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Uber increasingly popular in Sydney as taxi use stands firm

Ride-sharing companies have expanded into the Sydney market, while taxi use has remained stable, according to the latest IPART survey.About one-third of Sydney residents are now using the ride-sharing service Uber, but there has been no drop in business for the city’s taxis, a survey shows.
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Instead, Uber appears to be capitalising on increasing amount of trips taken in Sydney using so-called point-to-point transport.

In a survey of more than 2000 Sydneysiders in November 2016, 33 per cent said they had used a ride-sharing service such as Uber, GoCar or GoBuggy in the previous six months, according to a new report for the Independent Pricing and Regulatory Tribunal.

The result was up from 19 per cent in 2015 and 11 per cent in 2014.

The popularity of these services also increased in regional centres, such as Newcastle, Wollongong and Gosford, where use rose to 18 per cent, doubling  2015 levels, and up from 4 per cent in 2014.

Chief executive of the NSW Taxi Council, Roy Wakelin-King, was quick to point out there was significant overlap between users of various modes of transport, with 92 per cent of ride-sharers using taxis.

“When you look at the results, no one is exclusively using ride sharing. There is a balanced approach to how people access point to point transport services.”

​The IPART survey results follow a swathe of legislative reforms to the NSW point-to-point industry in June 2016, which removed 50 pieces of red tape to provide for fairer playing field across the industry.

After announcing a $107 million half-year loss last week, Cabcharge chief executive Andrew Skelton said the Sydney taxi market had stabilised.

“Regulatory settings that have inhibited growth are changing in NSW and Victoria, our biggest markets, setting the scene for growth to resume,” he said.

Among the measures was a new $1 levy on all trips to fund a $250 million assistance package designed to compensate owners of taxi plates, which requires further regulation before it is implemented.

But Mr Wakelin-King said the sector still had a long way to go before a level playing field was achieved.

Difference in insurance costs remains a particularly sore point for the taxi industry. While taxi drivers are required to fork out around $9000 for commercially priced compulsory third party insurance, Uber drivers pay the private passenger vehicle rate of around $600-$900.

“We are artificially held to a higher level at the moment, due to those [insurance] regulations and so therefore it is very difficult for us to compete in that space,” Mr Wakelin-King said.

“Because taxi and ride-sharing are doing the same thing, the risk is comparable, therefore the insurance cost should be comparable.”

In some comfort to the taxi industry, the advent of new players has not encroached on its existing market share, with the 2016 survey finding there had been no overall reduction in the use of taxis.

According to the survey, the perception of value for money was a key point of difference between ride-sharers and taxi users.

Only 28 per cent ot taxi users thought they were getting good value, compared with 75 per cent of ride-sharing customers. However, this figure plunged to 24 per cent when surge pricing kicked in for ride-sharing.

At $34, the median ride share fare for Sydney was higher than for taxis ($28), but taxi fares tended to be higher once trip length was factored in, the survey showed.

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