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It’s not legal, but will that stop Canberrans using Uber…?

By Mike Jeffreys - 3 December 2014 19

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My much travelled brother – who once said to me “I think I could organize tours of the trouble spots of the world” – commented on how we complain about bureaucracy and how it gets in the way but then described sitting in a restaurant next to a stinking open drain in some third world free for all and how it had made him think we’re better off with our rules and regulations even if our rulers and regulators seem to overdo it.

So is something like Uber the wave of the future?

I’m told that even though the service is illegal, that although there has not actually been one reported incident of anyone using it, the company is promoting heavily on social media in the Canberra region.

In case you haven’t caught up with Uber, it’s described as a ride sharing service which connects passenger with car and driver through a smartphone app.

It used by some hire car drivers, supposedly by some off duty taxi drivers but the real controversy revolves around private citizens who use their own cars.

Canberrans are presently being targeted with Facebook come-ons claiming private individuals can make $500 a weekend driving for Uber.

I see two angles to this: one is the actual practice of Uber and whether it’s really a good idea to get into a car with someone who has no special qualifications, insurance, security measures to guarantee you some measure of safety or an organization behind him/her to which you can take your grievance if things don’t work out as planned.

The other is the general principal of removing government restriction and letting the market find its way.

In August of this year, The Sydney Morning Herald reported New South Wales Minister for Finance and Services Dominic Perrottet as saying the Uber apps – part of what he called the “collaboration economy” – were a good thing for society.

He said “My view is that governments should not stand in the way of this change but seek to facilitate it.”
“As someone on the Liberal side of politics, we should welcome the sharing economy as something profoundly conservative.”

“This is the free market on steroids. It’s individuals, or businesses, seeking to make the best use of their existing assets, for a profit. It’s being an entrepreneur at a grassroots level. It’s a mix of technology, trust and low-cost options to effectively meet demand – and it’s all done without government intervention.”

Now being as how most everything in the great state of New South Wales is regulated to within 2.54 centimetres of its life, I find this laughable.

My immediate comment was to suggest that as Mr Perrottet is apparently such an out and proud evangelist for cutting back on government regulation and red tape, perhaps Sydney could do without zoning laws like – say – Houston.

It actually works pretty well for them there.

This from Bloomberg Businessweek:
Houston is well known as the only major U.S. city with no formal zoning code. Such a seeming lack of order is difficult to grasp by those unfamiliar with the area. The absence of a comprehensive land use code conjures up images of a disjointed landscape where oil derricks sit next to mansions and auto salvage yards abut churches. To some degree these anomalies exist, yet for the most part Houston is like any other large North American city.

What is unique about Houston is that the separation of land uses is impelled by economic forces rather than mandatory zoning.

Of course there is no way known that government in NSW at any level is going to surrender its say over what goes where when it comes to land use.

(Not counting corrupt dealings with developer mates of course).

Nor is it likely to my mind that the planned and regulated ACT is ever likely to take on Minister Perottet’s recommendations.

I can think of a number of reasons why that might be a very good thing (see comment from much travelled brother about life in the unregulated third world).

Even Mr Perrottet has two bob each way, saying “Even the freest of markets requires some regulation to function.”

But there are those who are very enthusiastic about Uber and Airbnb and Shortspace and other ventures which rely on the internet and social media to thrive – and thrive they have.

Bloomberg again: Bill Maris, the managing partner of Google Ventures, which is an investor in Uber, said the long-term market value of the company could be “$200 billion or more.”

Now that is big bucks and big bucks can buy a lot of influence, but it’s early days to start thinking about where that might lead.

For the moment I’m interested in hearing from anyone with grass roots Uber experience in the Canberra region.

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19 Responses to
It’s not legal, but will that stop Canberrans using Uber…?
Felix the Cat 9:41 am 08 Dec 14

So how is Uber different to someone giving say a work collegue a lift somewhere and sharing petrol costs?

frankie 3:11 pm 07 Dec 14

Uber drivers are rated, so you know that you are getting someone reliable when you pick your ride. WIth taxis, you don’t know who you are getting… it could be some card skimming drunk who just arrived in the area, for all you know.

The reality is that people will use the internet to find clever ways to dodge these legalities and band together in communities anyways, even if sites like Uber are shut down – for example, posing as Ride Share passengers but offering money (or being asked for a “donation” by the driver). Friends who know friends who know friends will come together… the connected economy will thrive regardless.

Go Uber!!

Devil_n_Disquiz 7:58 am 07 Dec 14

Felix the Cat said :

Not sure what “security aspects” are lacking? 99.9% of people* have mobile phones these days so if something untoward happened then either the driver or the passenger can call authorities/friends for help. Not sure what security features taxis have? Some have a perspex screen between the front and back seats; don’t think they still have 2-way radios anymore though the electronic gizmo they use to accept jobs may have a back-to-base “panic button” (?) but I don’t see that as being particularly useful if the taxi is 50km away from base when the incident occurs.
*statistic I just made up

Taxis have security cameras inside and outside. The MTData doubles as a two way radio, and as you alluded to, there is a back to base duress alarm button.

