Uber’s path through the Australian courts has not been smooth. The latest ruling around the ride-sharing service will see its 50,000-plus drivers paying 10 per cent GST on top of their 25 per cent commission to Uber – a tax that will most likely be passed on to customers.
Uber originally took legal action to avoid paying GST in 2015. It argued that because enterprises that earn under $75,000 per year don’t need to register to pay GST, and as most of their drivers earn less than $20,000, they aren’t eligible.
But there’s one profession that is excluded from that $75K threshold: taxi drivers, who need to pay GST regardless of their income.
Uber had been arguing that it wasn’t a taxi service, but today the federal court decided otherwise.
In court, six separate definitions of the word “taxi” were discussed, before Justice John Griffiths put an end to the debate, announcing today, that “the ordinary meaning of the word ‘taxi’ is a vehicle available for hire by the public and which transports a passenger at his or her direction for the payment of a fare.” In other words, Uber is a taxi company.
“We are disappointed in the Federal Court’s decision today,” an Uber representative told Broadsheet. “We are reviewing the decision and will provide our driver-partners with more information as soon as we can.”
So after all that, who’s going to get put out by this ruling? Uber, its drivers, and its customers. After the ruling that launched its original 2015 court action stating they had to pay GST, Uber upped its prices by 10 per cent. So prepare yourself for further increases and mourn the loss of that tax advantage you didn’t know you had.