Uber fares could rocket 20 per cent as ride-hailing app foots VAT bill
Uber could hike prices by as much as a fifth from tonight as the ride-hailing giant faces fresh VAT charges.
It comes after the company was forced to implement changes following the High Court ruling last year, which said that Uber could not be viewed as an agent but must be regarded as a contractor.
At the time, Uber warned that fares would have to rise, adding that the additional charge would be included in the price and not displayed separately to the passenger.
An Uber spokesperson told City PM: “We have completed the changes to our business model as required by law. Other operators in London are also required to make changes to their models to comply with the relevant law.
“Uber operates in an intensely competitive market and we are committed to always offering consumers affordable prices. As always, riders will get a trip price before booking their journey.”
Uber were unable to confirm any further details about its pricing strategy, but are notably the only operator who has made these changes to comply with the law. Rivals like Bolt and Ola are yet to make these changes.
From a customer perspective, the price hike comes at a time where the cost of living is hitting all areas of life, making more and more people likely to turn to black cab alternatives in the city or public transport.
The ride-hailing industry at large has come under increasing pressure to meet rising post-lockdown demand with dwindling driver numbers.
Uber notably raised its fares in November 2021 by 10 per cent in an effort to attract more drivers, after the pandemic hit driver numbers hard.