Perth's taxi industry is facing a full-frontal assault from San Francisco-based technology company Uber, which will today launch its low-cost ride sharing service that promises to undercut taxi fares up to 30 per cent.

In a direct challenge to the Barnett Government's ability to regulate private passenger transport, the UberX service - which is marketed as "better, faster and cheaper than a taxi" - will become available to Perth customers on its smartphone app today.

Uber claims its service is safer and more affordable than taxis because of its combination of background checks on drivers and vehicle inspections, combined with the app that requires all drivers and passengers to identify themselves and rate each other at the end of every trip.

But Transport Minister Dean Nalder said last night UberX "is not a legal service".

UberX cars, which will be private four-door cars of any make built in 2005 or later, will not be fitted with security cameras or driver protection screens that are required to be fitted to taxis, which the industry will argue makes Uber less safe and puts the company and its drivers on an unlevel playing field.

Unlike taxis, whose owners have bought plates for hundreds of thousands of dollars or leased them for thousands of dollars a year, UberX drivers will not pay licence fees to the Government.

Uber, which operates in more than 200 cities, has become infamous around the world for operating within grey areas, or completely outside, local transport regulations. In Sydney, the NSW Department of Transport has used undercover officers to fine UberX drivers up to $2500, arguing they are breaking the law.

Uber Perth general manager Simon Rossi said yesterday it would require - at the Government's request - Perth UberX drivers to obtain an F (bus or small charter vehicle) or T (taxi) extension to their WA driver's licences in addition to the company's internal safety checks. Uber says riders and drivers are also covered for up to $US5 million by its insurance policy.

"What that means is every UberX driver has passed the required criminal background checks, driving history and medical checks before they hit the road," Mr Rossi said.

Uber regional general manager Mike Brown praised Mr Nalder and the Government for being "really progressive and forward-thinking . . . and embracing new innovation".

But Mr Nalder said any suggestion that the Government supported UberX was untrue.

He had approaches from Uber and let it provide details of its operations to the Government.

In turn, Uber was given advice that made clear the legal obligations of a business carrying passengers in WA.

As well as drivers having to be properly licensed for "passenger carrying services", each vehicle had to be licensed under the Transport Co-ordination Act 1966, which was not the case for Uber at present.

"Therefore, I cannot endorse the UberX service to be operated in WA in its current form because it is not a legal service," Mr Nader said.

Acting Police Commissioner Stephen Brown said police would closely watch the Uber service because it was unregulated.

“Everyone would be aware of the issues we have had around the regulated taxi industry - both for crimes that have been perpetrated against taxi drivers and on some occasions, crimes that have been perpetrated by taxi drivers on some of their passengers,” he said.

Mr Brown said police had worked closely with the taxi industry to help introduce reforms that ensured the network was strongly regulated and policed, mostly by the Department of Transport.

“One of the big benefits about the current regime was that there was a regulative body, there was regulation around what taxi drivers do, there was the camera system that provided great evidence for police around crimes that were committed in and around taxis,” Mr Brown said.

But he did not yet know enough about the Uber system to say if there would be safety issues.

“They are giving assurances about the regulation to a certain degree about the people who will be employed, the integrity checking… about the people who will be doing the driving,” he said.

Mr Rossi refused to reveal how many drivers it had signed up for today's launch but the company claimed it had thousands of West Australians on its waiting list to become drivers.