Uber X to become legal in South Australia under laws introduced by Weatherill Labor Government

RIDE-sharing platform Uber is steam rolling ahead with its national legalisation agenda, with South Australia the next state flagging new laws.

RIDE-sharing service UberX and other app-based companies will be allowed to operate in South Australia from July 1 as part of sweeping reforms to the state’s taxi and hire car industry revealed today.

All passengers will be charged a $1 levy per ride to compensate taxi licence plate owners and drivers for allowing new entrants into the market. It will raise about $80 million over the next decade.

A new tariff, of up to 20 per cent, will also be introduced on Friday and Saturday nights when taxi drivers face high demand and often drunk or unruly passengers.

A general taxi fare increase will be imposed and new on the spot fines created.

Premier Jay Weatherill and Transport Minister Stephen Mullighan outlined the changes at a press conference at 11.30am.

They detailed the State Government’s long-awaited response to an independent review of the taxi and hire car industry, which was delivered in late February.

Cabinet approved the response on Monday.

The majority of changes will take effect by July 1, however some will require legislation to pass Parliament.

Mr Mullighan told The Advertiser he believed the changes struck “the right balance” to give passengers better service, open the market to new technologies and compensate existing operators.

Taxi drivers will retain exclusive rights to rank and hail passengers. Uber will not operate at the airport.

The Uber headquarters in San Francisco. Pictture: AP Photo/Eric Risberg

Owners will receive compensation of $30,000 per licence plate and licence lessees will receive $50 a week compensation for up to 11 months.

Drivers will benefit from the increased passenger fares.

Mr Mullighan said he will develop “significant” new on the spot fines for poor driver behaviour and vehicles which do not meet hygiene standards.

“If a driver does something serious enough or does something repeatedly... They’ll either get a substantial fine or their ability to participate in the industry will be removed,” Mr Mullighan said.

However, as forecast by The Advertiser, rules about the types of cars that taxi, hire car or Uber drivers can use will be relaxed.

These changes could see taxi services run out of smaller cars such as a Toyota Corolla, Mr Mullighan said, but they must have four doors.

As flagged in The Advertiser in February, Mr Mullighan will also draft legislation to reduce the credit card surcharge that taxi drivers can impose to a maximum five per cent of a fare.

There has been growing pressure on the Government to keep pace with progress interstate and open the local market to the app-based operator.

State Opposition Leader Steven Marshall last week flagged he would move to make UberX legal when Parliament resumed today by removing restrictions banning ride-sharing and giving the minister powers to allow new players into the market if they met a series of minimum standards.

At the time, Mr Mullighan accused Mr Marshall of making “policy on the run” and failing to consider the question of compensation.

Uber operates in more than 400 cities around the world, offering carpooling, ride-sharing and premium services.

The company uses a mobile phone application and geolocating technology to connect a customer to the nearest driver.

It is a cashless system enabling users to pay electronically through the app.

Its premium hire-care service, Uber Black, already operates in SA and the company has been pushing to commence its cheaper UberX service, which employs drivers using their personal vehicles as a taxi alternative.

Opposition Leader Steven Marshall with uberX partner Elizabeth Rylance. Picture: Tricia Watkinson

NSW and the ACT have legalised UberX.

In return, the NSW Government promised a $250 million package to compensate the taxi industry — funded by charging taxi passengers an extra $1 levy on fares.

Given concerns from SA taxi drivers and owners about the potential impact of a competitor, such as Uber, on their livelihoods it would be difficult for the State Government to ignore the precedent set by the NSW compensation model when allowing UberX into the market here.

Mr Mullighan has previously sent strong signals about the cost of catching a cab, describing the 10 per cent surcharge on paying through a Cabcharge terminal, used in most taxis, as “outrageous”.

The NSW and WA governments have passed legislation to cap surcharges at five per cent.

In January, The Advertiser reported that the Government was likely to consider measures to slash the surcharge on paying cab fares using a credit or debit card here.

In the ACT, the compulsory third-party insurance regulator has approved a new class of premiums for ride-share vehicles, such as those operated by Uber.

It also instituted a fall of as much as 13 per cent in rates for taxis, passenger cars and hire cars. The higher premiums for ride-share vehicles reflect the fact that they will spend more time on the road and will be used for commercial activity.

It is understood a similar model could be applied in SA.

The Queensland and WA governments have mandated audio recording in taxis in those states — a change SA could adopt to improve safety.

And there could be incentives offered to encourage “green” taxis, such as a discount on registration for more environmentally-friendly vehicles, which would fit with its aim of making Adelaide a carbon-neutral city.

MORE TO COME

Originally published as Uber X to become legal in South Australia under laws introduced by Weatherill Labor Government