Uber increases taxi prices by 20% from today after the court orders VAT

Taxi rental apps like Uber will have to increase fares from 11:59pm tonight due to legal changes, but how much more you’ll have to pay depends on the city you live in

A man poses with a smartphone showing the Uber App for carpooling
VAT is 20%, but fares may not increase in full

Taxi rental application Uber will increase fares tonight as it forces VAT on trips.

Uber does not charge VAT until trial last December ruled that the taxi app and its rivals had a “contractual obligation” to offer itineraries in London.

As a result, Uber riders have contracted with Uber and not drivers as of 11:59 p.m. tonight.

VAT is 20%, but The Mirror understands that fares won’t increase by the full amount and increases will vary by region.

While the ruling technically only applies to London, Uber will make the changes across the country.

“We have completed the changes to our business model as required by law,” an Uber spokesperson said.

“Other operators in London are also required to make changes to their model to comply with relevant legislation.

“Uber operates in a fiercely competitive market and we are committed to always providing affordable rates to consumers. As always, passengers will be billed for a ride before booking a journey.”

Last November Uber increase its price by 10% to try to get more drivers to sign up.

The price increase will affect London, and peak time fares for Gatwick, Heathrow Luton and Stansted airports could increase by 25%, Uber driver has been said.

The minimum fare has been increased from 50p to £5.50.

Uber last raised prices in 2017.

The shortage of Uber drivers means ‘price spikes’.

During very busy times, Uber may increase the regular tax rate by 1.8 times.

The lack of Uber operators also means an increase in canceled trips and generally longer taxi wait times.

Part of the problem is that taxi drivers are increasingly using a variety of apps, not just Uber.

Uber is currently one of the cheapest taxi apps available to customers, meaning drivers are motivated to cancel an Uber ride if they get a better deal from a fare on another app.

Uber cuts fares by 25%, up from 20% after a court ruling considers 70,000 of its drivers as employees .

This means they have to pay them for workplace benefits such as minimum wage and holiday pay.

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Read more Uber increases taxi prices by 20% from today after the court orders VAT

Fry Electronics Team

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