Uber looks set to win the fight to operate legally in New South Wales, but the trade off could be higher prices.
The Daily Telegraph reports that in response to an inquiry into “point to point” transport in NSW, the state government will announce that the low-cost ride sharing service UberX will be legalised as early as next month.
Currently UberX drivers are breaking the law, but the ride sharing service has flourished in spite of this. In the second half of 2014 alone, 11 per cent of Sydneysiders used the service.
Uber said in May that in the year since UberX launched in Sydney, one million trips had been taken.
So what will change?
According to the Daily Telelgraph, Uber will pay a licence fee and taxi owners will receive compensation for losing “exclusive” access to the market.
Taxis will still be the only ones allowed to use ranks and pick up passengers hailing from the street.
Under the reported change, Uber drivers will have to purchase licences, and will not be licensed if they have a criminal record.
There will also be more regular safety checks for vehicles.
UberX in Sydney has a base fare of $2.50 plus 40 cents per minute or $1.45 a kilometre. The minimum fare is $8, and if you cancel your ride, it’s a $10 deduction.
— Flip Prior (@FlipPrior) November 22, 2015
Uber splits that fare between the company and the driver, and have said that 80 per cent goes to the driver. The company says that some of the rest of that money is used to meet regulatory costs imposed by governments. “A large portion goes to cover variable expenses within the service. These expenses include payment processing, payment fraud, refunds, customer support, dispute resolution, cellular handsets and service fees for the drivers, and local regulatory efforts,” a blog written by Uber board director Bill Gurley says which would suggest that any increased cost for drivers would be absorbed by Uber. After all, price is a huge part of the attraction of UberX. The Australian Capital Territory was the first Australian jurisdiction to legalise the service that launched in October. The company says UberX fares are 25 per cent cheaper than a taxi.