Come at the $50 billion+ ride-sharing royalty, you best not miss – or so warns Uber over yesterday’s news, where the service’s drivers will be forced to register and pay for GST on all rides. It’s a move that could hike Uber’s prices by 10% from August 1, and one that would all but nullify the service’s recent price cuts.
Daring to meddle with one of Silicon Valley‘s most successful and most controversial startups has Uber bosses and [taxi] drivers like:
Seeing the Australian Taxation Office‘s threatened 10% price hike on their absurdly profitable niche market, Uber raised the ATO a sure-fire fight and legal challenge in protest.
According to the Sydney Morning Herald, the ride-sharing service has already warned its some 9000 drivers to hold off on registering for GST – at least until Uber gives the ATO a run for their [finely taxed and calculated] money. “We disagree with the ATO’s interpretation,” Uber Australia’s general manager David Rohrsheim said today, “…and we will be challenging this. So stay tuned.”
Rohrsheim called bullshit on the new ruling, branding the move as unfair, and one which should have been dealt with as government policy would be, rather than as an ATO decision. CPA Australia’s head of policy, however, expressed doubts at the service’s ability to talk their way out of the ATO’s decision, saying Uber would have a hard time distinguishing itself from other services which currently do face GST: “If it looks like, smells like and quacks like a taxi service, then it probably is,” Paul Drum said.
And besides – having the ruling be treated as government policy? When taxing on sanitary products and new media services such as Netflix are now staples of the GST, how safe could the enormous cash cow of Uber possibly be?
Lead image by Pablo Blazquez Dominguez via Getty Images