UberX and other ride-sharing services have been legalised in New South Wales, with the State Government offering compensation to traditional cab drivers.
Pending criminal and care-safety checks, ride-sharing services will be made legal, 50 taxi and car hire regulations will be repealed, and a new regulator and commissioner will also oversee the industry.
To compensate taxi drivers, a $250 million “industry adjustment package” will be established.
New South Wales becomes the second jurisdiction in Australia to legalise Uber, after the ACT.
In a statement, NSW Minister for Transport and Infrastructure Andrew Constance said NSW needed to update its “out-dated” transport regulations.
“Customers, taxi and hire car operators, drivers and new entrants have all made clear they want change and today we are making it happen,” Mr Constance said.
Taxis will continue to have exclusive access to cab ranks and hail jobs.
“These reforms are expected to blow the doors of innovation wide open for ‘booked’ services, where customers can track their driver, provide direct feedback, hold them more accountable and choose from accessible price points,” Mr Constance said.
In a Facebook post, NSW Premier Mike Baird said the Government had to act on behalf of cab drivers.
“The thing that has made the taxi/ride-share situation difficult to manage is that, unlike other businesses facing disruption (say, video stores facing disruption from Netflix) the Government has sold and regulated taxi licence plates and has a responsibility to offer some protection for the mums and dads and investors who own these plates,” the statement said.
“We are helping consumers to win through having more choice in how they travel and simultaneously being fair to taxi owners as they transition into the future.”
The Government said the reform package was good news for the industry, with $30 million in reduced regulatory costs.
“By taking regulatory and cost pressure off the industry and unlocking more point-to-point services, we expect to create hundreds of new jobs over the next few years,” Mr Constance said.
“It’s important that we don’t forget those who have poured their savings into taxi licences over the past decades and ensure they get equitable assistance as this industry adjusts to changes in our economy.”
Uber has upset traditional models of taxi driving wherever it has established itself by means of an easy-to-use car-hailing smartphone application.
Taxi drivers have long campaigned against it, but Mr Constance said they should be well compensated in NSW by means of the $250 million adjustment package, to be funded from consolidated revenue and a temporary levy on point-to-point transport providers, equivalent to $1 per ride for a maximum of five years.
Taxi companies will have the option of passing this on to customers, but the Government said licence fees and other costs would be reduced.
Industry as we know it ‘destroyed’, Taxi Association says
Australian Taxi Drivers Association spokesman Michael Jools said the industry was “trying to focus on the positives”.
“It’s good in that we have now got a degree of certainty, but that certainty is that the industry as we know it has been destroyed,” he said.
Mr Jools said the compensation package was “nonsense” and would not apply to people such as base operators who are not plate owners.
“Base operators have invested millions in their cars and they’re going to suffer,” he said.
He said the Government seemed to be hoping that the fact taxi drivers were holding on to rank and hail would make the business sustainable.
“Rank and hail alone is not enough to make our industry serviceable.”
But he said the industry would try and focus on the positives.
“If we learn from this and take on the lesson of disruption we can get ahead and improve services to the passenger,” he said.
Uber applauded the Government’s “leadership”, claiming ridesharing was making Sydney more vibrant, better connected and also a more sustainable city.
“This important step forward is an incredible reflection of the way Sydneysiders have embraced ridesharing over the past 18 months,” the company said in a press release.