Outlaw taxi service UberX has again been attacked by the nation’s regulators for not playing by the same rules as established services.
The smartphone app that connects unregulated drivers to willing customers has been officially classified as a taxi service, despite the company’s loud protestations.
On Wednesday, the tax office gave UberX drivers two-and-a-half months to start paying GST – a 10 per cent consumer tax – just like the rest of the industry.
The company has threatened to challenge the ruling.
This is but one of many legal setbacks for the US-based venture, which continues to grow in popularity in Australia, almost as if consumers were oblivious to its many flaws.
Here’s why it’s best avoided, for now.
Anyone can do it
UberX calls itself “ride-sharing”, but is in fact a taxi service without strict controls on its drivers.
Any person over the age of 21 can become an Uber driver without having to adhere to these checks and balances placed on regular taxi drivers:
• register with a state agency,
• have their vehicle routinely checked for roadworthiness,
• have zero blood alcohol at all times,
• and be subjected to regular criminal history checks.
It is illegal in most states
State governments in New South Wales, Victoria, Queensland and Western Australia have declared UberX to be illegal.
Drivers can be pulled over by taxi authorities and issued with infringement notices.
Ten of the app’s drivers in NSW have been told to front court, and Perth driver Sukhwinder Singh has been charged with operating a vehicle without taxi plates.
You aren’t recorded for safety
Taxi cabs contain video cameras as a way to protect both the driver and the passenger. UberX cars do not.
In WA, Mr Singh was also charged with not fitting his vehicle with necessary surveillance equipment.
It’s prices are unpredictable
Sometimes UberX costs less than a taxi, sometimes it costs far more.
The app uses a supply-and-demand system called ‘peak pricing’, which can result in significant price hikes.
Now that GST will (or should be) charged, users should expect a slight price increase overall.
Limited or no service for people with disabilities
The taxi industry is required to provide ramps and larger vehicles to accommodate passengers with special needs. UberX is not.
It’s a false comparison
Much of the criticism directed at the taxi industry, used as proof of UberX’s superiority, are criticisms of the outdated methods of hailing a cab — either by phone, at the curb or in a taxi rank.
UberX solves oft-cited problems of unreliability, cost and customer dissatisfaction, but is far from the first, or the best, service to do so.
Aussie companies Ingogo and GoCatch also provide smartphone apps, with consistent pricing, more (taxi licensed) drivers and none of the concerns over safety and legality.
It robs low-paid taxi drivers
An UberX driver can earn as much as $30,000 a year, the ABC has estimated.
Melbourne taxi drivers spoken to by The New Daily claim they are lucky to be paid minimum wage. Nor are they protected by the national minimum wage, as most are employed as sub-contractors who earn money on a commission basis.
It’s just another multinational
The taxi industry has “serious concerns” that its foreign competitor is using the same tax minimisation strategies as Google and Apple to funnel some or all of its profits back to the US.
“Uber is a huge private company that has come to Australia for one purpose — to make money,” said Australian Taxi Industry Association (ATIA) chief executive Blair Davies in a statement.
“The ATO needs to urgently close each and every one of the loopholes that allow local operations to use overseas holding companies to give them free rides paid for by Australian taxpayers,” Mr Davies said.
But there’s a twist. It’s not all bad…
The rise and rise of UberX has been a much-needed wake-up call for an “outdated” industry that was failing to meet customer expectations, said a spokesman for consumer group CHOICE.
“Anyone who has spent hours waiting for a cab in the middle of the night or watched a light being switched off as a cab approaches will be all too familiar of the failings in the taxi industry,” CHOICE spokesman Tom Godfrey told The New Daily.
“The task for governments is to ensure consumer protection and safety, whether that is in a taxi or ride-sharing. It’s not to prop up outdated, legacy business models.
“No one should be operating outside of the law, but our laws need to keep pace with the peer-to-peer economy, and right now, they seem to be lagging behind.”
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