NSW-based ride-sharing giant Uber has been put on notice by a state government agency, which claims the company is running an illegal racket.

Taxi and hire car services in NSW must be provided by an operator accredited by Roads and Maritime, in a licensed and insured vehicle driven by an authorised driver, director of safety and compliance Peter Wells said.

So far, 40 suspension notices had been issued to offending Uber drivers, the ABC reported.

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Mr Wells warned the state government was cracking down on those “illegally” allowing their vehicles to be used.

“Thousands of dollars in fines have already been issued to drivers offering illegal ride-sharing activities and compliance actions will continue,” Mr Wells told the ABC.

“If drivers continue to offer illegal ride sharing services – they will continue to risk registration suspensions and fines.”

If a suspended vehicle is found on the road after October 1, the vehicle will be deemed unregistered and uninsured.

Penalties could include $637 for each offence, increasing to about $2,200 if heard in court, Mr Wells said.

The NSW Government established an independent taskforce to examine the future of the taxi and hire car industry.