Uber raised its fares sharply starting this week after changes to its terms and conditions that impose a 20% VAT charge on UK journeys. The company is also introducing a surcharge on journeys in the United States due to rising fuel costs. It’s not yet been confirmed if fuel rises will further hike prices here in the UK, but it likely can’t be ruled out. Meanwhile, the VAT change follows a high court ruling last December which said Uber as a company can’t be viewed as an agent but is, instead, a contractor.
‘When you take an Uber ride, you will contract directly with Uber for the transportation services, rather than the driver – we’ve updated our user terms to reflect this,’ explained Uber in an email to customers. Due to this ruling, Uber said fares would have to increase, adding that the additional VAT charge will be included in the price and not displayed separately to the passenger. Over in the States, all customers except those in New York City will have to pay the surcharge of either 45 cents or 55 cents for each Uber trip from March 16. But there’s no VAT price hike to take account of. The surcharge has been brought about by fuel price increases caused by Russia’s war in Ukraine.
The company said that the extra money charged will go directly to the workers and that the surcharge would last for at least 60 days after which it would make adjustments based on feedback from workers and customers. The move comes as many Uber drivers have been protesting on social media over high fuel costs that have been eating into their earnings. Western sanctions following the invasion of Ukraine by Russia, a major oil producer, had crippled the global oil trade and could further lift fuel prices.
It’s unclear yet if Uber will further raise its prices in the UK where fuel prices have similarly skyrocketed. ‘We know rising fuel prices are a challenge, and we’re actively considering how we can support drivers. We’ll have more to share soon,’ an Uber spokesperson told Metro.co.uk. UK petrol prices could continue going up and may hit £2.50 a litre with diesel topping £3, experts told MPs on Monday.
