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Uber is coming to Canberra. Will you use it?

By Kim Fischer - 31 August 2015 41

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If you are a regular taxi user, there’s a good chance you’ve heard of Uber, the upstart company that is threatening taxi industries all over the world.

Already operating in Sydney, Melbourne, Brisbane, Perth and Adelaide, Uber hopes to start operating in Canberra by October, with 1000 people already expressing interest in becoming drivers.

Uber works by providing two smartphone apps: one for riders and one for drivers. Riders request a ride, and drivers indicate their availability to provide a ride. Uber provides three options: UberBlack, a luxury hire care service; UberTaxi, a request for a licensed cab; and UberX, to request a “regular” car.

It is UberX that has caused the most consternation among the taxi industry and some pundits, since these cars are operated by “ordinary” people. Uber has always maintained that it is not a taxi service, but an “on-demand ride sharing” service.

Despite most governments declaring UberX to be illegal as it was launched, Uber has simply paid the fines and blocked the mobile phones of undercover government investigators attempting to bust these “unregistered” drivers.

There is a legitimate case for concern about UberX. As Andrew Leigh, Member for Fraser wrote:

The regulatory issues surrounding Uber are varied and complex. They include the need to ensure public safety both for those in the car and on surrounding public streets, and the lack of transparency about the company’s pricing model and relationship with its drivers. Then there’s the question of insurance for mixed private and commercial use of a car, and the challenge of ensuring that drivers pay tax on what they earn.

Despite this, Uber’s aggressive tactics seem to be working. Attempts to prosecute UberX drivers in the courts are mostly failing. The WA, NSW, and ACT governments are conducting reviews into the taxi industry. Uber itself has indicated that it wants to operate under a regulated model.

None of Uber’s tactics would matter if the service offered wasn’t one that people wanted, but given that more than 11 per cent of Sydney residents used UberX or another ride-sharing service in 2014, including politicians, demand doesn’t appear to be an issue.

The question seems to be when, not if, UberX will be allowed to operate legally in Australia. What are the concerns that should be addressed? UnionsACT have submitted that Uber drivers should be considered employees and not contractors:

Although Uber refers to drivers as “independent contractors”, Uber drivers have few or none of the characteristics of a genuine independent contractor. A more appropriate term to refer to Uber drivers’ and other “on demand” workers’ form of employment is “on-hire employment services” where workers are covered by their employing company and work in a host organisation or on specific tasks.

A Californian court recently agreed with this point of view, finding that UberX drivers were employees of the company. This was, in part, because “Uber controls the tools driver use, monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars”.

Not that the taxi industry is a haven of happy drivers either. UnionsACT noted in their same submission that:

The taxi industry for decades has grossly exploited drivers. In 2011 the average hourly rate for a taxi driver was approximately $10 per hour, far below the minimum wage. Reports into the industry found it was rife with poor working conditions, unacceptable risks to safety and low levels of remuneration.

It’s important for governments to protect workers against exploitation, but much like technology has massively changed the way we consume music and videos, it’s very difficult to put the genie back in the bottle. There aren’t easy solutions here. And if the taxi industry thinks it has problems now, just wait until driverless cars become common – possibly as little as 10 years away.

Will you use UberX when it launches in Canberra in October?

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41 Responses to
Uber is coming to Canberra. Will you use it?
dungfungus 9:34 am 01 Sep 15

HenryBG said :

dungfungus said :

If I hire an Uber car and it is involved in an accident because of negligence by the driver/contractor involving injury to me, who accepts responsibility for the compulsory third party personal injury claim?
Also, if I use the family car to transport fare-paying passengers I would have no accident insurance because the car is only insured for private purposes.
The same circumstances apply to motor vehicle registration.
And if I got into a Uber car knowing there was no CTP cover, how would this be seen in a court trying to determine a personal injury settlement?
Only experts should respond.

It seems to work everywhere else in the world – Uber makes sure its drivers have insurance. They are also tracked by Uber far better than current taxi companies keep track of their drivers.

I’ve used Uber, and it is the way of the future. Artificial monopolies such as Canberra Cabs cannot survive democracy in action.

Thanks for that Henry.
What appears to be happening to the taxi industry is like what happened to the 1 hour photo kiosks when digital photography arrived.

rosscoact 6:16 am 01 Sep 15

I’ve used them and although I may have been lucky, each experience was fantastic. Far better cars, drivers who knew where they were going (unlike the taxi driver I had the other day, who didn’t know how to get from Crace to Gungahlin town centre), great and effective booking system.

The taxi monopoly is dead in its current form, although it may not know its dead yet. Its a shame for those people who paid into be a part of the monopoly, great for consumers.

HenryBG 11:19 pm 31 Aug 15

Zultan said :

Presumably, when Uber revolutionises the taxis out of business no one will complain at the tax rises in other areas to keep the hospitals and schools funded.

Presumably, artificially inflated taxis fares are not responsible for keeping the hospitals and schools funded.

