Uber fares to rise in UK as 20% VAT applied

The change comes just two weeks after TFL increased prices for transport across England and Wales

Uber fares will rise on Monday as VAT of 20 per cent will be applied to rides (Getty)

Uber fares across the UK are set to rise from Monday night as VAT of 20 per cent will be applied to all rides booked via the popular app.

The change follows a high court ruling last December which said that Uber could not be viewed as an agent but must be regarded as a contractor.

Due to this ruling, Uber said fares would have to increase, adding that the additional VAT charge will be included in the price and not displayed separately to the passenger.

In an email the company sent to users of the app, Uber explained the changes that will occur from Monday night – namely that the passenger will now contract directly with Uber for the transportation services instead of the driver.

An Uber spokesperson told The Guardian: “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 spokesperson also suggested that Uber may subsidise some fares as fare rises would vary from city to city, further adding that though the original ruling only applied to Uber in London, the changes are being made nationwide in case of further legal changes.

Uber had already raised its fares in November 2021 by 10 per cent in an effort to attract more drivers, after a reduction in staff during the pandemic.

Monday’s price change will come just two weeks after Transport for London increased its fares for public transport by an average of 3.8 per cent across England and Wales, and an average of 4.8 per cent in London.