Transport for NSW has ruled out smartphone apps that allow motorists who are not taxi or hire-car drivers to receive money for offering lifts.
In response to a new low cost ''ride-sharing'' service offered by Uber, which allows non-taxi drivers to offer a taxi-like service, the state's transport department said on Wednesday all drivers needed to be accredited under the Passenger Transport Act.
This would rule out Uber's ride-sharing service as it currently operates, though not apps that make it easier for taxi customers to book an authorised cab or hire car.
''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,'' Transport for NSW said in a statement on Wednesday morning.
''Under the act, such services must be provided in a licensed taxi or hire car, by an appropriately accredited driver, authorised by Roads and Maritime Services.''
Those who operated a public passenger service in breach of the Passenger Transport Act faced prosecution and fines of up to $110,000, it said.
''However, these laws do not apply to, for example, a group of friends sharing expenses or a car-pooling arrangement between colleagues sharing a ride to the office.''
Despite Transport for NSW's statement, Uber Sydney general manager David Rohrsheim said he was confident Uber was building ''the safest, most reliable, most affordable transportation option'' for consumers.
In some instances Uber's ride-sharing service is up to 50 per cent cheaper for consumers than a traditional taxi. It makes money by taking a 20 per cent cut from the fare.
''We’ve had regular positive discussions with the NSW government for some time,'' Mr Rohrsheim said.
''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.''
On Sunday, Mr Rohrsheim told Channel Nine's Today Show the taxi industry copped ''a lot of criticism'' and had ''a lot of its own problems'' when asked about the NSW Taxi Industry's concerns over ride-sharing.
''We’re just here to offer an alternative choice,'' he said. A blog post by Uber's Australian team outlines why it believes its ride-sharing service is safe.
The NSW Taxi Council has called on the government to intervene and regulate the ride-sharing apps.
''This has to be dealt with before it gets out of hand,'' NSW Taxi Council chief executive Roy Wakelin-King said last week.
Until now, Uber has let only Australian users ride in taxis and private hire cars in Sydney and Melbourne. It only recently began quietly branching out into the ride-sharing market to let anyone ferry users around who is 24 years old, has their own car that has at least four doors and is a 2005 model or newer, has comprehensive insurance, no criminal record and a licence.
Transport for NSW's response follows a similar statement from the Victorian Taxi Service Commissioner, Graeme Samuel, who said the services didn't appear to be complying with Victorian law.
Last week, NSW Transport Minister Gladys Berejiklian and her department sent mixed messages over whether the ride-sharing apps were legal in NSW.
Ms Berejiklian's department said on Wednesday last week that NSW's Roads and Maritime Services had requested a meeting with Uber to discuss how the NSW Passenger Transport Act applied to the service, and how Uber would respond to its obligations under the act.
But in a radio interview on Thursday night, Ms Berejiklian seemed to concede there was no problem unless Uber called itself a ''taxi service''.
''You don't want to limit people's choice because, at the end of the day, it does come down to choice,'' Ms Berejiklian said on 2GB.
Already some US states have banned or are attempting to ban similar offerings. In Minneapolis, such services have been outright banned and drivers have been fined if found to be using them to pick up passengers; in Seattle they have been given the go-ahead, but only 150 drivers are allowed to be available at any one time per app. Meanwhile, laws introduced in California last year allow their use, but require companies behind them to have at least $US1 million ($1.08m) in public liability insurance. Since this insurance has been imposed, the apps have been adding $US1 ''safety'' fees on top of all fares.