Would you pay a random person to taxi you around? I did and this is what happened

On Tuesday night, a woman who usually delivers fast food to Sydney homes drove me from the Opera House to my apartment in Surry Hills for a measly $7.10. I didn't know this woman prior to her driving me home in the Suzuki Swift she owns. Rather I used a new feature in the taxi and private hire car app Uber, due to be rolled out to others soon, to request she pick me up.

"Keo", as she is known in the app, has been picking up dozens of people over the past five days while driving on Sydney's inner-city roads after responding to a job ad from Uber on Seek. Similar ads appear on Facebook, Gumtree and other sites for drivers in Sydney and other cities.

Uber Sydney general manager David Rohrsheim says Australians want "ridesharing".Credit: Louise Kennerley

Keo is not a licensed taxi driver, nor is her car a limousine with licensed hire car number plates. Instead she is a regular licence holder who has been vetted by Uber employees to ferry me around at "low-cost" rates, rates far lower than what a traditional Sydney taxi charges.

Until now, Uber, which has $US250 million in backing from Google, has only let Australian users ride in taxis and private hire cars in Sydney and Melbourne. It only recently began quietly branching out into the "ridesharing" market to let anyone ferry users around who is 24 years old, has their own car that has at least four doors and is a 2005 model or newer, has comprehensive insurance, no criminal record and a licence.

An advertisement that appears on Facebook for drivers.

Normally it costs me between $10 and $15 to go to from my home to the Opera House using a taxi, depending on traffic. Only paying $7.10 seems crazy, but there are a number of incentives for drivers. One of the main ones is they can use the service whenever they want. Another is they don't have to pay the excessive fees many taxi drivers do to lease a taxi if they don't own one.

Called "low cost" in Australia and "UberX" overseas, it has "infuriated" the local taxi industry, according to one taxi driver Fairfax Media spoke to, who says Sydney taxi drivers are questioning the legality of it and the fact it is largely unregulated by government.

The NSW Roads and Maritime Services says it has requested a meeting with Uber to discuss how the Passenger Transport Act applies to the new service, and how Uber will respond to its obligations under the act.

Already some US states have banned or are attempting to ban similar offerings, which have been dubbed "ridesharing" services. In Minneapolis, such services have been outright banned and drivers have been fined if found to be using them to pick up passengers; in Seattle they have been given the go-ahead, but only 150 drivers are allowed to be available at any one time per app. Meanwhile, laws introduced in California last year allow their use, but require companies behind them to have at least $US1 million ($1.08m) in public liability insurance. Since this insurance has been imposed, the apps have been adding $US1 "safety" fees on top of all fares.

The Suzuki Swift I was picked up in.Credit: Ben Grubb

It's unclear from Uber's legal terms how much a passenger will receive if they are hurt while riding in a low-cost Uber in Australia.

Uber Sydney general manager David Rohrsheim says every low-cost Uber ride is "backed by third-party liability insurance up to $US5 million per incident".

The fare from Surry Hills to the Opera House.

"With more options, consumers win, drivers win and Australia's cities win."

According to an ad for drivers wanting to use low cost, they must be "fun" and "outgoing", with "strong communication skills and great city knowledge" and "be willing to participate in a police background check".

The fare from the Opera House to Surry Hills.

In an email to some Uber users last Wednesday, Uber said the cars that picked you up would generally be "an economical vehicle such as a Toyota Prius, Honda Civic or Holden Cruze".

"Rides from North Bondi to the CBD could cost as little as $15, which is cheaper than a 333 bus ticket if you share the ride with three mates using our fare split feature," the email said.

Now, back to my ride.

Keo tells me she's been working from 6pm to 11pm most nights and earning up to $150 per night using Uber (excluding fuel costs). For the immediate future her income through Uber is high, as it adds a $15 bonus to every fare, regardless of whether it's for $5 or $50. How long this will last is unclear, as it's likely to be unsustainable for Uber, even though it takes a 20 per cent cut from fares.

The trip with Keo was the second one I had taken for the night. And although I got to my destination in one piece, the use of Google Maps on an iPhone that didn't have a cradle, and a driver who didn't know Sydney's streets all that well, meant the journey took longer than usual. At one point Keo was resting her phone on the passenger's seat and picking it up when needed.

An earlier trip from home to the Opera House with "Adam" that cost $6.33 – a little less than the trip with Keo due to the fact he normally drives a taxi and knows how to get around – was taken in a Toyota Rav4. I couldn't fault him on his driving, but an annoying moth flying around his car and the fact he was wearing a rugby top reminded me what "low cost" meant.

The "low-cost" option is expected to go public within weeks for the rest of Uber users in Brisbane, Melbourne and Sydney. This journalist – a big user of Uber – was not given early access to it on his own Uber app, but gained access to it via a friend's smartphone to test it out.

There were some other hiccups in using the service, which are expected in the early days of a small-scale rollout. When trying to get back from the Opera House, for example, there were no drivers available. But after a 10-minute walk around Circular Quay, Keo eventually became available and drove from North Sydney to the city to get me.

"Availability will be very limited at first," Uber said in its email last week.