Digital Life

Uber snubs NSW government's position on ride-sharing as Backseat app postpones launch

The taxi and private hire car app Uber will continue to offer low-cost "ride-sharing" services despite the NSW government saying that ride-sharing apps require licensed vehicles and drivers.

And two more ride-sharing apps are entering the Sydney market: Backseat and RideSurfing. Backseat was due to launch on Friday but its co-founder Alex Ducros said on Thursday afternoon that the launch would be postponed because of the NSW government's latest position on ride-sharing.

Uber Sydney general manager David Rohrsheim says Uber ride-sharing isn't banned.
Uber Sydney general manager David Rohrsheim says Uber ride-sharing isn't banned. Photo: Louise Kennerley

"Unfortunately we have taken the decision to postpone the launch of Backseat in Sydney," Mr Ducros said.

"We will monitor how existing ride-sharing services are treated and wait for further clarification from Transport NSW."

Another ride-sharing service targeting Sydney, called Backseat, had planned to launch on Friday
Another ride-sharing service targeting Sydney, called Backseat, had planned to launch on Friday 

Mr Ducros acknowledged ride-sharing operated within a "grey area" of the law.

News Corp reported on Wednesday that the company would launch on Friday. Backseat's domain name was registered on October 17. 

Advertisement

The co-founder of RideSurfing, Manutea Dupont, said it would launch "soon". It began recruiting drivers on Facebook on April 4 and on MyCareer.

Meanwhile, Uber's Sydney general manager David Rohrsheim denied ride-sharing was banned in NSW.

RideSurfing is due to launch in Sydney "soon".
RideSurfing is due to launch in Sydney "soon". 

"Despite what [Wednesday's] press releases from the NSW Taxi Council and the [Roads and Maritime Services] might suggest, Uber has not been 'banned' by anyone and continues to operate. Support among both drivers and riders is stronger than ever," Mr Rohrsheim said.

The NSW government re-iterated on Wednesday that all ride-sharing drivers needed to be registered under the Passenger Transport Act. The government is currently reviewing the act.

An ad that appears on MyCareer for RideSurfing.
An ad that appears on MyCareer for RideSurfing. 

Asked whether it planned to allow ride-sharing services under a future version of the act, to be legislated this year, a spokesman for Transport for NSW said: "Taxis must be licensed, with authorised drivers using the taxi meter. None of these requirements will change."

This would mean there would be no future for Uber's ride-sharing service or other apps like Backseat and RideSurfing, under which fares are generally cheaper than regular cabs.

The NSW government says apps that allow ordinary motorists to ferry around others need to comply with the law.
The NSW government says apps that allow ordinary motorists to ferry around others need to comply with the law. Photo: Steve Lunam

But other services offered by apps such as Uber, GoCatch and ingogo that make it easier for people to book licensed cabs or hire cars with licensed drivers would be promoted under the new act.

Motorists carrying passengers that are not licensed to do so face fines of up to $110,000.

Victorian Taxi Services Commissioner Graeme Samuel supports apps that improve competition but says Uber needs to comply ...
Victorian Taxi Services Commissioner Graeme Samuel supports apps that improve competition but says Uber needs to comply with the law. Photo: Jesse Marlow

A spokeswoman for Roads and Maritime Services said the department had "received allegations Uber has breached the Passenger Transport Act and is investigating".

"If there are found to be breaches, companies and individuals can be pursued as appropriate," the spokeswoman said.

A message that appeared on the Uber app on Wednesday evening.
A message that appeared on the Uber app on Wednesday evening. Photo: Ben Grubb

Mr Rohrsheim's comments came as Uber launched on Wednesday night its low cost ride-sharing service, now dubbed UberX, to everyone who uses Uber in Sydney. It had previously offered the service under the name "low cost" to a select number of Uber users.

The NSW Taxi Council welcomed the NSW government's view.

"Ride-sharing services are operating outside the requirements of the Passenger Transport Act and therefore pose an unacceptable risk to the public," NSW Taxi Council chief executive officer, Roy Wakelin-King, said.

"This is not about competition; it is about a level playing field. The taxi industry recognises that it has to provide a service that the public has confidence in and that it must keep working on improving that service," he said.

Asked about regulatory issues, Mr Dupont said RideSurfing was focused on its launch and would provide details then.

Victoria welcomes ride-sharing if checks met

In contrast to the NSW government's view, Victorian Taxi Services Commissioner Graeme Samuel said there could be a place for ride-sharing if drivers were properly licensed and had been through checks.

"What we want to do is to facilitate competition and we see Uber as a source of competition," Mr Samuel said. "But it needs to be competition that is on grounds to protect the public interest."

But he said the current way Uber was operating in Victoria was against the law.

Mr Samuel said "compliance activities" had detected a number of unlicensed drivers and that appropriate action would be taken against them.

If ride-sharing operators wanted to continue in Victoria, Mr Samuel said motorists offering the services would not have to be classified as taxis in Victoria. They could instead be classified as hire cars, for which licence conditions have been relaxed in the past few years.

He said drivers would have to use registered commercial passenger vehicles, and have passed the relevant tests.

"There are a lot of things we can accommodate in this area in terms of licence fees, drivers," he said.

In Victoria, a private hire car operator does not need to own cars that fall within the luxury car tax as in NSW, and only needs to purchase a one-off licence for $40,000 that covers unlimited vehicles.

Despite the willingness to allow ride-sharing, Mr Samuel was still disappointed with Uber's approach in Victoria.

"I was giving a speech the other day to a group of corporate affairs executives about how to deal with regulators," Mr Samuel said. "And I must say when I give this speech the second time around, which will happen very soon, I will be using this as a very good example of how not to do it."

Mr Samuel will meet with two fellow commissioners on Friday to discuss the commission’s position on Uber.

"That will form a policy position on some of these issues and give some directions to the Taxi Services Commissioner staffers as to what needs to be done," Mr Samuel said.

"But as far as I'm concerned, if there is a breach of the law it will have to be dealt with. In the meantime, the open invitation has been there to Uber to come and talk to us."

46 comments

Comment are now closed