Could there be trouble ahead for Uber’s “Black” service under NSW transport laws?

The world of Apps is changing so many industry’s – the transport industry is one that is undergoing a period of complete change.  On this week’s episode of “Your Tech Life” Trevor Long talks to NSW Transport Minister Gladys Berejiklian about the new Opal electronic ticketing system and the future of Taxi booking and payments.

Introducing an electronic ticketing system in 2014 puts NSW right at the back-end of innovation in this space, but as NSW Transport Minister Gladys Berejiklian told me

“We’ve been able to learn and observe just what other cities went through”

and that’s a grass is greener way to look at the long-delayed electronic ticketing system for NSW.

Opal as it’s known is a simple concept allowing you to register for a card which is loaded with cash by you on application, as well as either automatically at a low balance or at news agents where you may have previously purchased bus passes or similar.

For train trips the concept is simple – tap your card at the ticket gates when you get to a train station, and tap it again when you arrive at your destination – just at the same place and time you would have thrown the ticket in the gate.

You’re charged per trip, and there’s even incentives to travel more with free trips after 8 trips within a week.

Rolling out onto buses later this year the technology gets really interesting here.  Because you will tap “on” and “off” on the same bus, the Opal system relies on GPS technology to determine where you are when you tap and thus how much to charge.

You can listen to my full interview with the minister below.

Earlier this week the NSW Government announced they would introduce changes to the Passenger Transport laws into parliament later this year – that announcement and those changes seem to have been greeted with delight by many, including those newcomers to the Taxi market – “the Apps”.

Apps like GoCatch and Uber allow you to find and book a cab from your smartphone, in some cases they also take care of the payment too.

The Minister told me that the first and most critical change was to follow the lead of Victoria and reduce the maximum allowable credit card payment surcharge by half – from 10% down to 5%.

While that sounds great, it’s still well above the 1-2% retailers charge for their transaction – when I put that to the Minister her response was

“the short answer is – it’s a good start, this is what we’ve started with – there might be opportunities for us to look at it in the future”

When it comes to actually booking a taxi, it seems the NSW government is open to the idea of competition in this space.

“We do have transport laws that are a bit outdated, I’m relaxing those laws and we’ve got proposals to put to Parliament which allow people to use apps freely and have apps developed” Ms Berejiklian said.

“The Taxi industry is nervous about it”, however she went on to say “two things motivate me, firstly is customer choice – that customers choose how they want to get a cab”, “and secondly is competition which I think is a great thing”.

For Uber though, the problem might be deeper.  The “Black” and “Lux” concepts around Uber are to use the Hire Car system to find drivers who can be booked and charge on the basis of the distance travelled.

A quick look at the existing “Passenger Transport Regulation” dated 2007 shows a pretty black and white problem for Uber and the Hire Car businesses earning extra cash through this new app.

Regulation 188 states:

188 Meters not to be installed in private hire vehicles

1. (1) The operator of a private hire vehicle must ensure that there is not installed in the private hire vehicle any taxi-meter or similar device designed or intended or used to compute any of the following in relation to a journey:
   1. (a) the distance travelled,
   2. (b) the time taken,
   3. (c) the fare payable.
2. (2) Subclause (1) does not apply to a clock, an odometer or a Global Positioning System device.

Now I’m no lawyer, but the Uber app sits in the hire car and reads distance and time and calculates a fare.

If you ask the Minister about Hire Cars:

“we’re hot-to-trot on hire cars not doing the right thing”

Ms Berejiklian went on to say

“obviously the difference between a hire and a taxi is with a hire car you require a certain amount of pre booking”

There’s clearly some checking going on with Hire Cars but I’d suggest that’s more about them picking up curbside without a booking – if you drill into it, you might argue that the “meter” is a problem, and reading between the lines it could be the case that the NSW Government looks to introduce a “time” on the “pre-booking” that is required.

You see I can “book” and Uber Hire Car right now, as long as there is one near me – the car will come to me in the time it takes to travel from where it is to where I am.  However the Government may require a time window for that booking, perhaps a 30 minute pre-booking.

Any change would be a problem for Uber – while the Uber Taxi concept looks set to boom, the future for the Uber Black and Uber Lux might not be so clear.