Uber Foray into South Australia Hit by Cost Dispute


Ride sharing giant Uber has drawn the flak of South Australian Premier Jay Weatherill for its perceived “posturing” with regard to its entry into the local market. At the core of the dispute is “prohibitively high costs” mandated by the SA government.

Uber was slammed by Weatherill for double crossing the State Government by retracting from a commitment to enter the market with UberX ride-sharing service. What irked the Premier was a media article by Uber that said SA foray is “cumbersome.”

Describing the threat as “posturing” and “propaganda”, the Premier said ride-sharing would be available to South Australians from July, come what may, whether it is from Uber or its competitor.

The issue started with Uber representative attending a meeting convened by Transport Minister Stephen Mullighan, where, the government said, indications  were given out that UberX services would be starting in South Australia.

Weatherill said: “Obviously they’re trying to put a bit of pressure on us publicly by having a splash in the paper, but that won’t work.”

However, Uber’s director of public policy, Brad Kitschke, who attended the meeting, denied any commitment and said he only raised some issues that had been bothering it. They included the cost to drivers for starting in South Australia and the time factor in processing police checks, reports InDaily.

“We will not be launching (in South Australia) under the current regulations as they stand,” Kitschke confirmed.

The ride-sharing giant and the new ride start up GoCatch, founded by Ned Moorfield are unhappy at the “cost to drivers” rules in South Australia. Moorfield reiterated that the South Australian costs are prohibitive without ruling out the entry into the local market.

Meanwhile, even as Uber is expanding, the rivals are nipping at its heels in the strongest markets.  The new ride-sharing company, GoCatch, has cut the price of off-peak fares by 5 percent in Sydney.

Unlike Uber, which raises fares automatically when there is high demand the rivals are keeping prices down, reports The Sydney Morning Herald. 

They are exploiting the resentment of passengers with Uber on surge pricing as riders find bills running into hundreds of dollars at high demand occasions such as New Year’s Eve.

The new start up, GoCatch, has signed up more than 1000 drivers in Sydney since its launch in late February. GoCatch chief executive Ned Moorfield made clear that the company’s pricing will “always be cheaper than Uber.”

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