Uber to increase driver commission rate by 2.275% to cover GST cost on Uber commission

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THE PROBLEM

Uber rates for the drivers are unfair. Uber corporation receives their commission (generally 25%) from the driver and does not pay GST on the trip cost. The Uber driver incurs the cost of the entire GST bill on the trip minus any GST credits that they may be able to claim (despite only receiving 75% of the income). This is grossly unfair given the already discounted fare rates for drivers. 

 EXAMPLE

The trip ride cost the passenger $20. The driver receives $15 income (75%) and Uber receives $5 income (25%). The driver pays the GST for both the commission he/she receives AND the commission paid to Uber (full cost of trip). The driver pays the full $1.82 GST. This is despite the driver covering the cost of registration, car maintenance, comprehensive insurance, petrol, use of car, their time & mints/water. Not to mention the driver is not being paid super, have any income protection nor is afforded paid sick leave or holiday leave.

SOLUTION

The driver commission rate should be increased by 2.275% (from 75% to 77.275%) to account for the GST payable on the current commission rate that goes to Uber (25%). The new driver commission should be increased by this amount to include the corresponding GST cost as per the commission rates. Given that the driver receives 75% of fare and Uber corporation 25%, the GST cost should be distributed the same way.

Using the "example" above, the ideal scenario would be:

i) Uber would receive $4.545 commission and would pay driver the 45.5 cents (GST cost of their portion of the income)  

ii) The driver would receive $15.455 commission and would pay full GST bill of $1.82 GST* (driver effectively pays 75% GST of current trip with new commission rate of 77.275%)

*GST payable figure does not account for any GST credits the driver may be able to claim. 

 DRIVER:

Current net position for driver on "example":

$15  - $1.82 GST = $13.18

Proposed net position for driver on "example": 

$15.455 - $1.82 GST = $13.635

UBER:

Current net position for Uber on "example": 

$5 and no GST payable

Proposed net position for Uber on "example": 

$4.545 and .455 to driver (equates to their portion of GST)

Please show your respect and care to your Uber drivers by supporting this impassioned plea to the Uber corporation. Many drivers are just trying to make ends meet, are new to the country or struggling to find employment. This is grossly unfair and it's time the Australian public stand up to large multinational corporations taking advantage of hard working Australians.



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