The cost of Uber and taxi trips could soon jump as the ride-share giant and state governments face lobbying from drivers seeking to be compensated for the sharp rise in petrol prices resulting from war in the Middle East.
Motorists in NSW and Victoria were facing average bowser prices of about $2.25 a litre for unleaded petrol and $2.65 a litre for diesel on Tuesday, with many individual service stations charging significantly more, as the industry continued to suffer from the effective shuttering of the Strait of Hormuz, through which 20 per cent of the world’s crude oil supply travels.
Brent Crude was trading at roughly $US103 per barrel on Tuesday as prices remained volatile and stubbornly above those from before the outbreak of war between the United States, Israel and Iran at the end of February.
Costs for trips charged by ride-share platforms such as Uber and meter rates calculated by taxis have remained the same as before the oil crisis.
Uber, which compensates its partner drivers at a rate based on various factors including the cost of petrol, is mulling increasing the rates for drivers and potential fare increases for customers, this masthead understands.
The considerations follow a barrage of complaints from driver partners over surging fuel costs in Australia in recent days.
The Transport Workers Union (TWU) is also asking the Fair Work Commission (FWC) to force gig economy employers and a range of transport businesses to pay their clients, which could include Uber drivers, for the uptick in fuel costs they suddenly face.
“We recognise recent fuel price increases are having an effect across a wide range of industries, including for driver partners and delivery people who use the Uber and Uber Eats app to earn,” an Uber spokesperson said. “Uber is actively monitoring conditions as they evolve and regularly reviews ways to support driver partners and delivery people as circumstances change,” the spokesperson said.
For Jacob Abboud, who has driven for Uber, its rival Didi as well as his own private business Northside Transfers in Melbourne’s north, surging petrol prices are hitting already slim profit margins.
Before the outbreak of the war, Abboud would spend about $200 a week on premium unleaded for his Nissan X-Trail hybrid medium SUV, which he drives customers in five days a week. He has since been forced to downgrade to standard unleaded, yet finds his total petrol bill now exceeds $300 a week. Despite this, his earnings remain unchanged.
“I look at the prices now, they’re crazy, and we’ve heard nothing from Uber,” Abboud said. “These companies are making billions of dollars and they’ve just been silent as our income has dropped.”
Abboud has noticed roads have become quieter around Melbourne, believing motorists are turning to public transport and other options to avoid filling up their own cars. However, he laments there is no way for he and other rideshare drivers to move to alternatives in the short term.
Because of Uber’s dominance in the rideshare sector, Abboud is yet to adjust rates for his private business, fearful it will render him uncompetitive. He believes customers would accept a small increase in fares if it meant paying drivers fairly, and notes while it might be less than a dollar for most individual trips, it would add up and make a significant difference for drivers.
“We’re Aussie battlers here. I’m struggling here – I’ve got to pay our mortgage – while Uber, an American multinational, keeps its earnings the same.”
“Drivers are stuck between a rock and a hard place. We’ll take the hit, but it’s fair Uber can take a hit too,” Abboud said.
Michael Kaine, national secretary of the TWU, said gig economy drivers had been hit hard by rising fuel prices, pressuring many to work longer hours and take risks on the road to ensure their incomes weren’t diminished.
“Behind the apps, workers are under deadly pressure – many are already on less than minimum wage after costs, and there’s no buffer for them to fall back on,” Kaine said.
Uber rival Didi did not respond to request for comment.
Meanwhile, taxi fares remain stagnant as drivers fork out more for fuel, but fares for pre-booked trips can be determined by operators.
Meter fare rates are set by state departments in NSW and Victoria, with neither state yet to introduce measures to respond to petrol price spikes.
Nick Abrahim, NSW Taxi Council CEO, said he raised a request to urgently bring forward the annual reassessment of meter rates, which are adjusted annually for inflation, with the state’s transport department secretary Josh Murray at an industry roundtable on Monday.
“We can’t just increase fares or add a fuel surcharge, we rely on the government,” Abrahim said.
“We’re not asking for exorbitant fares – we care about customers. We just want a modest adjustment to give operators relief from these petrol prices,” Abrahim said.
Stephen Armstrong, president of the Victorian Taxi Association, said meter prices in the state were set to be reviewed in September. While cautious now, he said if bowser prices don’t return to previous levels soon, “we’ll be under pressure from operators wanting us to push the government for the fares to go up”.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.
