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NSW cracks down on Uber ride-sharing

The NSW government has begun cracking down on the "ride-sharing" component of the smartphone app Uber by issuing $2500 fines and threatening legal action against motorists who offer the service.

The Uber app allows any motorist – not necessarily a licensed taxi or hire-car driver – to receive money for providing lifts, in addition to offering authorised taxi and private hire-car services.

Under fire: An Uber driver demonstrates the ride-sharing service in Tokyo, Japan.
Under fire: An Uber driver demonstrates the ride-sharing service in Tokyo, Japan. Photo: Bloomberg

The crackdown by NSW's Roads and Maritime Services follows similar action by the Victorian government in early May. It issued more than $50,000 worth of $1700 fines to drivers.

In one letter sent to an unidentified Sydney Uber driver and posted on the broadband forum Whirlpool, Roads and Maritime Services says it is in receipt of information that the driver "may be operating a public passenger service without the appropriate authorisation, accreditation and license". Roads and Maritime Services confirmed to Fairfax Media that the letter was genuine.

Warning: Part of the letter sent to a Sydney Uber driver.
Warning: Part of the letter sent to a Sydney Uber driver. 

"The information indicates that you obtain requests for travel through the low cost Uber X option on the Uber Australia Pty Ltd phone application," the letter states. "The Uber X services are provided by unauthorised drivers in unaccredited and unlicensed vehicles."

It goes on to say that Roads and Maritime Services views matters of this nature "very seriously" and quotes the Passenger Transport Act, which says fines of up to $121,000 can be issued.

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"You are advised that legal action may be taken against any person found to be illegally providing public passenger services," it says. "You are warned that if you are detected offering public passenger services in breach of the Act, then this will result in prosecution action."

In a statement, a Roads and Maritime Services spokeswoman said motorists providing Uber ride-sharing services were "acting illegally" under the Passenger Transport Act and risked penalties.

"Investigations have determined while Uber is not breaching the Passenger Transport Act 1990 by offering the service, motorists transporting passengers for a fare are," the spokeswoman said.

To date, five people had been issued with penalty notices of $2500, she said.

It comes as the chief executive of the Insurance Council of Australia, Rob Whelan, warned drivers and passengers may be exposing themselves to substantial financial loss if they are involved in a collision or cause property damage while using ride-sharing services.

"Any motorist considering providing a ride-sharing service should first discuss this with their insurer to check the impact this might have on their motor vehicle insurance policies, in particular third-party property or comprehensive car insurance," Mr Whelan said.

An Insurance Council of Australia spokeswoman said it was unaware of any specific insurance products in Australia that covered ride-sharing.

Roy Wakelin-King, the chief executive of the NSW Taxi Council, which has been lobbying the NSW government to stop or regulate Uber's ride-sharing service, said the insurance council's warning raised issues for both the vehicle owner and the paying passenger.

"The list of problems arising around the world from the lack of proper regulations and controls over organisations launching ride-sharing services is growing," Mr Wakelin-King said. "This includes public safety, insurance, ineffectual criminal background checks on drivers, exploitation of drivers, workers compensation and potential trade practices issues."

Uber's Sydney general manager, David Rohrsheim, has not responded to requests for comment. 

Mr Rohrsheim has said previously that Uber drivers were backed by third-party liability insurance of up to $US5 million ($5.3 million) an incident, but refused to name the insurer.

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