As if the embattled taxi industry didn't have it tough enough with Uber. A new hire car company is looking to take another slice out of the market for city road passengers by rolling out 200 London cabs on Sydney roads.
London Rides has partnered with local taxi and ridesharing app GoCatch to provide hire cars in the shape of spacious London cabs at the same price as regular taxis.
London Rides co-owner Ross Pendergast said the London cabs will appeal to customers who want a more consistent and luxurious experience than Uber but are not happy with traditional taxi providers.
"To me it's like being in a business class," Mr Pendergast said.
"With Uber you don't know what you're going to get. With us will get uniform service, secured vehicles and professional drivers."
The London cab is more spacious than a traditional cab, the vehicles are fitted with security cameras and a panic button for drivers, and drivers and passengers are divided by a glass. There is no surge pricing and passengers have the option to press the "mute" button to block out the conversation with the driver.
Mr Pendergast said although the vehicles cost more – $80,000 for a London cab instead of $25,000 for a standard taxi – passengers will pay the same price as taxis.
He said he was able to keep the price low because the company partners with principal drivers who simply pay a car rental fee of $150 a day and who have the option to hire additional drivers. There are no other stakeholders involved such as taxi operators or taxi plate owners.
The taxi industry has been under pressure since Uber officially launched in Sydney in November 2012. The price of a taxi licence plate in Sydney is $227,000, down from $400,000 in November 2012.
Mr Pendergast, who also runs luxury car dealership Road and Track and has been campaigning for freeing up second-hand car imports, likened driving for Uber to borrowing money from "payday lenders" because there was no initial cost involved in becoming an Uber driver but over time the costs accumulate.
"Your cost [in becoming an Uber driver] is not immediate, but there is a lot of damage to the car," he said, adding a $20,000 car's value will halve in a year's time if a driver uses it to carry Uber passengers full-time.
Morningstar analyst Gareth James said while the taxi industry was ripe for disruption, it would be difficult for a local company to disrupt Uber because of the "network effect" it has had as a global company.
"I think the key with this kind of industry is creating a network effect. What's key is achieving scale," he said.
"Uber is a huge, huge company with an extremely deep pocket and it can outspend most of its competitors."
London Rides hopes to have 1000 vehicles on the road by 2018. There are currently 5500 traditional taxis in Sydney and 14,000 Uber "driving partners" in NSW.
London Rides has been allowed to provide the service under the NSW government's ridesharing reform which means hire cars are no longer required to hold a licence plate which costs $8235 a year.
However the NSW Taxi Council disputed the London Rides cabs are "hire cars" as they are designed to operate as taxis and if the NSW government accepts they were hire cars, it would be making a "mockery" of the new laws that say rank and hail services can only be performed by taxis.
"The NSW Taxi Council does not accept that this vehicle is a 'hire car' as it is clearly designed to operate as a taxi, and if the London cab operators are seeking to have the vehicle classified as a hire vehicle, then they are doing this simply to avoid the regulatory costs of operating a taxi," a spokesman said.
