First there was Uber, a smartphone application that allowed its users to summon and pay for a taxi without calling a dispatcher, and now there's "UberX," a low cost ride-sharing version of the app that allows anyone with a qualifying vehicle, adequate insurance, and a clean background to hit the streets and start collecting fares.

As one might expect, Since its local launch in September, the service has proved controversial with taxi groups and the City of Toronto. Uber identifies itself as a technology company, not a taxi service, and believes it should therefore be exempt from licensing regulations. The city isn't so sure, however.

In a statement issued shortly after the launch of UberX, the City of Toronto said it had "significant concerns" that the service might be operating in contravention of bylaws and that the matter would be investigated by its legal department.

"Based on the information currently available, the City is concerned that the UberX service may pose a serious safety risk to the public, including those who are signing on as drivers," the statement said, citing the inspections, background checks, and training given to all taxi drivers licensed by the city.

Uber says it isn't a taxi company and therefore does not need to comply with regulations that govern private transportation providers, but the company does screen its UberX drivers and vehicles, says Lauren Altmin, an Uber spokesperson.

"It's actually a very stringent process that we've developed, and we're very proud of it," Altmin says. "All of our driver partners undergo stringent background checks, so this includes criminal screenings at both the federal RCMP and local police level as well as a full review of the driver's motor vehicle record. These checks go back to the age of 18, which is the maximum allowed by federal law."

UberX drivers must be 21 years or older, a Canadian citizen or permanent resident, and have a four-door vehicle manufactured after 2005 with valid auto insurance. There's a chance, however, that using a private vehicle for commercial purposes like ride sharing may invalidate some personal insurance policies. UberX is backed by a $5 million company insurance policy, but drivers are encouraged to check their paperwork before signing up, Altmin says.

Phil Chao works in the clerical department of a Scarborough hospital. He has been a part time UberX driver for about two months. Once he had passed screening, he was given a special Uber phone that allowed him to receive incoming fares. He says he is given 10 seconds to accept ride requests within a 10 minute drive of his location. So far, the experience has been good, he says.

"Because it's an app for a smartphone ... it keeps it pretty safe for us because we know there aren't any people that can't afford a phone or aren't approved for a credit card, they're not allowed to use Uber so we're not getting any of that questionable crowd," he says. "For me it's been really positive. All my fares have if not been amazing then really great."

Passengers are rated out of five. Messy, rude, or difficult customers may be given a lower rating that may affect whether they get picked up in future. Drivers are not obliged to accept ride requests, or give a reason for not doing so.

Uber takes 20 percent of every UberX fare, which is automatically deducted via credit card and designed to be cheaper than standard Uber rides, but Chao says the concept is still a good way to make extra money.

"I'm making enough to make the time worth it, in no way am I losing money doing this," he says.

Chris Bateman is a staff writer at blogTO. Follow him on Twitter at @chrisbateman.

Image from Uber's Facebook page