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Leaked documents from the NSW Government’s Transport for NSW department show that it is considering banning the use of mobile phones and electronic devices in taxis, including hands-free usage. There’s some worry that the draft policy could wipe out the nascent market for booking taxis via mobile applications.

Policy documents were recently circulated amongst industry stakeholders, discussing the use of electronic devices by drivers of public passenger vehicles, including taxis, buses and hire cars. Copies of these documents have been obtained by ZDNet Australia.

Drivers risk losing their licence if they’re found to have used any electronic devices while operating a taxi, including those being operated with a hands-free headset or an ear piece, according to the draft policy. In order to use mobile devices, drivers would have to pull over and engage the handbrake.

Parties familiar with the policy explained that it excludes equipment installed by existing taxi-booking networks, such as the terminal mounted on the dashboard, which is used by drivers to accept bookings. Taxi-booking application companies have declined to comment for this article, because the consultation process is ongoing.

However, some have said that taxi-booking applications would not survive if the policy is enacted as legislation. The difference between operating a taxi-booking terminal compared with accepting a booking from a mobile phone or other device secured by a cradle has also been questioned.

“They’re banning all these electronic devices in the cab, yet not banning the Taxis Combined terminal … [the drivers are] allowed to push the buttons and allowed to put payments through without pulling up handbrake and pulling over,” one source said.

Transport for NSW said that the draft policy is not intended to have any impact on the “lawful” operation of taxi-booking applications.

“The existing policy was introduced in 2006, and needs to be updated to deal with the emergence of new hand-held technology, like tablets,” the department said.

The consultation process follows a turbulent 2011 for the taxi industry, where the taxi networks and incumbent booking operators were rocked by the wild popularity of smartphone applications, such as Ingogo and goCatch, that help passengers to book cabs.

The technology was welcomed by both passengers and drivers, and an inquiry into the Victorian taxi industry nominated apps as a way to boost competition.

However, the NSW Taxi Council, which represents cab owners, accused the booking applications of being unsafe, because anyone could claim to be a taxi driver. The developers argued that their applications are safer than a regular cab ride, because the journey can be tracked via GPS and the mobile phone numbers of both participants are recorded.

Ingogo also validates all drivers before they join the system, while goCatch said it will release similar functionality in the future.