HenryBG 11:17 pm 31 Aug 15

dungfungus said :

If I hire an Uber car and it is involved in an accident because of negligence by the driver/contractor involving injury to me, who accepts responsibility for the compulsory third party personal injury claim?
Also, if I use the family car to transport fare-paying passengers I would have no accident insurance because the car is only insured for private purposes.
The same circumstances apply to motor vehicle registration.
And if I got into a Uber car knowing there was no CTP cover, how would this be seen in a court trying to determine a personal injury settlement?
Only experts should respond.

It seems to work everywhere else in the world – Uber makes sure its drivers have insurance. They are also tracked by Uber far better than current taxi companies keep track of their drivers.

I’ve used Uber, and it is the way of the future. Artificial monopolies such as Canberra Cabs cannot survive democracy in action.

rubaiyat 8:41 pm 31 Aug 15

Zultan said :

Uber == another opportunity to send your Australian earned dollars offshore to a US corporation.

Presumably, when Uber revolutionises the taxis out of business no one will complain at the tax rises in other areas to keep the hospitals and schools funded.

No-one complains about cars keeping the hospitals full. What’s the difference?

Zultan 8:11 pm 31 Aug 15

Uber == another opportunity to send your Australian earned dollars offshore to a US corporation.

Presumably, when Uber revolutionises the taxis out of business no one will complain at the tax rises in other areas to keep the hospitals and schools funded.

dungfungus 6:49 pm 31 Aug 15

If I hire an Uber car and it is involved in an accident because of negligence by the driver/contractor involving injury to me, who accepts responsibility for the compulsory third party personal injury claim?
Also, if I use the family car to transport fare-paying passengers I would have no accident insurance because the car is only insured for private purposes.
The same circumstances apply to motor vehicle registration.
And if I got into a Uber car knowing there was no CTP cover, how would this be seen in a court trying to determine a personal injury settlement?
Only experts should respond.

Paul Costigan 6:21 pm 31 Aug 15

There is another solution as is happening in New York.

Taxis services in Australia need to join the 21st century – they need to adapt – and adopt an app.

http://www.wired.com/2015/08/arrow-ny-taxis-app/

basketcase 4:00 pm 31 Aug 15

The industry needs to be deregulated, licence fees returned to owners and let the market sort it out.

Or maybe the government should be even handed, charge $2000 pa to be a teacher, $10000 pa to be a surgeon etc. Why slug taxi owners to run a business?

NZ deregulated in 1989, the world didn’t come to an end and a competitive taxi industry exists there.

rubaiyat 1:53 pm 31 Aug 15

Licence taxis > Restrict numbers > Artificially raise the price of taxi licences > > Make taxis extremely expensive > Make a virtual Monopoly of CabCharge > CabCharge pays hefty political donations to both major parties > Repeat

VYBerlinaV8_is_back 1:09 pm 31 Aug 15

arescarti42 said :

The Taxi industry deserves what’s coming to them.

Agree completely. Taxis are too expensive for you actually get.

The traditional taxi model just doesn’t seem to be working any more, at least not from the perspective of paying users.

dungfungus 11:58 am 31 Aug 15

arescarti42 said :

dungfungus said :

Does anyone know what Uber will charge for the same service?

Around $35-$50 from Tuggeranong to the airport according to Uber’s fare calculator. Obviously that will depend on where exactly in Tuggeranong you’re coming from, and the time of day (demand).

The Taxi industry deserves what’s coming to them.

Does that include your luggage for an overseas trip for two and more importantly, can they fit that luggage in their cars? (won’t fit in a Toyota Prius for example).
I note you say there are some variables (demand) so this will not suit everybody.
Sounds like the taxi version of “renewable energy”.

arescarti42 11:30 am 31 Aug 15

dungfungus said :

Does anyone know what Uber will charge for the same service?

Around $35-$50 from Tuggeranong to the airport according to Uber’s fare calculator. Obviously that will depend on where exactly in Tuggeranong you’re coming from, and the time of day (demand).

The Taxi industry deserves what’s coming to them.

dungfungus 9:55 am 31 Aug 15

rommeldog56 said :

When it costs about $60 to get from Tuggeranong to the airport, one way, then something has to be done about the cost of “regular” taxis in the ACT.

For too long, the taxi co-op + the ACT Gov’t has been piling on costs on top of costs, legislative requirement on top of legislative requirement to the extent that cab’s are almost unaffordable in Canberra for the average punter.

I agree that it hurts to pay $65 each way from Tuggers to the airport but it is a fair distance.
When using the Monaro highway it rarely takes more than 15 minutes though and imagine how long it would take to travel the same distance in other cities and the cost of that?
I was quoted $65 to have a parcel delivered by a courier, from Fyshwick to Tuggers.
Does anyone know what Uber will charge for the same service?

rommeldog56 7:53 am 31 Aug 15

When it costs about $60 to get from Tuggeranong to the airport, one way, then something has to be done about the cost of “regular” taxis in the ACT.

For too long, the taxi co-op + the ACT Gov’t has been piling on costs on top of costs, legislative requirement on top of legislative requirement to the extent that cab’s are almost unaffordable in Canberra for the average punter.

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