NSW government crackdown on UberX drivers

The suspension of 40 UberX drivers and thousands of dollars worth of fines are the first steps in a major crackdown on illegal ride-sharing in NSW.

Covert measures helped catch the drivers allegedly using private vehicles while working for the popular app Uber, according to NSW Roads and Maritime Services (RMS).

RMS safety and compliance director Peter Wells said on Monday that vehicles transporting public passengers must be registered if they want to operate for commercial or business purposes.

He said they needed to pay the proper rates and that insurance policies were put at risk, or made invalid, "by a vehicle being used for an illegal activity that hasn't been disclosed to the insurer".

Mr Wells said in the case of a crash and subsequent medical bills, people would be at the mercy of the insurer if they chose to honour the payment for an illegal activity.

He said there was a concern for safety if there were insurance risks, and no medical or criminal checks on drivers.

The vehicle suspensions come into effect from midnight on Wednesday for three months.

Any of the 40 vehicles found operating after October 1 will be treated as unregistered and uninsured, and cop a fine of $637 per offence.

Uber is urging the government to regulate the industry sensibly.

"We are shocked that the Roads and Maritime Services did not appear to show these drivers any due process and we are reviewing the legal options to reverse this decision," Uber said in a statement on Monday.

The crackdown follows recent protests calling for Uber drivers to pay the same licence and registration fees as taxi drivers.

An independent task force has been established to assess the future of the state's point-to-point transport industry, which includes taxis, hire cars and ride-sharing.

The board will report their findings to the government in October.