07/08/2015 - 15:14

ATO decision means Uber fare hike

07/08/2015 - 15:14

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Rideshare giant Uber has announced it will increase fares 10 per cent while it battles the Australian Taxation Office’s recent GST ruling in the Federal Court.

ATO decision means Uber fare hike
The US giant has been valued at more than $US40 billion.

Rideshare giant Uber has announced it will increase fares 10 per cent while it battles the Australian Taxation Office’s recent GST ruling in the Federal Court.

The company said today's move was to preempt any additional costs drivers might face depending on the eventual outcome of the court battle.

A 10 per cent increase would mean that an evening trip from Northbridge to Bayswater would increase in price from $15 to $16.50, although the company said fares would still be lower than those of competitors.

Nationally, UberX fares would be about 30 per cent cheaper than a taxi, the company said.

The rise comes months after Uber announced a major fee reduction in Perth, which it hoped would begin to make the company competitive with public transport.

Earlier this year, the ATO ruled Uber drivers would not be treated seperately from the business for GST purposes.

By contrast, contractors with other “share economy” companies such as Airbnb, and those in traditional industries such as truck drivers, don’t have to pay GST until they reach a turnover of $75,000.

A spokesperson for Uber said the company would continue to fight the ATO's decision.

“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,” he said.

“ It also means that drivers who share just a few rides each month may encounter unnecessary red tape such as the filing of 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."

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