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.
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.
Normally it costs me $10 to $15 to go to or from the Opera House from home, depending on traffic. Only paying $7.10 seems crazy, but there are a number of incentives for drivers. One of the main ones is that they can use the service whenever they want. Another is that 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, the new option has “infuriated” the local taxi industry, according to one taxi driver Fairfax Media spoke to, who said Sydney taxi drivers were questioning the legality of it and the fact it is was largely unregulated by government.
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, new laws introduced in California last year allow their use, but require companies behind them to have at least $US1 million in public liability insurance. Since this insurance was imposed, the apps have been adding $US1 “safety” fees on top of all fares.
It’s unclear from Uber’s legal terms how much a passenger would receive if they were hurt while riding in a low cost Uber in Australia.
Uber Sydney general manager David Rohrsheim said every low cost Uber ride was “backed by third party liability insurance up to $US5 million per incident”.
“With more options, consumers win, drivers win and Australia’s cities win.”
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. Only recently did it begin 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.
Drivers wanting to use low cost must also be “fun” and “outgoing”, with “strong communication skills and great city knowledge” and “be willing to participate in a police background check”.
In an email to some Uber users last Wednesday, Uber said the cars that pick you up will 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 6-11pm 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 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 that this person normally drives a taxi and knew 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 new “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.
Comment is being sought from the NSW Transport Minister over the legality of the service.
Low cost ‘taxi’ service a danger to the public, furious taxi council says
Sydney taxi drivers and the NSW Taxi Council are furious with a new initiative launched by US tech start-up Uber that allows car owners to use their own vehicles to taxi people around for a fee.
The NSW Roads and Maritime Services has requested a meeting with Uber to discuss how the NSW Passenger Transport Act applies to the new service, and how Uber will respond to its obligations under the act. The RMS said it was “looking forward to Uber’s response”.
This has to be dealt with before it gets out of hand.
NSW Taxi Council chief executive Roy Wakelin-King
Until now, the $US250 million ($270 million) Google-backed Uber has only allowed users to ride in taxis and private hire cars in Sydney and Melbourne. But now it has started to branch out into the “ridesharing” market, allowing anyone to ferry users around in Brisbane, Sydney and Melbourne provided they are at least 24 years old, have insurance, a licence, no criminal record, and own a four-door car that is no older than a 2005 model.
An ad that appears on Facebook for drivers.
“This has to be dealt with before it gets out of hand,” NSW Taxi Council chief executive Roy Wakelin-King said.
“We have an organisation that is asking people to take on faith a [taxi or hire car] booking system that has no regulatory checks or balances.”
There were no vehicle or driver background checks by the NSW government, he said.
“[It] represents a clear risk to the public.”
Mr Wakelin-King said the Taxi Council had asked the NSW government to investigate.
“We will also be warning passengers about the risks of using this service,” he said.
The service is currently only available to select users but is due to be launched publicly within weeks. Called “low cost” in Australia and “UberX” overseas, the company takes a 20 per cent cut from each fare.
The new option on the Uber smartphone app has infuriated the taxi industry, according to one Sydney driver, who said drivers were questioning the legality of the service and the fact it was largely unregulated.
Drivers have signed up by responding to Uber job ads on Seek, Facebook and Gumtree. The job ads stipulate that drivers wanting to be part of the low cost service must be “fun and outgoing”, with “strong communication skills and great city knowledge”, and “be willing to participate in a police background check”.
One of the drivers Fairfax Media spoke to said she used to be a fast-food home delivery driver.
Uber’s legal obligations are unclear, such as details of insurance and passenger injury compensation.
Uber Sydney general manager David Rohrsheim said every low cost ride was backed by third party liability insurance up to $US5 million per incident.
Already some US states have banned or are attempting to ban similar businesses.