Are Uber prices about to skyrocket? Ride share drivers will now have to pay GST after a judge rules they are the same as TAXIS

  • Uber will now have to pay 10 per cent GST just like taxi operators
  • The ride sharing service lost its legal battle with the Australian Tax Office

By RACHEL EDDIE FOR DAILY MAIL AUSTRALIA and AUSTRALIAN ASSOCIATED PRESS

Published: | Updated:

Uber drivers will have to pay 10 per cent goods and services tax, just like taxis, after a long-running legal battle.

The ride sharing service lost its legal battle with the Australian Tax Office in the NSW Federal Court on Friday.

Uber had challenged an ATO ruling that its drivers were legally classified as providing taxi travel and therefore needed an ABN and be registered to pay GST.

Uber drivers will have to pay 10 per cent GST, just like taxi operators, after a long-running legal battle (stock image of Uber mobile phone app)

Uber drivers will have to pay 10 per cent GST, just like taxi operators, after a long-running legal battle (stock image of Uber mobile phone app)

But Federal Court Justice John Griffiths ruled that a 2015 Uber trip at the centre of the case did constitute 'supply 'taxi travel' within the meaning of (the GST Act)'.

That means Uber drivers must pay 10 per cent GST on their earnings.

'Broadly construed, and having regard to other relevant matters of construction, I consider that the word 'taxi' is sufficiently broad in its ordinary meaning to encompass the uberX service supplied,' Justice Griffiths said in his judgment.

The court found the case study, Uber driver Brian Fine, would count as a taxi driver.

But Justice Griffiths rejected the ATO's argument that the UberX service was also a limousine service - but mostly because Mr Fine drove a Honda Civic. 

Justice Griffiths left open the possibility that other UberX drivers could be considered to offer limousine services, depending on the type of vehicle they drive. 

In a statement supplied to Daily Mail Australia, Uber said:  'We are disappointed in the Federal Court's decision today. We are now reviewing the decision and will provide our driver-partners with more information as soon as we can.'   

'Broadly construed, and having regard to other relevant matters of construction, I consider that the word "taxi" is sufficiently broad in its ordinary meaning to encompass the uberX service supplied,' Justice Griffiths said (stock image)

'Broadly construed, and having regard to other relevant matters of construction, I consider that the word 'taxi' is sufficiently broad in its ordinary meaning to encompass the uberX service supplied,' Justice Griffiths said (stock image)

In a statement, Australian Taxi Industry Association CEO Blair Davies said taxi drivers and ride-sourcing drivers are effectively in the same business.

'UberX drivers cannot expect to be treated as though they operate in a tax free zone. They should pay tax just like their taxi driver counterparts,' Mr Davies said.

'There is nothing unfair about it. The ATO hasn't singled out ride-sourcing drivers for extra or harsher treatment, it's actually treating them exactly the same as everyone else who provides the same sort of personalised transport service.'  

The ride sharing service lost its legal battle with the Australian Tax Office in the NSW Federal Court on Friday (Uber stock pictured)

The ride sharing service lost its legal battle with the Australian Tax Office in the NSW Federal Court on Friday (Uber stock pictured)

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