LEIGH SALES, PRESENTER: Have you heard people recently talking about Uber and wondered: what is it?

It's a sort of car service like a taxi, but it's a lot less regulated and because of that it can be a cheap and efficient option for people needing a ride.

Uber's only been around for a bit over five years, but it's already operating in dozens of countries and it's worth about $49 billion.

As you might imagine, standard cab operators aren't happy with the unregulated competition and the industry's taking legal action against Uber, as Greg Hoy reports.

GREG HOY, REPORTER: With 200 million taxi trips taken in Australia every year and $5 billion in fares up for grabs, a big predator has emerged in the cutthroat cab competition. It's called Uber X. It's totally unlicensed and is brazenly breaking the law.

GRAEME SAMUEL, CHAIRMAN, VICTORIAN TAXI COMMISSION: Certainly in their operations over the past 12 months, they've not been gaming the regulators, they've just actually been thumbing their nose at them and saying, "We're going to operate anyway."

GREG HOY: Uber X is the discount arm of the giant US hire company Uber. The latter is regulated; Uber X is not, but, it's growing fast.

DAVID ROHRSHEIM, UBER AUSTRALIA GENERAL MANAGER: I can't be too precise, but I am proud to say Australians have been rapid adopters of ride sharing. There has been millions of rides here in Australia since we've launched, which is a clear sign that people are looking for another alternative.

GREG HOY: In Australia, Uber boasts it has signed up thousands of unaccredited taxi drivers like John Smith and Eric Weitzman.

ERIC WEITZMAN, UBER X DRIVER: It's only been going roughly six months, I think, in Melbourne now. More and more people are using it It's very - it's got a social impact to it. People are using it more and more often. They're recommending it.

GREG HOY: Uber X drivers use their own private vehicles as unlicensed taxis to collect passengers who have hailed a cab using Uber's smartphone app.

So do you worry that you could be fined or prosecuted?

JOHN SMITH, UBER X DRIVER: I have spoken with Uber about it. I believe there is talks between Uber and the Taxi Directorate.

GREG HOY: So would you pay the fine or would Uber pay the fine?

JOHN SMITH: I believe Uber would.

GREG HOY: Traditional taxi operators like Harry Katsiabanis of Taxi Link in Melbourne, who have to pay around $300,000 for a taxi plate, want Uber stopped.

HARRY KATSIABANIS, TAXI LINK: If I was the regulator, if i caught you driving an Uber X car, I would crush the car.

GREG HOY: Crush the car?

HARRY KATSIABANIS: Absolutely. Take the car, impound it and crush it.

GRAEME SAMUEL: Taxi operators would love to see us do all sorts of things, probably even have tow trucks to take these cars off the road, but I think they need to understand that we have to operate within the normal process of the law.

GREG HOY: In Victoria, Taxi Services Commissioner Graeme Samuel has ordered a crackdown.

GRAEME SAMUEL: It's an undercover operation, yes. I mean, that's the simple way of putting it. We fined a whole lot of drivers for not having been accredited.

GREG HOY: 80 infringement notices have now been issued to Uber X drivers in Victoria and $130,000 in fines. Uber, it seems, has simply paid the lot.

DAVID ROHRSHEIM: We don't think anybody should be fined for providing safe transport. We provide any support they need if they have trouble using our technology.

GREG HOY: This defiance has only fuelled the rising road rage amongst veteran cab drivers like Stephen Duncan.

STEPHEN DUNCAN, TAXI DRIVER: Well I think that's an absolute disgrace. And if that is the case, the fine should be increased to $10,000 a time And that would soon start to sort out Uber, I think, to make sure that they run a proper, legal and efficient service.

GREG HOY: But Uber has deep pockets. In just five years, it has emerged in 50 countries and 250 cities with big backers like Google. The more cities it conquers globally, the more its estimated value skyrockets. Uber's latest valuation: $49 billion.

GRAEME SAMUEL: In some places, the governments have turned around and said, "Look, this is good for consumers. In other jurisdictions, governments have taken a view that the taxi industry ought to be protected from further competition and so they've taken a view that they'll ban the Uber X service. I'm not sure the banning has actually been working 'cause Uber X just simply says, "We're going to do it."

GREG HOY: After its undercover investigation, today the Victorian Taxi Commission launched court action against 12 Uber drivers in an attempt to inflict harsher penalties. Uber's lawyers claim the investigation was unlawful. Other states are watching and waiting to see who wins.

This battle has only just begun. Uber is fiercely determined to up-end the Australian taxi industry, regardless of what regulators and rivals may think.

HARRY KATSIABANIS: We say to anyone that wants to come into our industry, "If you're good enough and you beat us and you provide a better service, so be it. But compete on the same level playing field. Don't compete on the sides by illegal tactics that don't allow us to compete in the same way."

LEIGH SALES: Greg Hoy reporting.