Hi All,
I posted this up in another thread, talking about how much Uber need to raise fares by, so that we were compensated for GST.
I posted the scenarios below.
I get slightly technical, so apologies for that. But my main message I want to convey is that Uber need to raise the prices by more than 10% if they want to compensate drivers for GST. (this has been pointed out numerous times throughout this forum)
In short, Uber need to raise fares by 12.821% to compensate drivers for being subject to the 10% GST, if Uber want to continue taking 20% off the total fare (which is inclusive of GST)
GST inclusive fare = Fare + Surge
GST amount = GST inclusive fare / 11
GST exclusive fare = GST inclusive fare - GST amount
Uber fee = 20% x GST inclusive fare
Therefore:
If Uber increasing fares by 10 % but still take their 20% off the GST inclusive fare, then we lose out by 2.5% still. Meanwhile Uber benefit by having a 10% increase in their Uber fees. (their gain is a straight linear increase)
If Uber raise the fare by 12.821% and take 20% off the GST inclusive fare, we come out even, and Uber come out 12.821% better off.
If Uber raise the fare by GST 10% and take their 20% of the GST EXCLUSIVE rate then it'll be even for everyone. Neither driver nor Uber lose or gain, and ATO get their GST.
If Uber keep the fares as is and us drivers need to pay out GST on the fares, we lose out by 11.364% (its not just 10% because Uber take their cut off the GST inclusive fare)
I ran the new fares that kicked in on Fri 7/8/15 and compared it with the fares before: (old - before 7/8/15 new - after 7/8/15)
Flag fall - old $2.50 new $2.50 increase 0%
$ per km - old $1.30 new $1.40 increase 11.54%
$ per min - old $0.35 new $0.40 increase 14.29%
Min fare - old $6.00 new $8.00 increase 33.33%
So as you can see, the increases are not a flat 10%. The total fare increase varies between different trips. I ran a few 'typical' trips on a spreadsheet and averaged out the fare increase old vs new. I got an average increase of between 10.5% - 11%.
Uber will be taking their 20% off the total fare (which is GST inclusive). Furthermore, we won't get any GST input credits from Uber's commission. Hence we will still be a small percentage worse off due to the GST application.
ie
if 10.5% increase - we are 2.06% worse off
if 11% increase - we are 1.61% worse off
Generally, you're better off if the trip is of a longer duration for the same amount of km's vs the old fare structure.