Smartphone apps may be illegal: Australian state government

Added by on November 2, 2012

The state government of NSW warned on Friday smartphone apps that allow Australians to book private cars instead of taxis may be illegal. The warning comes amid the release of Uber, an app that connects private cars for hire with passengers, after it disrupting the US market.

Taxis work on a pay as you go model, where a passenger pays for the taxi based on distance traveled and time. Unlike taxis, private cars for hire must be booked in advance with a pre-arranged fare. Uber, and apps similar to it allow riders booked a private car for hire just minutes in advance of pick-up, putting the entire operation in a legal gray area. In addition, while Uber, and another app called Dash, post standard fares on their respective websites, fares can vary based on distance, speed, and time – similar to the way a taxi bills for services.

“Should a complaint be lodged against a driver or operator about the use of the equipment, Roads and Maritime Services has powers to investigate and prosecute drivers and operators for using this technology,” said a spokesman for Transport NSW.

Representatives of both Dash and Uber say they would not have launched without legal advice, adding their approach is sound.

Dash is owned and operated by an Australian firm and uses a business model a similar Uber, yet uses “a GPS tracking system and a series of algorithms” to work out pricing, said Romain Bonjean, a spokesman.

Bonjean denied using any form of metering similar to taxis, yet admitted regulations may need to change to accommodate the new apps.

Uber and Dash are testing the product in Sydney. The companies have had regulatory difficulties in some US cities.

The NSW government is considering whether to regulate taxi and private hire car apps.