New UK ruling could hike Uber ride prices by 20%
As cab companies across the UK are struggling to meet the ongoing demand, the rate of rides could increase an average of 20 per cent. Uber is luring drivers in London with a 10 per cent rise in rates. After a high court judgement, Uber said they might have to charge customers 20 per cent more to push the ride cost.
Not only Uber but other private hire companies may need to implement the same additional fees to cope with VAT, which may have far-reaching consequences. Judge ruling the matter declared Uber drivers should be treated as workers, not contractors. So, the worker level pay is added throughout the company line with VAT and tax.
First time since 2017, ride price has been increased, and it will be different for different areas of the UK. Ride demand has increased in cities outside London, according to Uber. Birmingham and Nottingham have seen a 24 per cent rise and a 40 per cent rise in demand, respectfully. The capital was up by 20 per cent.
As the holidays are here, riders need to make decent enough income to support families. After the implantation, they could earn £20 to £20 an hour on average. Lord Justice Leggatt said the ruling is favoured towards a contractual bond between the drivers and passengers.
We only see a passenger making contract for a ride, but after the ruling is passed, the driver will have a similar opportunity. They will accept customer booking as a contract, which gives a fair chance to private hires such as Uber.
As Uber is a VAT-registered business, the ruling pushes it to charge tax from customers. Uber spokesman said 'every private hire operation in London will be impacted by this decision, and should comply with the Supreme Court verdict in full.
Another spokesman for private hire in London talked about careful consideration of the court's judgement and taking smaller steps. Ensuring court ruling goes perfectly, and regulations can comply with the decision changes to their way of working are required.
General secretary of the App Drivers & Couriers Union (ADCU), James Farrar, said the system needed a fix long ago. Uber and other private hire companies misused the broken business model rather than fixing it. So, the misclassification was doubled down by the court. Worker rights are practised heavily now, and it is much needed. To ensure passengers' safety and workers' rights, VAT avoidance is not the way to go.
James Farrar said the victory will "make misclassification unlawful, transform the London minicab industry for the better and finally eradicated sector-wide worker rights abuses."
As the price of fuel took a worldwide hike before gradually coming down, Pipeline hacks and other issues in the infrastructure, the private hiring companies were struggling to cope with increased demand. They are desperately trying to get more drivers signed up for the job. The 20 per cent increase in fare will interest more drivers and ensure workers get the opportunity to discuss the task in a proper contractual matter.
Before we could see an average level of service, an additional 20,000 extra drives are needed in the workforce across UK private hire. A report shared by CNBC said, since the demand grew, a journey to the airport during peak time increased 25 per cent.
Since the 2012 launch of the Uber app in London, drivers have complained about pay and workers rights ever since. Many drivers switched to delivery mode instead of carrying a passenger. They reported the pay is better than carrying passengers from point A to point B, and they don't even have to deal with people in between.