Uber to hike fares and add booking fee in Australian cities from June

The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken in Madrid on December 10, 2014. Reuters/Sergio Perez

Uber has declared a fare hike and an extra booking fee beginning in June to cover "operational costs.” A spokesperson for the ride sharing service announced that on June 9, passengers will be required to pay a 55¢ booking fee per trip, which will reflect on their receipts at the end of every trip.

The minimum Uber fare in Sydney will rise to $9 from $8, including the booking fee. In Melbourne and Brisbane, it will rise from $7.50 to $6, while it will increase from $6 to $8 in Canberra. The spokesperson for the service said they heard that a significant improvement that Uber could add to the driving experience would be an increase in the minimum fare.

According to Uber, which operates as an alternative to taxis, drivers have been requesting for the minimum fare rates to be raised. They will keep 5¢ to remit to the Australian Tax Office as GST and submit 50¢ to Uber. The percentage Uber takes from drivers depend on how long they have worked with the company, usually around 20 or 25 percent.

'Slap in the face'

RideShare Drivers United, which represents drivers, believe that the fare hike is a step toward the right direction. However, the group pointed out that it is a "minuscule one.”"Most drivers we talked to view this latest Uber increase as an insult and a slap in the face," the group said in a statement per Sydney Morning Herald.

RSDU argued that the base fare is still too low, leaving Uber drivers with take-home pay below the minimum wage. It added that the fare hike was not going to make much of a difference to drivers, Now, the group is pushing for a $9 minimum fare. It further stated that if conditions would not improve, it would keep on lobbying for change, reserving the right to take Uber Australia to the Fair Work Ombudsman.

The latest announcement from Uber came after Magellan Financial Group fund manager Hamish Douglass labelled Uber’s business model a “ponzi scheme” last week. He also forecast the company's less than 1 percent chance of survival in ten years.

Meanwhile, commentator uberxw reacted about the news on the UberPeople forum. "If your trip is not of minimum fare, your income won't change and you will have to pay more GST," a Sydney resident said. Finder.com.au notes the minimum fare hike only applies to customers in major cities.

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