Uber legal in NSW, taxi owners to be compensated

UBER officially became legal at midnight, but a $1 per-trip levy will be used to compensate rival taxi drivers.

Uber Driver Clint Thomas

RIDE-sharing service Uber became legal at midnight in NSW after the state government officially gave it the green light.

But a $1 per-trip levy will be used to compensate rivals in the taxi industry.

NSW Transport Minister Andrew Constance hailed the legalisation move, saying the state “will have a new transport economy” that drives down the cost of travel for passengers.

“People will have more choice, they will have better services, and better value when it comes to the point-to-point market,” Mr Constance said,

“Overall you will see downward pressure on fares.”

Taxi drivers, who have been bitterly opposed to the move, will receive compensation in the form of a cash payment to taxi plate holders.

The perpetual owners of taxi plates, about 5800 people, will receive a $20,000 payment for the plate. Multiple plate owners will receive a maximum of $40,000.

Uber driver Clint Thomas will now be able to drive passengers legally but will have to pay a licence fee and undergo criminal checks and regularly get his car checked.

A further industry compensation fund of up to $142 million will be used to pay licensees who are facing “hardship” as a result of the changes, because they only bought plates recently.

The total industry fund is budgeted at $250 million.

“Consumers have moved with technology,” Mr Constance said. “It’s — time for ­industry and government to move in the same way.”

More than 50 taxi and hire car regulations have been axed, leading to a $30 million reduction in industry costs.

Both taxi and Uber drivers will also have to pay the government a $1 levy per trip for a maximum of five years to fund the compensation package.

Uber drivers will pay a ­registration fee of $45 and will be subject to criminal and safety checks.

Taxi plate owners will be compensated for the reduction in the value of their plates. Picture: Craig Greenhill

Taxis will retain the exclusive right to pick up passengers from ranks and the street.

The changes apply to Uber and all ride-sharing providers, such as Lyft and Sidecar.

Mr Constance said the NRMA was also considering offering a ride-sharing service.

WHAT YOU MIGHT NOT KNOW ABOUT UBER ...

■ Uber is a car ride-sharing service back by Google. Passengers use the app to find and catch a ride with one of its drivers.

■ Just about anyone can be a driver — even taxi drivers, but also serviced cars and ordinary motorists.

■ The upside for passengers is cheaper fares — when you use an ordinary cab, your fare has to help cover some pretty exxy cab licences.

■ Between January 2013 and the end of 2014, Uber’s market share grew more than 700 per cent.

■ As of a year ago, there was $12 spent on cab fares for every $1 spent on Uber fares.

■ Average fare comparisons show you might pay $14 with Uber to go from Hyde Park to Newtown as opposed to $23 in a cab. From Bondi to Surry Hills might be $19 in Uber and $32 in a cab. From North Sydney to Sydney Airport = $31 Uber, $51 cab.

■ In NSW, a taxi licence can cost $400,000, and the average driver makes about $10 an hour after costs.

■ In San Francisco, where Uber first ran, average trips in cabs have dropped by 65 per cent.

■ In October, a Uber driver was accused of raping a British tourist in Vaucluse.

Uber driver Deepak Chugh at the Uber HQ, the ride-sharing service has been given the green light but under several conditions.

Originally published as Uber legal in NSW, taxi owners to be compensated