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Would you pay a random person to taxi you around? I did and this is what happened

Date

Ben Grubb

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Uber Sydney general manager David Rohrsheim says Australians want "ridesharing".

Uber Sydney general manager David Rohrsheim says Australians want "ridesharing". Photo: Louise Kennerley

On Tuesday night, a woman who usually delivers fast food to Sydney homes drove me from the Opera House to my apartment in Surry Hills for a measly $7.10. I didn't know this woman prior to her driving me home in the Suzuki Swift she owns. Rather I used a new feature in the taxi and private hire car app Uber, due to be rolled out to others soon, to request she pick me up.

"Keo", as she is known in the app, has been picking up dozens of people over the past five days while driving on Sydney's inner-city roads after responding to a job ad from Uber on Seek. Similar ads appear on Facebook, Gumtree and other sites for drivers in Sydney and other cities.

Keo is not a licensed taxi driver, nor is her car a limousine with licensed hire car number plates. Instead she is a regular licence holder who has been vetted by Uber employees to ferry me around at "low-cost" rates, rates far lower than what a traditional Sydney taxi charges.

An advertisement that appears on Facebook for drivers.

An advertisement that appears on Facebook for drivers.

Until now, Uber, which has $US250 million in backing from Google, has only let Australian users ride in taxis and private hire cars in Sydney and Melbourne. It only recently began quietly branching out into the "ridesharing" 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.

Normally it costs me between $10 and $15 to go to from my home to the Opera House using a taxi, depending on traffic. Only paying $7.10 seems crazy, but there are a number of incentives for drivers. One of the main ones is they can use the service whenever they want. Another is they don't have to pay the excessive fees many taxi drivers do to lease a taxi if they don't own one.

Called "low cost" in Australia and "UberX" overseas, it has "infuriated" the local taxi industry, according to one taxi driver Fairfax Media spoke to, who says Sydney taxi drivers are questioning the legality of it and the fact it is largely unregulated by government.

The Suzuki Swift I was picked up in.

The Suzuki Swift I was picked up in. Photo: Ben Grubb

The NSW Roads and Maritime Services says it has requested a meeting with Uber to discuss how the Passenger Transport Act applies to the new service, and how Uber will respond to its obligations under the act.

Already some US states have banned or are attempting to ban similar offerings, which have been dubbed "ridesharing" services. 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.

It's unclear from Uber's legal terms how much a passenger will receive if they are hurt while riding in a low-cost Uber in Australia.

The fare from Surry Hills to the Opera House.

The fare from Surry Hills to the Opera House.

Uber Sydney general manager David Rohrsheim says every low-cost Uber ride is "backed by third-party liability insurance up to $US5 million per incident".

"With more options, consumers win, drivers win and Australia's cities win."

According to an ad for drivers wanting to use low cost, they must be "fun" and "outgoing", with "strong communication skills and great city knowledge" and "be willing to participate in a police background check".

The fare from the Opera House to Surry Hills.

The fare from the Opera House to Surry Hills.

In an email to some Uber users last Wednesday, Uber said the cars that picked you up would generally be "an economical vehicle such as a Toyota Prius, Honda Civic or Holden Cruze".

"Rides from North Bondi to the CBD could cost as little as $15, which is cheaper than a 333 bus ticket if you share the ride with three mates using our fare split feature," the email said.

Now, back to my ride.

Keo tells me she's been working from 6pm to 11pm most nights and earning up to $150 per night using Uber (excluding fuel costs). For the immediate future her income through Uber is high, as it adds a $15 bonus to every fare, regardless of whether it's for $5 or $50. How long this will last is unclear, as it's likely to be unsustainable for Uber, even though it takes a 20 per cent cut from fares.

The trip with Keo was the second one I had taken for the night. And although I got to my destination in one piece, the use of Google Maps on an iPhone that didn't have a cradle, and a driver who didn't know Sydney's streets all that well, meant the journey took longer than usual. At one point Keo was resting her phone on the passenger's seat and picking it up when needed.

An earlier trip from home to the Opera House with "Adam" that cost $6.33 – a little less than the trip with Keo due to the fact he normally drives a taxi and knows how to get around – was taken in a Toyota Rav4. I couldn't fault him on his driving, but an annoying moth flying around his car and the fact he was wearing a rugby top reminded me what "low cost" meant.

