News, Insights and Stories from the Australian and New Zealand tech ecosystem.

Indian rideshare company prepares to launch in Australia as NSW Government implements levy on taxi and rideshare services

As the NSW Government gears up to implement a $1 levy per trip taken through taxi and rideshare services across much of the state from this Thursday, Indian rideshare company Ola has signalled it is getting ready to launch in Australia.

Placed on taxi service and booking service providers, the “temporary” levy of $1 per trip will be in place for up to five years to help the NSW Government fund its $250 million industry adjustment assistance package for the taxi industry, first announced when it legalised rideshare services in late 2015.

“This means there is a level playing field across industry when it comes to accounting for the levy in business planning,” the government stated on its website.

In an email to customers in NSW, Uber stated it will be passing the levy onto consumers; as such, GST will also be charged on the levy as it is part of a service.

An Uber spokesperson told the ABC, “We are puzzled as to why the NSW Government is still taxing the traveling public to give the taxi industry a bailout that the data shows they don’t need.”

“The NSW Government’s point to point transport reforms have given people more choice and expanded the reach of safe, reliable and affordable transport options across the state,” the spokesperson said.

“The reforms have grown the pie for the whole industry and demand for taxis has remained stable and license values have rebounded.”

Meanwhile, Ola announced this week that it is set to enter Australia, opening registrations from interested drivers in Sydney, Melbourne, and Perth.

Founded in 2011, Ola boasts a network of more than a million drivers across over 110 Indian cities, with 125 million users. The company raised US$1.1 billion in funding in October.

Bhavish Aggarwal, cofounder and CEO of Ola, said, “We are very excited about launching Ola in Australia and see immense potential for the ridesharing ecosystem which embraces new technology and innovation.

“With a strong focus on driver-partners and the community at large, we aim to create a high-quality and affordable travel experience for citizens and look forward to contributing to a healthy mobility ecosystem in Australia.”

The news comes just over a month since the launch of Estonian-founded Taxify down under.

Launched in Sydney in mid-December and more recently in Melbourne, the startup was founded by 19 year old Markus Villig in 2013.

Counting among its backers Chinese rideshare startup Didi Chuxing, it has since launched in 20 countries, including Austria, France, and Georgia, amassing four million customers.

Driver satisfaction is also top of mind for Taxify, with Australian country manager Samuel Raciti saying upon launch, “We truly believe that happier drivers provide better service to customers, therefore treating drivers better translates to happier customers. Driver delight has and will continue to be one of our core strategies. This strategy has been proven in many other markets that Taxify operates in.”

Image: Bhavish Aggarwal. Source: letsmarkup.

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