NSW follows the ACT in legalising Uber

uber banner

On 17 December 2015, the NSW Government’s Transport department announced something with huge ramifications for the taxi industry and partygoers around the state – ridesharing services, of which Uber is by far the most prominent, are now legal.

The legalisation and subsequent regulation of the ride-sharing economy will also be accompanied by marked changes to the existing taxi industry, chiefly in the form of compensation for licensing costs and exclusive rights to certain pick up locations.

NSW follows the ACT, which was first to legalise Uber in October 2015.

So what are the pros and cons of this decision, and what will it mean for taxis, Ubers and their customers in the long run?

Before we get down to the ramifications, here are the key takeaways: Uber and all other ridesharing services are now completely legal, and Uber drivers will now be subject to authorisation, business registration and new regulations as implemented by a new regulatory body and commissioner responsible for the transport economy.

Taxi companies, meanwhile, will see over 50 regulations and requirements removed, saving the industry an expected $30 million each year. Furthermore, the NSW Government has allocated $250 million over the next five years to compensate taxi drivers for the expensive license fees they have already paid – around $400,000 in NSW. This works out to around $20,000 per taxi license plate for the several thousand taxi owners in the state.

Importantly, taxi drivers will still have the exclusive right to pick up customers from taxi ranks and to be hailed on the street, as well as exclusive access to Sydney Airport. The new reforms apply only to ‘booked’ services, whereby the increased competition should drive down prices and increase innovation in the way people book services and give feedback.

So what do all of these changes mean? First of all, it means positive changes like the ones mentioned above, whereby increased competition will increase service quality and decrease prices. In the short term however, taxi prices are likely to increase, at least a little, as the government plans to fund the compensation package through a levy of around $1 per trip for the next five years.

The repealing of so many regulations is also good for the taxi industry, which should see a relaxing of ridiculously high licensing fees and other associated costs, thereby making taxi driving a more viable profession. The legalisation of Uber, furthermore, creates a fully legitimate occupation for many everyday Aussies, in addition to being a side job as it is currently viewed by many people.

All in all, these new reforms seem like a smart move by the NSW Government for both the ridesharing and taxi industries, as well as for the state’s economy as a whole.

Share this article