Uber fares to rise in UK as 20% VAT rate is applied

Change comes after high court ruling that Uber should be regarded as a contractor, not an agent

Uber fares across the UK are to rise sharply from Monday night when VAT of 20% will be applied to rides booked via the app.

The change comes after a high court ruling last December that Uber could not be viewed as simply an agent but should be regarded as the contractor.

Uber said fares would have to rise. The additional VAT will be charged within the fare and not displayed to the passenger.

It is understood that Uber may effectively subsidise some fares, as a spokesperson said fare rises would vary from city to city, but refused to divulge further details on pricing on the grounds it was competitively sensitive.

App users have been notified on a change in the terms and conditions which will mean passengers contract directly with Uber, rather than the driver, from 11.59pm on Monday.

While the original ruling only applied to Uber’s business model in London, its biggest market, a spokesman said it was applying the changes nationwide in anticipation of further legal changes.

Other operators will be legally required to follow suit in London, although they have yet to confirm plans.

An Uber spokesperson said: “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.”

The changes came after judges initially queried Uber’s status during a court case where the multinational company was fighting a judgment that drivers were workers with rights.

The rise in fares comes after Uber hiked prices in the capital by 10% last November to attract more drivers. It will also hit Londoners’ pockets weeks after a nearly 5% fare rise on public transport in the city.

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