Uber drivers say looming cuts to fares will squeeze them even more in a cost-of-living crisis, arguing the ride-hailing giant is reducing what they are paid before new standards under the government’s closing loopholes legislation are determined.
Last week, Uber told drivers that rider fares would be cut from 7 August. The company has not told drivers the exact amount, but it is understood it would be an average of less than 5%.
Uber said the adjustments were because of the current economic environment and local market conditions – not a reaction to minimum standards that would likely be set on driver conditions by the Fair Work Commission under the closing loopholes legislation, which takes effect on 26 August.
From that date, applications can be made to Fair Work to set enforceable standards for gig economy workers in transport.
While Uber has supported the legislation, drivers say the fare cut is a clear response to prepare for changes likely to come from Fair Work.
Shane Millsom, a Brisbane-based driver and the secretary of the driver advocate organisation Rideshare Driver Network, called the Uber announcement disappointing but not unexpected.
“The new closing loopholes legislation comes into effect shortly, so Uber has deliberately lowered the starting point for negotiations,” he told Guardian Australia.
The Perth-based driver Ben agreed: “If it’s not related to closing loopholes, why could they not delay the change for another month in order to consult properly with drivers and [the Transport Workers’ Union] that represents drivers?”
Tracey, a Sydney-based driver who organised a Telegram group of more than 300 drivers in Sydney who were considering synchronised boycotts of Uber because of the changes, said it was an attempt by Uber to set a minimum starting point for rates before Fair Work assesses minimum standards that will likely increase.
“I think they’re just going to bring the rates back to what they are now. They [will] look like they’re doing the right thing,” Tracey told Guardian Australia.
Millsom said drivers were facing cost-of-living pressures including petrol prices, insurance, registration and car costs.
“Drivers will be now be doing more work for less money, and at a time when we’re in a cost-of-living crisis and the cost of everything related to driving in particular is going through the roof,” he said.
“They are simply asking drivers to do more work for less money so they can make more profit.”
An Uber spokesperson said the company reviewed its pricing “on an ongoing basis” and it had told drivers the plans to adjust rider fares across Australia from 7 August.
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“As ever, our aim is to continue providing quality, safe and affordable rides for Aussie passengers while creating compelling earnings opportunities for drivers.”
Uber argued the reduced fares would lead to customers taking more rides, and drivers being able to make more money. But drivers said Uber had promised that before when rates had been cut, and it did not eventuate. Millsom said fare cuts were not sustainable for longer-term drivers, but the company was relying on driver turnover.
“Part of the Uber model is that drivers do come on board, sign up, spend the money, get going, and then after several months quit because it isn’t sustainable, because you can’t make enough money to be able to live. You can’t even make minimum wage after costs,” he said. “So they rely on drivers regularly coming in, starting the job and then leaving.”
The national secretary of the TWU, Michael Kaine, said standards were continuing to spiral until the new legislation comes into effect next month and industry needed to work quickly for the new minimum standards to be determined.
“The longer it takes for a minimum standards order to be determined, the lower pay and conditions will sink,” he said in a statement. “Stopping the freefall with a safety net of binding standards that can be built up over time is critically urgent for gig workers and companies alike.”
The workplace relations minister, Tony Burke, did not address Uber’s fare cut plans, but said the days of there being no minimum standards for ride-hail drivers were nearly at an end.
“We should be able to have 21st century technology without 19th century working conditions. Australia should never be a country where workers have to rely on tips to make ends meet.”
The changes will be a double blow for longer-term drivers. Uber has announced drivers who had been with the company for longer – and Uber took a grandfathered cut of 22% rather than the 27.5% standard – would be bumped up to the higher cut from 1 September. Uber said it affected less than 10% of drivers in Australia.