Unions ACT and the Transport Workers Union New South Wales branch have told the government's review into Canberra's taxi industry that drivers working through on-demand application businesses should not be classed as contractors and should receive full workplace entitlements.

The calls come a month after the California Labour Commission made news around the world when it said some Uber drivers were not simply independent contractors and should be subject to oversight and protection by the booming company.

Uber already operates in cities including Sydney, Melbourne and Brisbane. Its popular UberX platform, which allows motorists to use their own car to pick up passengers, has recorded more than a million rides in Sydney.

However, Transport Workers' Union state secretary Michael Aird said Uber drivers were not guaranteed any level of income for their work and were not afforded entitlements or protections required under Australian law.

The company - which hopes to launch in Canberra by October - allows customers and drivers to connect via a smartphone app, costing as much as 50 per cent less than a standard taxi fare.

Drivers can choose when to work and pricing is adjusted based on peak demand time.

Mr Aird said Uber drivers were akin to casual employees and the taxi industry was dysfunctional as drivers suffered from low pay and poor conditions.

"A casual employee – at least in theory – has a similar capacity to accept or decline any particular shift," he said in a submission.

"The fact a person's work is ad hoc or contingent does not mean they are not an employee. It simply means that they are part of the trend toward increasingly insecure work."

He called for practical and straightforward enforcement under any changes initiated by the government, including for identification, rectification and prosecution.

The Canberra Taxi Industry Association said in February they welcomed innovation and competition to the Canberra market, as long as all service providers operated under the same regulatory requirements.

Unions ACT secretary Alex White said the arrival of ride-sharing businesses was unlikely to see "a sustained upswing in customer service" in Canberra and disruptive companies should still meet their responsibilities to workers.

"Far from being "innovative", companies like Uber are using a new technology to revive outdated and adverse employment relationships from the 19th century," Mr White said.

"Although Uber refers to drivers as "independent contractors", Uber drivers have few or none of the characteristics of a genuine independent contractor. A more appropriate term to refer to Uber drivers' and other "on demand" workers' form of employment is "on-hire employment services" where workers are covered by their employing company and work in a host organisation or on specific tasks."

He said the government should work with the industry to require training about drivers' legal rights and minimum conditions. He called for consideration of a new tribunal focused on the taxi and "on-demand" transport industries.

This month Uber policy director Brad Kitschke said the company was hopeful the right regulatory framework would be in place before it began operations in the ACT.

He said the proposed timeline could see the territory as the first jurisdiction outside the United States to introduce a regulatory framework for ride-sharing before it becomes available in the market.

Uber boss David Plouffe said the company hopes to create 20,000 jobs in Australia in 2015.