Cost Sharing and Profiting from Driving
Angry Driver
Of recent I have been talking about LifeSocial and how it works. I've had Taxi drivers and others ask "isn't that illegal?" or "That cannot be done."
Well it is done and it is working. It seems we live in a mis-informed society. I very calmly explained that yes carpooling / ridesharing is legal but it has rules just like anything else.
Recently Transport for NSW said in a statement "The law is clear and has not changed: if a NSW driver is taking paying members of the public as passengers, the driver and the vehicle must operate in accordance with the Passenger Transport Act"
"However, these laws do not apply to, for example, a group of friends sharing expenses or a car-pooling arrangement between colleagues sharing a ride to the office, function etc."
People often rideshare around Australia as an alternative to the higher costs of seeing Australia, and there is nothing wrong with that.
Despite the fact drivers cannot profit from giving lifts, drivers are entitled to recover costs of the trip from the other carpoolers, provided they agree and know up front.
Costs you are entitled to recover are:
  • Fuel Costs
  • Tolls
  • Wear and tear on the vehicle, including Tyres, Oil, depreciation of the vehicle
There are a few things to consider when deciding to carpool / rideshare.
You are going to want to make sure your Insurance is in check and that they will cover you and other passengers in a carpooling scenario.
After discussing the issue with multiple insurance providers it became quite clear that most private vehicle insurance would not cover you or others if you are operating in a business like nature without having the appropriate insurance.
Insurance providers do recognise the difference between recovering costs and running a business like operation, in the article 'What insurance is available if there is an accident' we discussed with NRMA and other insurance providers where they were ok with drivers recovering costs.
It's still recommended that you discuss this with your insurance provider before being the driver taking your first carpool / rideshare trips to be sure what they define as a business.
You will also want to make sure your car is registered, road worthy, clean and that your drivers license permits you to carry other passengers. There can sometimes be restrictions placed on a persons license, such things like only being on L plates or Red P Plates.
So the next time someone tries to tell you that carpooling / ridesharing is illegal you can safely laugh hard.
Being a driver in a carpool / rideshare is rewarding. You do meet new people, you do lower costs, you help the environment but it's important to play your cards right.
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