After quietly launching its ridesharing service in recent weeks, Uber may now be forced to discontinue the service after the New South Wales state government said it operates outside the state's Passenger Transport Act.
In a statement directly addressing the issue of uber ridesharing legality, Transport for NSW said "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," said a Transport for NSW spokesperson.
"Under the Act, such services must be provided in a licensed taxi or hire car, by an appropriately accredited driver, authorised by Roads and Maritime Services (RMS).
"The Act requires drivers to be fit and proper persons and vehicles to comply with specific standards to ensure an appropriate standard of safety for customers.
"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."
According to Transport for NSW, those found in breach of the Act face fines of up to $110,000 and possible prosecution.
The statement comes afterprevaricated on the issue of whether or not Uber ridesharing was operating within the law.
Speaking on Macquarie Radio last week, Minister Berejiklian said the state's Roads and Maritime Services had "existing regulations in place as to what makes someone a registered taxi plate owner or taxi plate driver" and that it depended on what Uber was calling its service as to whether it was within the law or not.
Speaking to ABC News 24 today, research fellow at the Centre for Independent Studies, Simon Cowan, said the law was not necessarily clear cut on Uber's ridesharing service.
"There is a grey area in this legislation where it's not clear whether they're operating a taxi service or a private hire company," said Cowan.
CNET has approached Uber Sydney for comment on the NSW state laws and its response to the Transport for NSW statement.
Update: While Uber Sydney has not responded to CNET's requests for comment, the company's official Twitter account has tweeted that it will continue to offer ridesharing in Sydney.
All @Uber_Sydney choices, including taxis, hire cars, and our ride-sharing trial, are still available to get you home safely.— Uber Sydney (@Uber_Sydney) April 30, 2014
This story was updated at 5:28pm AEST to include Uber's tweet.