Consumer group takes 28 trips each with taxis and UberX to test safety, reliability and value, reporting taxis were more expensive nine times out of 10

This article is more than 5 years old

This article is more than 5 years old

Uber’s controversial ride-sharing service is 40% cheaper than taxis in Sydney – and more reliable, too, according to an investigation by consumer advocates.

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Choice found little evidence to support the claim by the New South Wales Taxi Council – printed on billboards around Sydney – that ride-sharing services such as UberX were “no safer than hitchhiking”.

The UberX feature, which connects passengers with registered private vehicles, has triggered protests around the world by the taxi industry, including earlier this month in Melbourne, Sydney and Canberra.

But ride-sharing has taken off in Australia, and was used more than 1m times in the year to May, Uber says.

Investigators from Choice compared 28 taxi rides to the same number of trips using UberX. They found that taxis were more expensive nine times out of 10, and by an average of 40%.



Only with surge pricing – which boosts the cost of a UberX trip when demand is high – did taxis become cheaper, by about 6% in most instances.

Twice, the booked taxis failed to show up, which Choice’s spokesman, Tom Godfrey, put down to drivers finding longer, more expensive fares.

“Part of the problem may be that taxi drivers are told the passenger’s destination, which may make short trips less attractive. Uber drivers, on the other hand, aren’t given your destination until they turn up,” Godfrey said.

In about 62% of cases, a car booked through UberX arrived more quickly than a taxi. But Choice found that for those on busy enough streets, the fastest way to get moving was still to hail a cab.

State governments are grappling with how to regulate the ride-sharing service since it launched in Australia in May 2014.

Transporting passengers without a licence is illegal, and UberX drivers around the country have faced fines.

A taskforce commissioned by the Baird government said in a discussion paper in August that UberX “appear[s] to meet the criteria of a public passenger service” and should be subject to existing taxi regulations. Its final report is due in October.



Luke Foley, the NSW Labor leader, has called for the service to be legalised and regulated. “The NSW government is perfectly capable of providing these rapidly developing industries with certainty if it has the will and the vision,” Foley has said.

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The Victorian government held a ministerial forum on the issue in April but has yet to announce any regulatory changes.

Western Australia released a green paper looking at possible reforms in July, and is considering the idea that Uber could pay a flat licence fee on behalf of drivers.

Godfrey said any regulations should apply to both taxis and UberX, “but the point of regulating should be to protect consumers and encourage competition in the market, not to protect one particular business from its competitors”.

“The current restrictions on taxi licences benefit the taxi industry and raise costs for consumers. We believe easing the restrictions would promote competition and ultimately be good for consumers,” he said.

A spokesman for the Combined Communications Network, the country’s largest taxi booking service, said Choice’s results were “a simple analysis of a more complex issue”.

“I am concerned [the report] was completed and released without adequate taxi industry consultation and appears to be price and service led, without an in-depth consideration of safety features, GPS tracking, or taxi driver training,” Stuart Overell said.

“Many of the extensive safety features of a taxi are not obvious to a passenger. This includes tamper-proof, always-on GPS to constantly track the whereabouts of taxis, as well as permanently powered, fire resistant security cameras to capture activity inside and outside a taxi.

“On the other hand, ride-sharing services use the GPS tracking from phones, which is a vulnerable technology given a phone can be discarded or simply switched off – drivers, and their passengers, can simply fall off the radar at a touch of a button. Safety features are there for the protection of customers and drivers. They are mandatory for a reason,” he said.

Overell welcomed Choice’s recommendation that taxis and ride-sharing services should be subject to the same regulations. “Taxis are complying with excessive regulation, while ride-sharing networks are not. Ride-sharing has proven that it is currently more cost effective to operate illegally than to comply with state regulation,” he said.

“Additionally, we are not surprised to see ride-sharing alternatives revealed as the cheaper option. Taxi fares are regulated by the government and regulation impacts [on] price; whether that’s the cost for taxi owners to get cars legally on the road; the cost of government mandated training for drivers to become qualified; or the cost of maintaining taxis and their safety features; the end result is a slightly higher fare for passengers.

“That’s why, as the largest taxi network in Australia, we are talking with state government to address why drivers have to comply excessive regulation, while the competition does not,” he said.