There’s no denying which way the wind is blowing when it comes to public support of ridesharing apps such as Uber in Australia. The use of these services offers a number of advantages that consumers here want. Cars through ridesharing apps are available in more locations, with shorter waiting times, and the technology lets riders track their drivers, leave feedback for others, and make safe payments. It’s a constantly shifting landscape right now, though. New services are entering the market, and local governments continue to debate what, if any, regulations are appropriate. With all the talk going on it’s worth taking a moment to look at the ridesharing picture in Australia.
Uber, of course, is the big player in the ridesharing market, and their growth has been impressive. Over one million rides were booked through their uberX service in the first year it was launched, and now they facilitate over 14 million rides a year in Australia’s four largest cities. The overall market, however, is still dominated by the taxi industry. Uber only represents 6% of the national point-to-point transport market, but if other countries are anything to go by a market share for Uber as high as 30% is not unrealistic.
Given what we’ve seen elsewhere, it’s not surprising that the taxi industry is pushing back. In calling for protection against these new services the taxi industry stresses that the regulations they are subject to ensure consumers and workers are kept safe from harm. Their claim is they want a level playing field where all transport vehicles and drivers have to follow the same rules. Advocates for ridesharing services call their actions anti-competitive and say that consumers only benefit from having more options.
All of this has resulted in a patchwork of regulations across Australia’s different states and territories. In a sign of the times, though, South Australia is debating fully legalizing Uber services. Currently, only the premium Uber Black service is legal there, and drivers offering uberX carpooling and ride-sharing risk fines when they pick up customers.
Ready to add to the momentum of growth in ridesharing, the Australian based Splend is aiming to further enable the shared economy. They describe themselves as a ‘vehicle subscription service”, and provide potential drivers with new and insured vehicles for a weekly fee of $275.
They are looking to capitalize on the number of people who would become uberX drivers but lack a vehicle to do so. Owning a car, and a car less than 9 years old, is the main entry barrier for anyone wanting to drive for Uber, and Splend wants to provide drivers with the means to take advantage of this self-employment opportunity.
With all the positive news and consumer interest in ridesharing, new players are entering the market all the time. Rumors continue to circulate about a potential launch of Lyft in this country, but in the meantime local, and localized competitors are starting up.
There’s Not Just Uber Out There For Ride-Sharing Apps.
GoCar is a locally funded extension to the GoCatch app that will allow users to switch between booking a taxi and using ridesharing. Its initial launch was in the Sydey area and has even received the support of Prime Minister Malcolm Turnbull’s son Alex. Fares through GoCar will be 10-30% cheaper than taxi fares depending on when the car is booked, and drivers are charged 5% less in commission than from Uber.
Hitch-A-Ride is another Australian company that is taking a slightly different approach. They bill themselves as a “social rideshare market”. Users of this app connect mainly with their own group of contacts in order to avoid taking rides from strangers. Carpooling and sharing transit expenses with friends is not illegal anywhere in Australia, so they claim to fall outside the gray area that other services are forced to operate in.
The taxi companies are also being forced to react and have banded together to launch their own service under the name of iHail. A big barrier in the past has been that while taxi companies often had their own apps, a user had to use a different app for each transportation network. By working together, customers can now use one app to find all the available taxi from different companies. In theory, this should cut down on the wait times people experience when trying to book a ride.
All of this is good news for consumers. While it’s important to be concerned with public safety, the fact that we haven’t heard 1000’s of stories of bad consumer experiences with ridesharing in other countries, should encourage not to be overcautious. Now with local governments reconsidering their approach to regulations, and the major taxi companies taking steps to give people what they want, the average Australian is finally being listened to. The future of ridesharing apps in Australia should make getting from point A to point B as easy as it should have always been.
The taxis have it tough now with competition from ride-sharing apps and things will only get worse for Taxi companies and better for consumers. Licence costs and values have dropped. It was reported in the Shydney Morning Herald last December that plate prices had fallen one-quarter in value in a month and further off a previous peak value. The Age also recently reported drops in taxi licence plate values for Melbourne Taxi Plates. It doesn’t spell good news for the Australian Taxi industry as a whole in what was once considered a “good” investment by some to buy cab licences given the strict controls and also the supply of plates on the market. Uber in Melbourne today announced further cuts of 15% in its rates in an article by Business Insider.