After cutting fares in Sydney – and the amount it pays drivers – during winter by 10%, Uber in Australia is now putting prices back up.
Yesterday, the ride-sharing giant announced it was increasing prices by 10% for UberX, attempting to shift some of the blame to the ATO which now insists drivers pay GST, although when it cut prices on June 17, the company said they would increase again on August 2.
“To be very clear, Uber believes that all of its driver partners should pay their appropriate share of tax,” said Uber general manager, David Rohrsheim.
“However, we believe driver partners and riders are being unfairly singled out, and so Uber is challenging the ATO’s position in the Federal Court of Australia.
“In the meantime, given the additional costs that might be incurred by driver partners as a result of the ATO’s guidance, UberX prices are increasing today by approximately 10%.
“This is not a tax on Uber, but rather an additional tax on the thousands of everyday Australians who earn a flexible income by sharing rides on the Uber platform.”
The announcement follows the recent ruling by the Australian Tax Office that Uber drivers had until August 1 to begin charging GST or risk being hit with a $3600 fine.
In its interpretation of existing tax law earlier this year, the ATO found that “people who provide ride-sourcing services are providing ‘taxi travel’ under the GST law” and would need to charge GST on the full fare fare as well as report income in their tax returns.
“[This] puts these driver partners in a different position to the likes of truck drivers, bike couriers, and Airbnb hosts, who typically do not have to collect GST until they reach $75,000 in turnover a year,” said Rohrsheim.
The ride-sharing company has launched legal action against the Australian Tax Office accusing the ATO of “clearly and unfairly targeting” its drivers and seeking to overturn the GST demands on its drivers.
Rohrsheim says it has created “unnecessary red tape” for UberX drivers who now have to file quarterly ATO business activity statements.
Anecdotally, since Uber cut UberX driver incomes by 10%, forcing its drivers to work longer hows to make the same amount of money, regular users have noticed an increased in times when the company’s controversial “surge pricing” has applied.
Surge pricing increases the cost of a ride when demand is high in a bid to attract more drivers onto the roads.
Users Business Insider spoke to say they’ve seen UberX more commonly priced at 1.2 or 1.5 times the original price since prices were cut by 10% two months ago.