Ride-share service Uber has been accused of spying on its Melbourne passengers by tracking them and accessing personal information.

Passengers who use the smartphone application can reportedly be tracked 24/7 and their entire contact book accessed, News Corp reported.

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An Uber insider described the company’s newly-released privacy policy as a “spy statement”, which enabled the company to glean important information about the phone and pass on details to marketing companies and police.

Uber can reportedly access your phone book. Photo: Shutterstock

Under the changes, if the Uber app and the GPS are turned off, it can still detect a customer’s location from their internet address.

“We may also collect the precise location of your device when the app is running in the foreground or background. We may also derive your approximate location from your IP address,” the privacy policy read.

Legal action has commenced in the US over the new policy.

Uber responded in a statement, saying: “We care deeply about the privacy of our riders and drivers. It’s why we’re always looking at ways to improve our practices.”

In May, the company considered legal action to challenge a tax office ruling that requires its drivers to pay GST in line with taxi operators.

The company was classified as a taxi service under a crackdown on electronic businesses, and its 9000 Australian drivers now had until August 1 to get an ABN and register for GST.

The company disagreed with its classification and said its drivers, who typically earned $30,000 a year, should not pay tax on their first dollar earned.

Australian Taxi Industry Association CEO Blair Davies said many Uber drivers could be underinsured and did not face the same safety checks as taxi drivers.

There have also been riots in France by taxi divers protesting Uber.