NSW taxi reforms a big win for disruptive booking apps

The New South Wales government has announced new legislation regulating the use of taxi booking apps, as consumers increasingly choose to use smartphone booking apps over traditional taxi services.

In recent years a new generation of taxi booking apps, including goCatch, Uber and ingogo, allow users to book taxis directly with drivers, bypassing traditional taxi services such as Cabcharge.

In response to the growing popularity of these services, the NSW government has followed in the footsteps of Victoria by introduced legislation to regulate the industry, in a move seen as granting official legitimacy to the apps.

The move comes after significant backlash against the disruptive startups by incumbent taxi providers, which included intense lobbying and a sponsorship of Crime Stoppers, which attempted to brand the new services as being “illegal apps”.

The new legislation also places a 5% cap on the fees card payment providers can ask for, while also increasing the enforcement of vehicle safety and maintenance standards.

New South Wales Transport Minister Gladys Berejiklian announced the changes in a statement, describing the new laws as a win for consumers.

“Taxi apps are a convenient way for customers to connect directly with a driver and are currently not addressed by outdated transport laws,” Berejiklian says.

“This is a small change that can make a big difference, opening up competition and giving customers the information they need when they book a taxi and providing more confidence when a taxi will arrive.

“The reforms will safeguard customers by ensuring the apps meet the full range of customer service, privacy and safety standards that apply to existing booking services provided by taxi networks.”

As Transport for NSW spokesperson explained to StartupSmart the new changes bring the mobile apps in line with the requirements for other taxi services.

“All taxis offering services to customers – whether via apps and other booking services, at ranks or by street hails – must be licensed taxis with authorised drivers and using the taxi meter. None of these requirements will change,” the spokesperson said.

“Any taxi booking service, including apps, must make sure that these requirements are always met, or risk losing their authorisation to operate as a booking service.”

The cofounder of goCatch, Andrew Campbell, told StartupSmart it has taken some time for legislation to catch up with the disruptive new industry players.

“We had a situation where legislation didn’t keep pace with technology. goCatch changed how taxis and passengers connect right across Australia,” says Campbell.

“Regulators did the right thing. They observed the changes and they introduced legislation to deal with the change.

“[That] the NSW government will be regulating taxi booking apps goes to show it’s possible to crack open a large monopoly with disruptive technology.”

Meanwhile in a statement, ingogo founder and managing director Hamish Petrie also welcomed the changes.

“We’ve been lobbying industry and working with Transport NSW for two years around creating a specific ‘App platform licence’, so we’re glad to see that our initial recommendations have been accepted,” Petrie says.

“The announcement today is the best news for the taxi industry in a long time. Lower surcharges are great for passengers but there is also a strong need for better safety elements.

“These long overdue changes are also a win for drivers as it means they can now accept ingogo devices and passengers without worrying about Cabcharge or network retribution.”

He says people can now sign up to taxi booking apps knowing the government fully supports what they’re doing and can ignore the incumbents’ fear mongering tactics.