Sydney's Ubers Are Set to Become Legal and More Expensive

The NSW Government has announced Uber will become legal, regulated, and probably more expensive from midnight tonight.

by Chris Shearer
Dec 17 2015, 4:15pm

New South Wales is officially set to become Australia's second state to legalize Uber, by introducing new regulations for the ride-sharing service and lifting red tape for taxis.

These changes will kick into effect from midnight tonight. From then on Uber drivers will have to pay a license fee, as well as undergo police checks and regular safety inspections of their vehicles. Taxis, on the other hand, will continue to get exclusive rights to ranks and airports, while drivers will also be compensated for devaluation of their plates to the tune of around $20,000 [$14,000 USD]. This is expected to lower the cost of fares across the NSW taxi industry.

"It's time for industry and government to move the same way," wrote NSW Transport Minister Andrew Constance in a press report, adding that the new reforms are expected to "blow the doors of innovation wide open for booked services."

Uber Australia and New Zealand general manager David Rohrsheim has also welcomed the changes writing, "ridesharing is not only revolutionizing the transportation status quo but also helping make Sydney a more economically vibrant, better connected, and more sustainable city."

Rumors of possible changes began in November. This was when Sydney's Daily Telegraph revealed that a host of reforms would be introduced by the end of 2015. At the time Premier Mike Baird threw cold water on the December timetable, but today's announcement is likely to be seen as an early Christmas present for both Uber and the taxi Industry. Taxi companies and motoring organizations have been long demanding action on the unregulated ride-sharing industry, justifying change with the notion of a level-playing field.

"It's not a level playing field today," National Roads & Motorists' Association President Kyle Loades previously told VICE. "Despite taxis having exclusive rights to airports and taxi ranks, I think it's seven or $8,000 [$5,700 USD] a year to register a car for a taxi, and a $1,000 [$700 USD] for Uber. So this is an un-level playing field that needs to be addressed."

Others weren't so sure. "It won't be a completely level playing field," said Matt Grundoff, senior economist at The Australia Institute. "Taxis are still likely to have some perks that Uber drivers won't. Things like exclusive use of taxi ranks for example, which are particularly important for airport runs."

ACT became the first state to legalize Uber and other ride-sharing services in October, announcing a host of reforms designed to balance out the industry. The problem for ACT taxis is that Uber still costs considerably less. A report by the Canberra Times found that Ubers were about 34 percent cheaper even with new regulations, citing inescapable costs that come with taxi uniforms and security cameras.

The question in NSW is how the new fees associated with regulation might affect current and potential Uber drivers. If the cost of compliance is too high for Uber it may see a number of drivers leave. "If it was a few thousand, like a couple of thousand, maybe I can do it, but if it was like a taxi license, nah," says Sameer, who works part time as an Uber driver in Sydney. "For a part time job it's too much."

What effect this would have remains to be seen. If Uber lost a large percentage of its part time drivers, it may use surge pricing more often to ensure there are enough drivers on the road. Your Saturday night Uber could regularly end up costing twice the fare of a taxi.

But this prospect, or even the pairing of Uber prices to taxis as has been done overseas, doesn't seem to bother Uber users in Sydney contacted by VICE.

"I think the price of UberX definitely makes it more popular with people in my demographic," explained 26-year-old Uber user Justin Wolfers. "But if you were to tell me that all taxis are now equipped with the same app at the same price I would jump for joy."

To him the price isn't the main drawcard for Uber; it's the way their system works. He praises the security of the Uber payment system, which provides some buffer against dodgy drivers, and then there's the fact specific drivers are accountable for collecting specific passengers, rather than just someone is coming. "These features shouldn't be overlooked," says Justin. "They rule."

Laura Ban, who uses Uber between five and ten times a week, agrees that these benefits override the costs. She says she'd continue using Uber if it became the same price as taxis just for the other features.

"Perhaps [regulating ride-sharing] will push the taxi industry to lift its game," she said. "But to be honest, I think most Uber users have given up on any meaningful innovation in that industry completely."

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