Since its launch in Australia in April 2014, Uber has had its share of backlash, especially from the taxi industry.
The NSW Taxi Council recently launched a controversial ad campaign with the message “Ridesharing. It’s no safer than hitch-hiking.” Roy Wakelin-King, the CEO of the NSW Taxi Council told Pedestrian their advertisements are not targeted directly to Uber and added that the main issue is that illegal ridesharing is “no different to getting into a car with a complete stranger.” Consumer advocacy group Choice’s Tom Godfrey told the publication that “the taxi industry is running an almighty scare campaign.”
Choice set out to test UberX and taxi services and find out which was the most reliable and cheapest. The team conducted 56 trips across Sydney [28 taxi rides and 28 UberX rides] and published the results in late September. According to the consumer advocacy group, UberX was cheaper than a taxi about nine times out of ten and taxis were 40 per cent more expensive than UberX on average. Although there were three times when UberX was more expensive, “it wasn’t by much –and it was only when surge pricing was in place.”
Of the total of 28 UberX rides, the Choice team encountered surge pricing four times. Even though taxis showed up faster on average, it was mainly due to the convenience of hailing one off the street. When they were booked they tended to take longer to show up than UberX and there were even two times taxis did not show up at all. Uber scored an average of 8.3 for the overall experience while taxis scored an average of 6.7.
Choice emphasized that at face value, Uber’s pricing is cheaper than taxis, so the team was not surprised that taxis were more expensive than UberX 89 per cent of the time. In Sydney, UberX costs $0.40 AUD per minute and $1.45 AUD per kilometre while the maximum taxi rate is $0.94 AUD per minute and $2.19 AUD per kilometre. While taxi prices have set maximum prices in every state, generally with day rate, night rate and peak rates, Uber’s pricing fluctuates with supply and demand through the so-called ‘surge pricing’ –which occurs when demand is high and/or when there are only a few drivers on the road.
The Choice team encountered surge pricing only four times out of 28 times, and only to a maximum of 1.5 times the base rate: two times after midnight on the weekend, one time after 10 p.m. midweek and another time mid-morning on the weekend. Although clients are warned of surge pricing before they accept a trip, the feature makes pricing unpredictable for users.
Choice cited Blair Davies, chief executive of the Australian Taxi Industry Association, as saying that taxis are more expensive than UberX because there are a range of costs associated with running a taxi, including the commercially priced obligatory third party insurance which is about $9,500 AUD in the ACT. However, these figures fail to add up to account for the average 40 per cent price discrepancy Choice found between UberX and taxis. The consumer advocacy group’s position is that “regulations should apply equally to taxi services and to Uber.”
Regarding the safety of choosing UberX over a taxi, police have not yet started reporting any statistics on assaults in Uber cars, the NSW Bureau of Crime Statistics and Research told Choice. Because both UberX and taxis have a range of different mechanisms in place to make sure passengers are safe, it all goes down to whether or not clients are satisfied with them, the consumer advocacy group concluded.