Uber: Sharing the Love; Regulating the Ride

Oct 1, 2015
Reading Time: 2 minutes
Written by Dominic Woolrych

Canberra has made a name for itself as the first capital city in the world to regulate ride sharing. The reform places Canberra on the global map for legislating this billion dollar tech company. So far, UberX has faced fierce opposition around the world and within Australia. Yet, ACT’s legal reform will likely pave the way for a worldwide movement for regulating this (‘agile’) innovation.

The new scheme involves changes for both taxi drivers and Uber drivers. UberX drivers will have to be registered and accredited; they will also have to undergo police and vehicle safety checks. UberX drivers are required to pay a $50 accreditation fee and $100 licence fee per year.  Simultaneously, taxi license fees will decrease from $20 000 per year to $5 000 per year by October 2016. Taxi drivers maintain the monopolistic right to be hailed and to pick up from taxi ranks.

Striking a balance

The ACT government’s new scheme is an attempt to factor in both sides of the equation. On the one hand, UberX has over 1 million users in Australia. It is unlikely customers will return to traditional taxi services which is deemed generally less reliable and more expensive. UberX also stands more broadly for the sharing economy movement including Airbnb, BlaBlaCar and WeWork. To introduce a facilitating legal framework is to encourage innovation, perhaps even prepare for the future.

On the other hand, there has been ongoing pressure from taxi unions, right up until this morning’s taxi strike in Canberra. They point to Uber’s absence of training, safety, insurance and tax evasion. More fundamentally, it may severely impact the amount of work available to them. The ACT government purports to introduce further requirements in response to these contentions, like property and third party insurance.

Not so fast…

The ACT government’s regulations follow NSW’s suspension of 40 UberX riders just last month. These drivers will be off the roads for a period of three months as the Roads and MaritimeServices Authority has found them to be uninsured for any road usage. Onlooking UberX drivers say they are not affected by these decisions and will continue operating.

The Australian Taxation Office has further released guidance for UberX drivers requiring them to register for GST before 1st August. The decisions are being challenged by Uber. In light of these recent developments, the ACT government’s legislative reform may come as a surprise. In fact, it is a move in the opposite direction.

The move forward

However, ACT is not the only State embracing ride-sharing. The Victorian government is currently preparing to regulate UberX. The taxi industry injects $200 million a year into ‘state and federal coffers’ and employs 17 000 Victorians. Further, Daniel Andrew, Victoria premier says technology must be accompanied by an efficient and cooperative legal system. Regulating UberX is but a first step in that direction.

Let us know your thoughts on Uber and the ACT’ government’s reform by tagging us #lawpath or @lawpath.

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