Uber increases prices by 10 per cent to cover GST

RIDE-SHARING service Uber has been stung by the tax man and it’s passing the cost on to consumers. Here’s how much more you’ll pay for your next trip.

FILE - In this Wednesday, March 18, 2015, file photo, the Uber application displays cars available for a pick up at 100 Centre St on a cell phone in New York. In four years Uber has gone from nearly non-existent to more than 26,000 drivers, joining over 13, 000 New York City taxis. (AP Photo/Mary Altaffer, File)

AFTER losing its first battle against the Australian Taxation Office, Uber is literally passing the buck to its customers.

The ride-sharing service has been fighting the ATO over its ruling to force drivers to pay the goods and services tax (GST).

In a sign of defeat, Uber has announced today that it will charge about 10 per cent more for its UberX service effective immediately.

In a statement released this afternoon, general manager David Rohrsheim said while the company was continuing with its challenge in the Federal Court (which was launched last week), it had to increase prices to cover costs.

“To be very clear, Uber believes that all of its driver partners should pay their appropriate share of tax,” he said. “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 per cent in each Australian city where UberX is available.

“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.”

Last month, the ATO ruled people who used Uber to provide rides with their cars should pay GST from every dollar they earn, just like normal taxi drivers.

But Mr Rohrsheim said the classification of its “partner drivers” was unfair compared to similar services such as bike couriers, truck drivers and Airbnb hosts who do not have to pay GST until they reach $75,000 turnover in a year.

He said this would now create “unnecessary red tape” such creating an Australian Business Number and having to file quarterly business activity statements with the ATO.

“We feel that the position taken by the ATO jeopardises this flexible income, harms job creation, and is guidance that should not have been issued while a comprehensive federal government tax review is under way.”

Mr Rohrsheim claimed that despite having to increase prices by 10 per cent, UberX still remained about 25 to 35 per cent cheaper than most taxi services across Australia.

Originally published as Uber increases prices by 10 per cent to cover GST