The "low-cost" option is expected to go public within weeks for the rest of Uber users in Brisbane, Melbourne and Sydney. This journalist – a big user of Uber – was not given early access to it on his own Uber app, but gained access to it via a friend's smartphone to test it out.

There were some other hiccups in using the service, which are expected in the early days of a small-scale rollout. When trying to get back from the Opera House, for example, there were no drivers available. But after a 10-minute walk around Circular Quay, Keo eventually became available and drove from North Sydney to the city to get me.

"Availability will be very limited at first," Uber said in its email last week.

10 comments

  • And does the driver void their insurance by being paid for the transport?

    Commenter
    Marika
    Location
    Sydney
    Date and time
    April 23, 2014, 3:17PM
    • Theoretically, yes, if the car has private registration and insurance and IF the insurance company finds out.

      Commenter
      Big IF
      Location
      Sydney
      Date and time
      April 23, 2014, 4:15PM
    • It would only be fair that these drivers also pay $5000+ CTP that taxis are required to pay.... better yet, bring the prices down for Taxi drivers - that is fair! RMS - You need to get on this pronto!

      Commenter
      Louise
      Location
      Sydney
      Date and time
      April 23, 2014, 4:28PM
    • point...

      Commenter
      inatorpor
      Location
      in a taxi queue
      Date and time
      April 23, 2014, 6:59PM
  • Brilliant. A 'taxi' service charging what regular taxis should charge and what's more they're readily available. Might just take my first taxi ride in 5 years..........

    Commenter
    Magnus
    Location
    Abbotsford
    Date and time
    April 23, 2014, 3:27PM
    • Just imagine no cabs - only Uber cars. Life will be perfect. Even better: a car sharing app that allows commuters to link up & network. Why are people waiting at bus stops & taxi ranks while multiple lanes of cars pass by, end to end, in a continuous convoy and, driverless cars are on the way so we will soon be able to app a robot car at nominal expense (someone else can pay for the gas)

      Commenter
      BEES KNEES
      Location
      WOOLLOOMOOLOO
      Date and time
      April 23, 2014, 6:03PM
    • Yep - I really hope this takes off, not because I'll use it but because I want to see the rent-seekers from the taxi industry destroyed and the govt return to charging a decent price for plates.

      There's no reason why a taxi driver shouldn't be able to earn a decent wage if you take away the monstrous taxi plate repayments that are factored into cab rental (to the driver) and the extortionate network fees.

      Cut fares to half what they are now, run the networks via competing app companies, reduce plate costs to $5000 and hey presto - more people using cabs.

      Commenter
      Get a Grip
      Date and time
      April 23, 2014, 6:12PM
    • I caught two Uber taxis in San Diego last week. The first was an UberX small black Mercedes in immaculate condition. We were offered bottles of water. The journey was pleasant and the guy even refused the proffered tip. The second trip was an UberX Prius with the same experience. Both 15-20 minute trips cost $6-$8 each, which was below the expected cost. And both taxis got to us in 5 minutes and we tracked it in with our app. Then we got out of the taxi, the journey was paid for already and and I had the receipt pop up on my phone within a few minutes.

      For the third cab ride however, a taxi company vehicle off the rank, was in a filthy rattly state, windows broken, and the guy charged us almost twice the going rate (as we later found out). Reminded me of the cab that took me home from the airport.

      Uber wins hands down. It was a stunning difference and that's how it should be. I will definitely support it.

      Commenter
      bleebs
      Location
      Melbourne
      Date and time
      April 24, 2014, 6:11PM
    • BEE KNEES has it right - a simple zero?-cost way of reducing the wasteful single-occupant curse of Sydney commuting whilst improving travel times for bus users and cutting down overcrowding on buses. Can't wait!

      As for the insurance "issue" - it's time insurance companies got that a passenger is a passenger, nothing more and nothing less. They are all the same. I might give you a lift as a friend or out of the kindness of my heart - there is no excuse for voiding my cover and refusing to pay damages in the latter without a huge premium. STOP GOUGING!.

      Commenter
      Johnd
      Location
      Sydney
      Date and time
      April 25, 2014, 10:40AM
  • Great idea! Of course it will be swallowed up and shut down within months by bureaucratic nonsense.

    Commenter
    Aza
    Date and time
    April 23, 2014, 3:34PM
    Comments are now closed
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