10 Feb 2016

Uber slams government industry review

1:25 pm on 10 February 2016

Ridesharing service company Uber says a government review of the industry has taken too long and could lead to a "worsening of the status quo".

Uber app

Uber app Photo: RNZ / Diego Opatowski

The smartphone-based driver service has given its submission on the Ministry of Transport's consultation paper.

The paper, released late last year, looked at new rules for passenger services such as taxis, shuttles, dial-a-driver and ridesharing apps. It followed the Government's announcement of a review in January 2014.

When the consultation paper was released in December, Associate Transport Minister Craig Foss said the review found regulations from the 1980s needed an update.

"Technology, such as smart phones and apps, are really changing the range of services on offer and the way they operate.

"The proposed options set out how to simplify the regulations and ensure they are fit for purpose, accommodate new technologies and maintain the safety of passengers and drivers," he said.

But Uber has blasted the length of time it's taken to get things underway, saying the review process has taken too long. It said three Australian jurisdictions, Mexico, the Philippines and Jakarta in Indonesia have all regulated ridesharing and reformed the transport sector over the same period.

In its submission, the company called the review repetitive and speculative, and said it would miss the mark for a well-regulated ridesharing industry.

"In crucial respects, it proposes little more than a worsening of the status quo. The review does not acknowledge that ridesharing technology can solve many of the issues that plague the incumbent industry, nor does it acknowledge that different models should be treated differently.

"Instead, it treats all models as variations of a taxi. The proposed regulations will erode the economic value of efficient models such as ridesharing that are built on personal, underutilised vehicles, flexible work, and smarter solutions to safety."

One of the company's major concerns was around the cost and time associated with becoming a ridesharing driver.

"In our experience, the median processing time for P-endorsement applications with the New Zealand Transport Agency is 12 weeks. Fifty-eight per cent of completed P-endorsement applications from Uber partner-drivers are outstanding after more than 3 months."

It said the P-endorsement would cost around $800 and take 12 weeks, when an adult passport could be received in as little as three days at less than half the price.

It said more than 86 percent of its driver applicants referred to the endorsement by Uber declined to complete it, because it took too long or was too expensive.

Under the proposed changes, a P-endorsment is projected to take around 20 days.

"The review must look outside of the scope of the incumbent market and look to create rules and an administrative framework that will accommodate a new market. Thus far the review has failed to do this."

As well as easing administration regulations Uber argued against the need for drivers to manually complete log books.

"As a matter of business policy, ridesharing platforms such as Uber already monitor partner work hours and advise partners of their responsibilities."

It also said there was no need for rideshare drivers to have medical checks and vehicle certificates of fitness calling them "costly and unnecessary regulatory imposts".

Proposal for Christchurch trial

Alongside its submission Uber has put forward a proposal to trial the service in Christchurch where it said it already had 6000 people showing interest.

The proposal is for a three month trial and would offer the same service already operating in Auckland and Wellington, but would make it easier for people to become Uber drivers.

The service has asked the government for a series of exemptions and delegated rules, including bypassing service licenses and the P-endorsement and getting rid of logbook requirements for their drivers.

"Uber would provide the Agency with all the partner information necessary to perform an appropriate fit and proper person test, including a criminal background check and proof of identity."

It said it would not be circumnavigating safety but setting up agreements with government departments to complete driver checks and a police background check.

It said this would reduce the time it took to get the clearance to take passengers to six days, while the cost would fall to $20.