’re confident that Transport NSW will stand up for consumers and drivers.

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