Illegal ride-sharing service UberX outsmarts transport inspectors, disrupting undercover stings

Updated

Emails obtained by the 7.30 program reveal illegal ride-sharing application UberX is undermining transport inspectors by blocking their mobile phones from accessing the service.

UberX drivers use private vehicles as unlicensed taxis to collect passengers who have requested a car using Uber's smart phone application.

It is effectively banned in Queensland, New South Wales, Victoria, and Western Australia, and drivers caught accepting passengers risk fines of up to $1,700.

The fines are usually issued on the spot during undercover investigations in which transport inspectors download the Uber app using government-issued mobile phones, and book a ride.

However, emails obtained under Queensland's Right To Information laws show Uber is tracking those mobile phones and suspending all corresponding Uber accounts.

"Due to blocking by Uber, only two covert rides were undertaken [today]," said Nick Marsden from the Department of Transport and Main Roads in an email to colleagues last August.

"Time was spent purchasing new credit cards, activating gmail accounts, and setting up two more phones.

"These phones are the last ones, [we] will be ordering additional units."

When a transport inspector contacted Uber to ask why their account had been suspended, a customer service representative cited suspicious activity.

"I can see that our system has picked up unusual activity linked to this account," the representative said.

"It's currently under investigation and will remain banned until we get to the bottom of it."

State governments losing battle against Uber's deep pockets

The Queensland Government says it has issued more than $260,000 worth of fines to 95 UberX drivers since the business began operating in Brisbane early last year.

The fines, however, appear to be having little impact on Uber, as the company has deep pockets and is paying the penalties on behalf of its drivers.

Gold Coast driver Debra Walsh said she had been instructed to ignore the ban.

"They've told us to keep operating and if we do get fined, they are covering the fines at the moment," she told 7.30.

Uber is backed by Google and investment banking giant Goldman Sachs, and was recently valued at well over $40 billion.

The emails obtained by 7.30 reveal tension among staff at Queensland's Department of Transport and Main Roads who do not believe the undercover investigations are working.

"Do we get a sense from the 'word on the street' that the action we are currently undertaking is having an effect?," asks Graham Faine in an email to colleagues.

"No," replies Nick Marsden, "It appears the Uber business is still expanding."

"How long is [Department of Transport and Main Roads] prepared to continue to throw resources at this activity?," asks Lance Maxwell.

The crackdown on UberX has also exposed the limitations of the Transport Operations (Passenger Transport) Act, which governs the regulation of the taxi industry.

Many UberX drivers have been fined multiple times but continue to attract the same penalty.

They can also plead guilty in writing rather than having to appear in court.

Advice was sought on whether the legislation could allow for more punitive action.

"There is nothing in the legislation that sets limits on the number of [penalty infringement notices] that can be issued," Mr Marsden said.

"We have been discussing what option we should take in regard to repeat offenders but haven't really landed on a position."

Speaking at a press conference this morning, Queensland's Transport Minister Scott Emerson indicated the Government would not be changing its approach.

"I'm determined to ensure that we enforce the regulations we have in place. Those regulations are there to protect the safety of passengers," he said.

Transport inspectors 'not delivering' on promise to stop Uber

The Taxi Council of Queensland (TCQ) has been supplying the Department with intelligence on UberX drivers in the hope of speeding up prosecutions.

7.30 has seen a list of registration numbers, and photographs of corresponding vehicles, emailed to departmental staff.

"They are not doing anything with the lists of suspected vehicles," wrote Translink's Gerida Schull.

"I'd thought these drivers were at least getting warning letters."

Black and White Cabs general manager John Tighe is angry the Government has failed to act on this information.

"We've provided that information with the very best of intent. It's disappointing when you see not much happening. It's frustrating," he said.

Uber calls for legislation allowing UberX to operate legally

While Uber can certainly afford to continue brazenly breaking the law, spokesman Mike Abbott says the company now wants to be regulated.

"We are calling for [state governments] to remove the ambiguity and to put in place sensible safety-based legislation for ride-sharing, which is pro-consumer, and is not about protecting incumbents from competition," he told 7.30.

"Some of our driver partners have received needless fines but I think a bigger question is why are they receiving fines for providing safe, reliable transportation?

"Is this an efficient use of taxpayers' money and department resources?"

Former head of the Australian Competition and Consumer Commission turned Victorian Taxi Commissioner, Graeme Samuel, said banning UberX simply would not work.

"The approach being taken by some governments to penalise Uber drivers and penalise Uber itself, I have to say, is doomed to fail," Mr Samuel said.

"The reason it is doomed to fail is not because of the might and substance of Uber and those backing Uber, it's rather the might and substance of the public.

"The other approach is to say we can legalise the Uber service in a way that is appropriate for government requirement that the service be provided as a safe service for the public, and, at the same time, to treat those in the taxi industry and the hire car industry on a fair basis."

Topics: consumer-protection, internet-culture, qld, australia

First posted