A_Cog said :

Umm, the actual taxi number plates are owned by fabulously wealthy financial institutions (like Macquarie Bank, for example!) and then rented out to drivers.

Umm..not here. Taxi plates in Canberra are perpetual plates meaning that they are owned by individuals. The exception to this is 900, 500 and I believe some 400 series plates which are owned by the ACT Govt and leased to operators. Plate owners ARE your ‘poor cabbie’ drivers…for the most part.

There is much more to consider in calculations when looking at the whole Uber V Taxi thing. Someone mentioned insurance in which taxis are paying in the order of $8000 a year for comprehensive insurance. Rego which taxis are paying close to $9000 a year of which a huge proportion is CTP. I’m going to bet my mother in law that Uber drivers won’t be paying anything close to this. Uber drivers will also save the $24000 in base fees and $2500 in workers comp a year too.

But,,don’t think I am an Aerial supporter. I’m not. I left them ages ago and went Independent. And quite frankly I could care less whether Uber starts in Canberra or not. Its not going to affect my business model one bit.

VYBerlinaV8_is_back 10:54 am 04 Dec 14

Looks like another example of the law not keeping pace with technology.

Mike Jeffreys 10:22 am 04 Dec 14

Not sure how “practice” became “practics”. I blame the hammer drill going full blast in the apartment next door.

Mike Jeffreys 10:17 am 04 Dec 14

Appreciate the feedback and will pursue this topic on radio program later this month, however for the record: Attorney General Simon Corbell’s office is quite clear that the practics under discussion is illegal in the ACT as it is in NSW. This from the SMH June 17 headlined NSW CRACKS DOWN ON UBER RIDE SHARING

The NSW government has begun cracking down on the “ride-sharing” component of the smartphone app Uber by issuing $2500 fines and threatening legal action against motorists who offer the service.

The crackdown by NSW’s Roads and Maritime Services follows similar action by the Victorian government in early May. It issued more than $50,000 worth of $1700 fines to drivers.

In one letter sent to an unidentified Sydney Uber driver and posted on the broadband forum Whirlpool, Roads and Maritime Services says it is in receipt of information that the driver “may be operating a public passenger service without the appropriate authorisation, accreditation and license”. Roads and Maritime Services confirmed to Fairfax Media that the letter was genuine.

“The information indicates that you obtain requests for travel through the low cost Uber X option on the Uber Australia Pty Ltd phone application,” the letter states. “The Uber X services are provided by unauthorised drivers in unaccredited and unlicensed vehicles.”

It goes on to say that Roads and Maritime Services views matters of this nature “very seriously” and quotes the Passenger Transport Act, which says fines of up to $121,000 can be issued.

“You are advised that legal action may be taken against any person found to be illegally providing public passenger services,” it says. “You are warned that if you are detected offering public passenger services in breach of the Act, then this will result in prosecution action.”

In a statement, a Roads and Maritime Services spokeswoman said motorists providing Uber ride-sharing services were “acting illegally” under the Passenger Transport Act and risked penalties.

“Investigations have determined while Uber is not breaching the Passenger Transport Act 1990 by offering the service, motorists transporting passengers for a fare are,” the spokeswoman said.

To date, five people had been issued with penalty notices of $2500, she said.

It comes as the chief executive of the Insurance Council of Australia, Rob Whelan, warned drivers and passengers may be exposing themselves to substantial financial loss if they are involved in a collision or cause property damage while using ride-sharing services.

“Any motorist considering providing a ride-sharing service should first discuss this with their insurer to check the impact this might have on their motor vehicle insurance policies, in particular third-party property or comprehensive car insurance,” Mr Whelan said.

An Insurance Council of Australia spokeswoman said it was unaware of any specific insurance products in Australia that covered ride-sharing.

Roy Wakelin-King, the chief executive of the NSW Taxi Council, which has been lobbying the NSW government to stop or regulate Uber’s ride-sharing service, said the insurance council’s warning raised issues for both the vehicle owner and the paying passenger.

“The list of problems arising around the world from the lack of proper regulations and controls over organisations launching ride-sharing services is growing,” Mr Wakelin-King said. “This includes public safety, insurance, ineffectual criminal background checks on drivers, exploitation of drivers, workers compensation and potential trade practices issues.”

Uber’s Sydney general manager, David Rohrsheim, has not responded to requests for comment.

Mr Rohrsheim has said previously that Uber drivers were backed by third-party liability insurance of up to $US5 million ($5.3 million) an incident, but refused to name the insurer.

watto23 9:44 am 04 Dec 14

The government doesn’t like it because they can’t charge a fortune for taxi plates.
The taxi plate holders don’t like it because they may have to cut their high margins.
The drivers are caught out, by losing fares and potential plate holders cutting their salary.

