Austrailan-owned Dash has soft-launched in Sydney, but is it blurring the lines between hire cares and taxis?
Smartphone apps allowing consumers to book private hire cars on demand instead of a taxi may be illegal, the New South Wales government says.
It's going to piss off a few people but when the dust settles people will realise that ultimately it's just offering more choices to Australian consumers for ground transportation.
Uber is launching in Sydney after disrupting the US market.
They are different to taxi booking apps such as GoCatch, Ingogo, myTaxi and Taxi Pro because rather than using licensed taxi drivers they use private hire vehicles. Unlike taxis, private hire vehicles must be pre-booked (pick-ups off the street are not allowed) and in that booking process the fare must be agreed, according to the Passenger Transport Act.
But industry insiders say Uber and Dash are operating at the very least in a legal grey area because they can be booked minutes in advance of pick-up and while they list standard fares on their site, the prices vary based on the distance travelled, speed and time.
For instance in Sydney, Uber charges $8 for a base fare and then $3.25 per kilometre at speeds over 18km/hour and $1.25 per minute at or below 18km/hour. A sample fare from the CBD to Bondi is $47, while it costs $23 to go from Kings Cross to Surry Hills.
"The use of any technology to work out fares based on speed or time by a hire car driver operator is an offence," a Transport for NSW spokesman said.
"Should a complaint be lodged against a driver or operator about the use of the equipment, Roads and Maritime Services has powers to investigate and prosecute drivers and operators for using this technology."
The Taxi Council of Queensland chief executive Benjamin Wash also implied some of the apps were breaking the law by saying the "apps operate outside of the regulated framework and in some cases are illegal". He did not specify which ones were illegal.
Andrew Campbell, co-founder of taxi booking app GoCatch, said apps such as Uber and Dash meant the distinction between a taxi and a private hire car was blurred.
"The regulator and everyone is now looking at what it means to be a taxi and what's the difference between a taxi and a hire car and should there be a difference at all," he said.
Both Dash and Uber claim they would not have launched without legal advice saying their business was sound.
Dash, owned and operated by an Australian firm, uses an almost identical business model to Uber and spokesman Romain Bonjean said the company uses "a GPS tracking system and a series of algorithms" to work out pricing.
"The charging works on an average speed and time, every time you go above 20km/hour we charge by the kilometre and every time you go under 20 kilometres/hour we charge by the minute [plus flagfall]," he said.
Mr Bonjean strongly denied using any form of metering as in a taxi, but admitted regulations may need to change to accommodate the new apps, which weren't around when regulations were being drafted.
"It's going to piss off a few people but when the dust settles people will realise that ultimately it's just offering more choices to Australian consumers for ground transportation," said Mr Bonjean.
He said Dash was targeting the premium end of the market and for the extra comfort of a limousine passengers would pay about 50 per cent more than a taxi fare. Since the app tracks the entire journey, there was built-in protection against the customer being ripped off, he said.
Uber and Dash are testing the product in Sydney before a broader rollout. Uber has launched in 18 cities mostly in the US but recently expanded to London, Paris, Toronto, Vancouver and Amsterdam. The company has had regulatory difficulties in some US cities and recently had to pull services from New York.
"We are in a testing phase now to discover what Sydney needs," Uber's Australian boss David Rohrsheim said. "We've hired an all-Aussie team, and will manage all Australian operations from Sydney."
The NSW government is now considering whether to regulate taxi and private hire car apps.
Hamish Petrie, founder of taxi booking app Ingogo, said because taxi plate leases were so much more expensive than a hire car license (about $35,000 a year versus $8000 a year), regulations needed to change as the technology evolved.
"When this technology is blurring the boundaries between the two there's going to have to be some equilibrium then between the taxi license and hire car license," he said.
"Taxi licenses have to go down or hire ones have to go up because it's unfair on a taxi driver or someone operating a taxi to then have a hire car competing against them on a lower cost model."