A month ago Uber declared it wouldn’t offer UberX ride-sharing services in South Australia, claiming Government costs and red tape were too prohibitive.

Despite this public claim, two weeks ago the company started running free UberX services, which meant its drivers wouldn’t be in technical contravention of South Australia’s passenger transport laws.

However, with ride-sharing set to become legal in SA in just a few weeks – on July 1 – Uber has made the provocative decision to start charging for rides.

The move, which began last Friday night, means the Government is seeking to identify and prosecute UberX drivers who use their own cars to offer rides booked through the Uber app.

From July 1 ride-sharing will be legal, but only for drivers who have paid a fee and gone through a series of checks, including government-mandated national criminal history checks, a driving history check and a vehicle inspection.

Also from July 1, each taxi or UberX trip will attract a $1 levy, which is designed to fund compensation for the taxi industry in the face of the new competition.

But if UberX continues to flout the regulations after July 1, then it can be assumed its drivers won’t collect the levy as to do so would be outing themselves to the government for operating illegally.

And Uber is giving every indication that it won’t be prepared to collect the levy.

“It is concerning that transport could be made less affordable through the imposition of a consumer levy to pay compensation to a taxi industry that its own national body acknowledges is growing,” said Tom White, the General Manager of Uber Adelaide, in a statement to InDaily.

“We will continue to work with Government to make sure consumers and new industry participants are not made to foot the bill for compensation that, frankly, is not in any way warranted.”

The taxi industry is also worried about the levy and how it will be collected, with the added concern that “cowboy” behaviour by Uber might hand the ride-sharing company a price advantage.

Taxi Council president Jim Triantafyllou told InDaily the industry and Government were still negotiating how the levy would be collected, given the system involves drivers, owners, taxi companies and third-party apps such as GoCatch which allow customers to book directly with individual drivers.

“It might not be do-able,” he said.

“This is the problem with disruption… When the booking is made through GoCatch (for example), that is between GoCatch and the driver – who has responsibility for that booking?”

Triantafyllou, who stressed he did not want to be seen to be criticising the Government, said he was concerned about the “cowboy” behaviour of Uber in ignoring South Australian laws.

“If they are going to be operating illegally (after July 1), then the dollar levy won’t be able to be received from them,” he said.

The Government says its Ministerial Advisory Committee, which includes representatives of the chauffeured vehicle, taxi and ridesharing industry, including new entrants such as Go Catch, was “working closely with the DPTI on the implementation and collection of the levy”.

Triantafyllou says he’s been in meetings that included Uber representatives, who remained silent on the issue of the levy.

He said the industry was also concerned about how Uber cars would be identified after July 1. The current proposal for a sticker raised questions, particularly the ease with which it could be removed or transferred to another vehicle which might not have been inspected.

If Uber cars can’t be identified, he argues, they could flout regulations by touting for work and taking business quarantined for taxis. Under the new regulatory regime, only taxis will be able to be hailed on the street or operate at the airport, for example.

A Government spokesperson said the Department of Planning, Transport and Infrastructure “continues to conduct compliance activities for breaches to the Passenger Transport Act” by Uber drivers.

The spokesperson said there will be “significant penalties” for any booking service breaching regulations, including the removal of their accreditation to operate in SA.

“The community expects us to enforce the law and put safety first,” the spokesperson said.

“The South Australian regulations have been carefully developed to ensure the safety of all passengers and road users by setting minimum standards for drivers and vehicles – we want to ensure their drivers are safe and that the vehicles are safe.

“The regulations are also aimed at ensuring the ongoing viability of the existing industry while enabling the introduction of new entrants into the market, such as by retaining exclusive rights for taxis and hire car drivers to operate at the airport.

“Our regulations and costs are very similar to other states which have legalised new entrants to the market and it is disappointing that Uber is ignoring the need for safety on our roads.”

Uber argues that its drivers have already gone through criminal history and driving history reviews, as well as vehicle inspections, and asks why the Government wasn’t concerned about safety when its drivers were offering free rides.

It also points to a Government-supported carpooling scheme, which it argues requires no background checks.

Uber’s Tom White claimed earlier in the week that “thousands” of South Australians had taken up a free ride over the past few weeks, with “hundreds” of locals signing on as drivers.

“This incredible uptake of the service demonstrates the demand for safe, reliable and affordable transport alternatives in Adelaide,” he said.

“We are still hopeful that the Government will be able to come up with a fast and cost-effective signup process when their new laws are due to begin 1 July.”

The implication here is that, if the Government doesn’t do as it’s told, Uber will simply continue to defy the law – and that’s going to hurt, not only the Government, but the cost-competitiveness of taxi drivers who will be obligated to start collecting the $1 levy.

The Government says it is pursuing UberX drivers operating illegally, but Uber has shown repeatedly that it has no qualms sailing onwards despite legal action.

Uber has also shown itself capable of winning some of these legal battles, including in a recent case against an unaccredited Uber driver brought by Victorian taxi authorities.