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Uber to be legalised in NSW | report

Legislation will be introduced into NSW parliament soon to legalise Uber's ride-sharing service.

Controversial cab service Uber will be legalised in NSW by the Baird government next month under sweeping reforms to the state's taxi industry.

News Corp Australia can reveal that under the reforms, to be announced by Transport Minister Andrew Constance, Uber drivers will be required to pay a licence fee for the first time, while existing taxi owners will be offered compensation for losing exclusive control of the market.

Taxis will retain the sole right to "rank and hail" services under the new rules, while there will also be a crackdown on who is allowed to get behind the wheel of UberX vehicles and drivers with a criminal record will not be issued a licence.

Government sources described state regulation of Uber as "inevitable", saying the service would have continued to operate under the radar had it not been legalised.

Under the move, costs will increase slightly for Uber drivers, with their cars required to undergo safety checks more frequently than regular vehicles, as well as the licence fees.

Meanwhile, the cost of getting into the taxi industry will be substantially reduced. At present, taxi plates can cost as much as $320,000 but the legalisation of Uber will see the value of the plates drop dramatically.

It is understood an independent review of the industry commissioned by the government found that taxi owners should not be left "stranded" and needed to be compensated for the drop in plate values.

The report, by former Cabinet Office director-general Gary Sturgess and former Sydney Water chair Tom Parry, did not nominate a specific amount of compensation or how it should be funded. Instead, that decision is expected to be made by Cabinet before the reforms are officially unveiled early next month.

It's not as simple as legalising Uber and everything else will be OK

"All the discussion is around the compensation and how to fund it," one government source said.

Another added: "In some jurisdictions like Ireland there was no compensation at all; they set up a hardship fund." The ACT became the first jurisdiction in Australia to legalise Uber in October.

Taxi Council chief executive Roy Wakelin-King said he wanted the government to ensure there was a "level playing field" in the industry.

"It's not as simple as legalising Uber and everything else will be OK," Mr Wakelin-King said.

The reform, and local government amalgamations, are the two big items left for the government to finish off the year, together with an announcement on Western Sydney light rail.

A spokesman for Mr Constance said the government had received the report from the Point to Point Taskforce and was considering its recommendations.

- Regulated industry
- Drivers must have a full licence, undergo ongoing criminal history checks
- Drivers complete a training course and taxis are fitted with security cameras
- Prices are fixed
- Can wait in ranks, be called or hailed

- Largely unregulated industry
- Drivers must have full licence and undergo a driver history check
- Drivers rated by passengers and can be tracked via smart phone
- Surge fees apply in busy periods
- Drivers booked via smart phone app