Uber VAT and inflation ‘DOUBLE WHAMMY’ will make it tough for all operators to maintain profits
Updated: Apr 3, 2022
A well respected ride-hailing and mobility expert has welcomed the move to safeguard passengers as Uber become the principal agent, but has warned the ‘double whammy’ of inflation and VAT will make it tough to maintain profits at a difficult time.
Earlier this month Transport for London (TfL) warned ALL Private Hire (PH) Operators to take ‘IMMEDIATE ACTION’ to make changes to their terms and conditions and ensure compliance.
The warning follows a recent High Court judgment that ruled London PH Operators should contract directly with passengers in the interests of public safety. Operators must also ensure that passengers have appropriate legal recourse in the event that something goes wrong during a private hire journey.
Uber are the highest profile operator to make the the change ahead of their operator licence renewal date on 27 March 2022.
Other big operators in the capital, and across the UK, are yet to make a move to change their Terms and Conditions. The changes are likely to force PH Operators to pay VAT on all rides pushing up prices in process.
Juraj Atlas, mobility expert and Mileus Founder and CEO, said on social media: “So the time has come — Uber raises its prices in the UK by 20% to cover VAT charges resulting from high court ruling last December.
“But of course, Uber is not the only one impacted by this ruling. Many other PHV operators previously opted to operate their business and services based on the arrangement of being an agent between passengers and drivers.
“I do consider this ruling to be a move in the right direction —operators need to ensure public safety of their customers with stronger contracts, rather than just being a mediator or agent.
“However, this ruling comes in at a tough time. Inflationary pressures caused by supply chain issues and geopolitical issues impact everybody, with the taxi & PHV industry being no exception.
“This double whammy will make it tough to maintain reasonable profitable levels, let alone growing the business.”
