Uber now legal in NSW

The New South Wales government has followed Canberra's lead by legalising the 'low-cost' UberX ride-sharing service, which has become a huge thorn in the side of the taxi industry.

In a Facebook post, NSW Premier Mike Baird declared: "We’re legalising Uber".

It's estimated that around 500,000 Sydneysiders use UberX at present and NSW's top politician was unapologetic about the new legislation.

"The digital revolution is disrupting and transforming the way business is done right across the world, and the taxi industry is a prime example," said Baird.

However, the NSW government will impose a $1 levy on all UberX fares for the next five years, to fund a $250 million compensation package that would see taxi owners compensated by up to $20,000 per plate.

Uber drivers won't be able to use taxi ranks under the new legislation.

"The thing that has made the taxi/ride-share situation difficult to manage is that, unlike other businesses facing disruption (say, video stores facing disruption from Netflix) the government has sold and regulated taxi licence plates and has a responsibility to offer some protection for the mums and dads and investors who own these plates," said Premier Baird.

The Uber ride-sharing revolution is a love it or hate it service. Taxi drivers hate it, denouncing it's an 'open to anyone' strategy that devalues their business, while passengers love it and are flocking to the high-tech service by the hundreds of thousands because they say it's a more affordable, reliable and modern alternative to traditional cabs.

Users download an app and can follow the progress of cars on a visual map on their smartphone if they're looking for a ride, and many customers say the cars are cleaner than traditional taxis and the drivers more courteous.

Users can rate the car and driver after each trip, which is one of the ways Uber customer service levels are kept in check.

But while it's good news for users of the service, which is still illegal in Victoria and Queensland, NSW Taxi Council chief executive Roy Wakelin-King told the ABC the details of the legislation needed further scrutiny.

"My members are keen to find out what the story is. We're really wanting to see what the detail is here," he said.

Baird insists the NSW government is "helping consumers to win through having more choice in how they travel and simultaneously being fair to taxi owners as they transition into the future."

If this compromise works and all parties are happy, it could be a blueprint for other states and territories to follow.

Uber, a multi-billion dollar multi-national corporation, believes it's only a matter of time before other Australian states legalise the hugely successful ride-sharing service, which was founded in California in 2009 and now operates in almost 60 countries.