‘It’s a slap in the face’: Uber drivers label rise of minimum fee ‘minuscule’

UBER is hiking its fees in Australia for its ride-sharing service, with the company introducing a new booking fee and an increase to its minimum fares due to “operational costs”. Sydney will be hit the hardest.

The latest Uber fare rises illustrate how much more expensive it is to live in Sydney.

UBER is hiking its fees in Australia for its ride-sharing service, with the company introducing a new booking fee and an increase to its minimum fares due to “operational costs”.

The new 55 cent booking fee, which is part of the money grab, is tipped to earn the tech giant a whopping $22.8 million per year.

Meanwhile drivers have said the fee changes are an “insult and a slap in the face” and will have a “minuscule” impact on their revenue.

The changes come into effect from June 9 in Australia, with Sydneysiders hit the hardest.

The minimum fare will jump from $8 to $9 in Sydney, which includes the 55 cent booking fee. The booking fee is paid by the passenger to the driver in addition to their fare, and will show up on their receipt at the end of each trip.

Of the new booking fee, 5 cents is GST which the driver will need to pay to the Australian Taxation Office while the remaining 50 cents will go straight to Uber.

A rising number of people prefer to use Uber rather than taxis in Sydney. Picture: AAP Image/Joel Carrett

An Uber spokesman told Business Daily the fee increases will cover “operational costs”.

“Following recent roundtable listening discussions with driver-partners in Sydney, we heard that an important improvement Uber could make to the driving experience would be increasing the minimum fare. As a result, we are raising the minimum fare in Sydney from 9 June,” he said.

“Uber is also introducing a 55 cent booking fee to assist with the operational costs associated with providing a ride-sharing service.”

According to Roy Morgan research released exclusively to The Daily Telegraph in April, the number of Uber trips in Australia has more than doubled from 1.5 million per month last year to a staggering 3.8 million per month today.

This equates to 45.6 million trips per year, which will all be slugged with the new 50 cent booking fee increase, resulting in an extra $22.8 million in revenue for Uber.

Minimum fares in Melbourne and Brisbane are being increased from $6 to $7.50, while passengers in Adelaide and Perth will have their minimum fares hiked from $5 to $7.

This makes Sydney the most expensive city in Australia with a minimum Uber fare of $9.

“Pricing for point to point transport in different cities has always varied,” the Uber spokesman said.

In addition to the new fees, Uber also deducts a 20 — 25 per cent “service fee” from its drivers from each fare.

Peak body The Rideshare Drivers United said the new fee changes were a welcome step in the right direction but were too “minuscule” to make an impact to drivers’ earnings.

“This very small minimum fare increase is not really going to make much of a difference to drivers bottom line. Most drivers we talked to view this latest Uber increase as an insult and a slap in the face,” the organisation said.

“Even after this small increase, base rates are still at very low unsustainable levels, leaving drivers with well below minimum take home wage.”

In Melbourne, the company has raised its minimum fee from $6 to $6.95.

Ride Share Drivers United labelled it “a slap in the face” and “minuscule”.

“This is not really going to make much of a difference to drivers’ bottom line and most drivers we talked to view this latest Uber increase as an insult,” RSDU said in a statement.

A spokesman said: “Uber drivers factor in the cost of their car maintenance, petrol and insurance, their wage is typically well below award levels in the transport and hospitality sectors.”