SA to allow UberX under $65m reforms

South Australia has opened the door to ride-sharing services such as UberX under broad reforms to the state’s taxi industry.

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The decision to allow new entrants to the market from July 1 will cost taxpayers about $65 million over four years when compensation for taxi drivers, the loss of revenue from plate sales and other measures are taken into account.

Plate owners will receive a one-off $30,000 payment, a more generous package than the $20,000 compensation offered to taxi drivers when UberX was legalised in NSW.

Taxi drivers who lease their licence in SA will receive $50 a week compensation for up to 11 months.

Ride-sharing drivers will be required to undergo police and working-with-children checks and their vehicles will be inspected for roadworthiness every six months.

UberX has welcomed the announcement but says it’s yet to decide whether to set up in SA.

“We hope the government will consider the removal of arbitrary red tape, including unnecessary costs or time delays, that would prevent South Australians from being able to access flexible work when they need it,” Uber spokesman Tom White said on Tuesday.

Premier Jay Weatherill said the changes delivered an equal playing field for taxi operators, chauffeur drivers and ride-sharing services.

“We want to make sure that all of the existing entrants in the industry have a fair and just transition to the new arrangements,” he told reporters.

Taxi Council SA president Jim Triantafyllou said the reforms would create a massive cost advantage for new entrants, who will pay less for compulsory third-party insurance.

“The contrasting costs on the taxi industry, based on the regulatory framework, are astronomically higher,” he said.”

The government will freeze the sale of new taxi plates for at least five years.

A $1 levy on all metropolitan trips across all platforms, including the new entrants, is expected to raise about $80 million over the next decade.

Taxi drivers will retain exclusive rights to rank and hail work, which Transport Minister Stephen Mullighan said represented about half of the fares on offer.

They will also continue to receive government-subsidised fares for passengers with disabilities.