NSW Government suspends licences of 40 UberX drivers

UBER may have more than a million fans in Australia but it can not escape controversy. The popular ride-sharing service is under attack from authorities yet again.

UBER Logo. To go with story by Peter Law. Taxi / Cabs / fares / Swan Taxis.

PEOPLE using UberX may have to wait longer for a ride after an ongoing stoush between the company and the Australian authorities took a turn for the worse today.

The NSW Government has suspended the licences of 40 Sydney drivers.

The director of safety and compliance at the NSW Roads and Maritime Service, Peter Wells, said ride-sharing services were illegal and the Government had to ensure compliance with regulations, reported the ABC.

However Uber, which says it has signed up a million Australian users, has fans in high places. In May, Prime Minister Malcolm Turnbull hailed the service as an example of how the economy could be more “agile” while consumer body Choice has said Uber is just as safe as regular taxis.

Uber driver Clint Thomas in Surry Hills, Sydney.

The controversy is focused on the UberX ride sharing service which enables private car owners, albeit with third-party insurance and GPS tracking, to offer lifts to the public via the Uber app bypassing cabs altogether.

“Taxi and hire car services in NSW must be provided by an operator accredited by Roads and Maritime, in a licensed and insured vehicle which is driven by an authorised driver,” Mr Wells said.

“If drivers continue to offer illegal ride sharing services — they will continue to risk registration suspensions and fines,” reported the ABC.

Mr Wells said that the drivers would be barred from using their vehicles for three months from September 30 and if the car was found on the road the owner could be slugged with a fine of up to $2200 for each offence.

Uber said in a statement that it was “shocked that the Roads and Maritime Services did not appear to show these drivers any due process”.

“We are reviewing the legal options to reverse this decision,” it said in the statement.

IS IT LEGAL?

Uber has said UberX turns car owners into small business people and allows them to earn extra income while providing a better service than cabs. But an enraged taxi industry has hit back and said UberX drivers undercut fares by avoiding about $50,000 in regulatory fees and are potentially unsafe.

Hundreds of angry taxi drivers and owners rallied outside the NSW Parliament earlier this month calling on the state government to ban ride sharing company UberX. Picture: Jim O'Rourke

Michael Jools from the Australian Taxi Drivers Association told news.com.au earlier this month that it wasn’t just UberX drivers who were acting against the law — Uber might be as well.

“I think Uber is unlawful because it is very much involved in the whole exercise. They say they are merely a technology platform providing an app that people use and that they have nothing to do with how it’s used.

“What we are trying to do is have the court declare that Uber is operating illegally, and therefore it must stop,” he said.

Attempts by Uber to have the case thrown out of court failed on Friday.

Uber is now fighting fires on multiple fronts. Earlier this year, the Australian Taxation Office ordered UberX drivers to charge GST, potentially leading to higher fares. Uber argued that, like many small business people, drivers shouldn’t have to pay tax on income below $75,000. The tax office disagreed and said UberX drivers were no different to cabbies and had to pay GST on all their fares.

LACK OF COMPETITION

But Uber has its backers.

A report for the Queensland Government by the Economic Policy Group, and obtained by Uber under right to information laws, said banning new entrants into the taxi market was costing Australians dear.

“Brisbane consumers were worse off by $40 million a year from restricting Brisbane taxi numbers,” the paper, which was given to the ABC, said.

“The damage to the Queensland economy from this kind of over regulation is easy to see and will continue to cause significant economic costs until the constraints on supply are removed.”

The Taxi Council of Queensland dismissed the report.

Tourism chiefs say market ‘disrupters’ like Uber and accommodation site Airbnb were essential to boost visitor numbers to Australia.

While, last week, a study by Choice showed Uber was safe, reliable and, in most cases, cheaper than cabs.

TAXI INDUSTRY ‘SCARED’

“It’s easy to see why the taxi industry is scared of Uber,” said Choice’s Tom Godfrey. “Not because of safety issues, but because of the threat to their profits and their outdated business model.”

Uber has said it’s keen for its services to be regulated — just not as regular taxis. Instead, it has suggested to the NSW Government that UberX drivers should face less onerous licence conditions in return for not hailing on streets or taking advanced bookings.

However, with the Uber app now a staple feature of many smartphones, the taxi industry is unlikely to give up without a fight.

The next battle looms in October when the NSW Government hands down the findings of a taskforce charged with investigating the future of the state’s taxi, hire car and ride sharing industry.

“We understand that new technology is disruptive but we believe there is a way forward that provides new economic opportunities for all drivers, including taxi drivers, and choice for riders who love the convenience of services like Uber,” an Uber spokesman told news.com.au earlier this month.

Originally published as NSW Government suspends licences of 40 UberX drivers