Its not the first industry that has failed to adapt to a more modern business model. Worst case Uber, may make the industry reform itself. Or they’ll just threaten to sue like the music and movie industries have and if that fails, donate to a political party to get legislation failed. Ah democracy hard at work to make sure the wealthy remain wealthy without having to work for it!

ozdownunder 10:40 pm 03 Dec 14

John Moulis said :

“It’s not legal”. But it’s not illegal either. There are no laws at all relating to it, a bit like the way porno videos were able to be imported and distributed for six years before 1984 when the X-rated classification came in.

Totally agree

John Moulis 7:43 pm 03 Dec 14

“It’s not legal”. But it’s not illegal either. There are no laws at all relating to it, a bit like the way porno videos were able to be imported and distributed for six years before 1984 when the X-rated classification came in.

dkNigs 3:02 pm 03 Dec 14

I pay less and the driver gets paid more. What’s not to like?

arescarti42 1:49 pm 03 Dec 14

I see two angles to this: one is the actual practice of Uber and whether it’s really a good idea to get into a car with someone who has no special qualifications, insurance, security measures to guarantee you some measure of safety or an organization behind him/her to which you can take your grievance if things don’t work out as planned.

I’m afraid you’re a bit misinformed.

Every Uber driver has commercial liability insurance and has undergone a background check, and you can take any grievances straight to Uber. Drivers can be barred from using the service if they aren’t meeting the company’s standards.

It’s not as though riding in a licenced taxi guarantees good standards anyway. Taxi drivers are often some of the most reckless on the road, and the vehicles themselves are often filthy and unsafe. I once had to physically hold the passenger door shut on a taxi in Sydney because the latch was broken, and there was nothing to stop it from flying open around corners.

As others have said, the Taxi industry essentially operates as a government sanctioned monopoly, allowing users to be charged rip off rates for crap service, and drivers to be paid appalling wages. The only ones who benefit are the likes of Cabcharge who are bleeding everyone else dry.

I hope Uber smashes them.

A_Cog 12:36 pm 03 Dec 14

zllauh said :

I guess the poor cabbies who have got their license and also the cost of having a taxi no plate needs to be taken into consideration.

My 2 cents.

Umm, the actual taxi number plates are owned by fabulously wealthy financial institutions (like Macquarie Bank, for example!) and then rented out to drivers. In recent years, taxi plate prices have blown through the $500,000 level in capital cities across Australia. In Ballarat (pop: 90,000), they are currently around $300,000. I’d reckon they’re closer to $500K here.

Uber devalues these highly-sought-after plates, posing a threat to plate owners (who are not ‘poor cabbie’ drivers). They are the ones making all the noise, scaring their drivers with the threat of unemployment.

Taxis are a shockingly uncompetetive market, dominated by dirty players. The ACCC agrees with me. One of the reasons Uber is growing so fast is because it can operate inside all the empty space which has been created in this lazy market, where big players put in as little effort as possible because they didn’t need to. But they do now! Cheaper to just run a scare campaign.

Go Uber, and go hard.

zllauh 11:53 am 03 Dec 14

I guess the poor cabbies who have got their license and also the cost of having a taxi no plate needs to be taken into consideration.

My 2 cents.

magiccar9 10:34 am 03 Dec 14

The only people with a problem around Uber are the businesses it competes with who have failed to adapt to the ever growing technological world. They complain about how illegal and unfair the system is, only because they were too shortsighted to adapt. Now they want a perfectly sustainable business to be shut down because “it isn’t fair” on them.

If someone wants to use Uber, they do so knowing, and accepting, the risks associated weighed against the benefits.

Felix the Cat 10:26 am 03 Dec 14

I’ve heard nothing but good reports about Uber. Cheaper fares, clean, well presented vehicles, courteous and well groomed drivers with a geographical knowledge of the district. What’s not to like?

Not sure about the comment “no qualifications”. The drivers (of both Uber and taxi) presumably have driver’s licences, what other “qualification” is required?

As far as insurance goes all registered motor vehicles have compulsory third party insurance that covers injuries to passengers and pedestrians in the event of a collision, though whether this CTP is still valid if the vehicle is being used in undeclared commercial business, is a yet untested technicality.

Not sure what “security aspects” are lacking? 99.9% of people* have mobile phones these days so if something untoward happened then either the driver or the passenger can call authorities/friends for help. Not sure what security features taxis have? Some have a perspex screen between the front and back seats; don’t think they still have 2-way radios anymore though the electronic gizmo they use to accept jobs may have a back-to-base “panic button” (?) but I don’t see that as being particularly useful if the taxi is 50km away from base when the incident occurs.
*statistic I just made up

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