Amidst a landmark legal battle and ruling by the Australian Taxation Office against Uber, the ride-sharing startup has announced a price increase of 10% for UberX rides in Australia overnight.
The ruling was explained by Uber Australia’s general manager David Rorsheim in an email to customers yesterday evening.
“The Australian Taxation Office recently decided to release guidance suggesting that uberX ridesharing driver partners need to register and remit GST from their first dollar earned.
“To be very clear, Uber believes that all of its driver partners should pay their appropriate share of tax. 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.”
As Rorsheim confirmed that Uber will fiercely challenge the new ruling, a price hike of 10% to cover future costs – if Uber’s challenge does not prove fruitful – has been applied, effective immediately.
“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% in each Australian city where uberX is available.”
Rorsheim criticised the ATO’s decision as a tax affecting “everyday Australians“, rather than the service itself. Uber Australia’s GM also maintained, however, that UberX fares would still be competitive to taxis in Australia – undercutting typical taxi prices by up to 35%.
Taxing thriving startups – such as Uber and Airbnb – proves to be a fickle beast: when there’s little regulation, and few preceding cases of adapting laws to new technological economies, things get real messy, real fast.
Via SMH.
Lead image by Pablo Blazquez Dominguez via Getty Images.
