Ride-sharing service Uber will be banned from operating in the Northern Territory, the NT Government has announced.

Key points: Cabinet shot down proposal to legalise Uber in the NT

Cabinet shot down proposal to legalise Uber in the NT Company says NT risks being left behind

Company says NT risks being left behind NT Taxi Council pleased, saying it would have destroyed the industry

The ABC can reveal Cabinet shot down the proposal and has decided not to make any changes to allow the company to operate legally in the jurisdiction.

The question of whether to make legislative changes to allow Uber to operate legally was under discussion ahead of the Government's final Commercial Passenger Vehicle Industry Review Report, obtained by the ABC.

Transport Minister Peter Chandler told the ABC Cabinet made the final call not to go ahead with changes to legislation.

"This was a Cabinet decision where we would stop Uber at the moment from coming to the NT," Mr Chandler said.

However the ABC understands some Cabinet ministers are in support of making ride-sharing services legal in the NT.

Uber has expanded across the globe over the past few years and has faced battles with regulators in many places where it has established itself.

The company had been in talks with the NT Government to try to reach an agreement on legislation that would allow it to operate legally in the NT.

NT 'risks being left behind'

Uber's Brad Kitschke was disappointed and said the Government could not ignore digital disruption reaching the Territory.

"I think the Territory does risk being left behind," Mr Kitschke said.

"And that's something Territorians will have to consider if they don't have a government that's willing to look at progressive changes, embrace competition."

There are moves to legalise Uber in NSW, Western Australia and the ACT.

The NT's taxi industry had strongly opposed the introduction of Uber and its competitors.

'Uber would destroy our industry'

NT Taxi Council executive officer Les Whittaker said he was pleased with the Government's decision to ban Uber.

"There's so many issues regarding Uber and the likes of Uber that worry me. Safety issues and those types of things," he said.

Taxi driver George Papantonakis said he was concerned Uber would not play be the rules the rest of the industry had to abide by.

"If Uber did come in it would destroy our industry," he said.

NT Taxi Council executive officer Les Whittaker is happy the Government will not be allowing ride-sharing company Uber to operate in the Northern Territory. ( ABC News: Nadia Daly )

The Commercial Passenger Vehicle Industry Review Report also contained several recommendations for the industry as a whole.

Mr Chandler said it was up to the taxi industry to boost its own standards to bolster itself against competition posed by Uber.

The report announced a "mystery shopper" initiative to measure standards, as well as the introduction of 13 new taxi licenses into the Darwin market to improve competition.

It also proposed reducing taxi electronic payment surcharges to a maximum of 5 per cent.

It proposed a code of practice as well as standards concerning safety, reliability and customer service the taxi industry would be required to meet.

Mr Chandler said the Government was concerned that introducing those reforms, along with new players in the market such as Uber, would hurt the existing taxi industry.

"It may just be a bridge too far to put these big reforms into an industry and at the same time accept that Uber might go into the NT," he said.

However, the Minister did not rule out the introduction of Uber at a later stage, and said the Department of Transport was reviewing interstate legislation.

"Companies like Uber may operate here one day. If and when they do let's make sure we've the right regulation," he said.

Uber has said it would persist with efforts to establish itself legally in the NT and at this stage is not looking at moving into the market without the Government's consent, as it has done in other jurisdictions.

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