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Uber announces major price change for Aussie customers

Fares are expected to be 5 per cent cheaper as the ride-sharing service changes its pricing model

Uber passengers waiting for car next to insert of a phone with the Uber app open
Uber is changing its pricing model and it's set to benefit Aussie customers. (Source: Getty)

Uber has revealed Aussie customers will soon be paying, on average, a little less for their trips. In an email to drivers, the ride-sharing service announced it would be changing its pricing model from early next month.

In an effort to strike a "balance" between quality of service and "compelling earnings opportunities", Uber Australia said the update will kick in on August 7. But the move hasn't gone down well with the Transport Workers Union (TWU), who said drivers will cop the brunt of this during a cost-of-living crisis.

“Some of the most vulnerable and underpaid workers in our economy are once again facing cuts to their earnings in a market that’s in free fall," TWU national secretary Michael Kaine said.

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Are you an Uber driver who will be affected by this price change? Email stew.perrie@yahooinc.com

"Rideshare drivers with no rights to minimum wage or other entitlements have spent the night wondering how they’re going to pay the bills next month.

“This is a direct consequence of a decade of the Coalition Government rolling out the red carpet for gig exploitation disguised behind shiny new apps, without putting in place protections for workers.”

Uber didn't outline exactly how much fares would drop for consumers, however, there are reports it could be by about 5 per cent per trip.

“We will be changing the time and distance rates used to calculate rider fares,” the email to drivers said.

“The changes will include different time and distance rates based on geography, as well as the time of the trip.

“In most cases, the rates will be lower than those currently used. We anticipate that these changes will lead to an increase in rider demand and result in more trips for driver-partners.”

Yahoo Finance understands Uber Eats will not be impacted by the price change.

There could soon be some major relief coming for Uber drivers and riders in Australia.

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 passed through parliament earlier this year and it's expected to overhaul how gig economy workers are classified and, as a result, how they're paid.

It will enhance and produce new definitions as well as terms and conditions for "employee-like workers". The Fair Work Commission will be given better powers to establish minimum standards, like penalty rates, reimbursing employee expenses, and superannuation contributions, and there will be an introduction of consent-based collective agreements.

This will "provide a more level playing field for gig workers" and aims to give them "fair and equitable treatment" compared to other employment types.

During a discussion about the bill, Uber warned ride prices could jump by 60 per cent and 85 per cent for Uber Eats as a result of the legislation. The ride-sharing service also argued drivers could collectively lose up to 40 million hours a year.

Tony Burke, Employment and Workplace Relations Minister, agreed the Closing Loopholes legislation could hit customers, but said it was worth it to ensure gig economy workers were appropriately paid for their work.

"Underpaying people is cheaper. Slavery is probably cheaper too," he said in a speech to the National Press Club.

"There is some modest pass through here.

"We are talking about some of the lowest paid people in Australia and if that means there's a tiny bit extra you pay when your pizza arrives to your door and they're more likely to be safe on the roads getting there, then I reckon it's a pretty small price to pay."

The Fair Work Commission will be able to consider applications on gig economy workers' conditions from August 26.

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