Uber warns of 85pc price rise under Labor’s gig economy laws

“We can see that people are signing up en masse over the last six months.

“In spite of having a low unemployment rate, people are signing up to be Uber drivers in order to help with the family budget to make ends meet.”

Labor’s proposed gig worker laws will allow the Fair Work Commission to set minimum pay and conditions for “employee like” workers on digital platforms.

While the bill rules out overtime and rosters, Workplace Relations Minister Tony Burke has left much of the conditions up to the commission – with the safeguard that they not threaten the flexible engagement gig workers enjoy.

Uber’s modelling – which Mr Taylor said was “conservative” and assumed workers were only paid on engaged time – found prices for Uber rides during the day would increase by 55 per cent while those on public holidays would increase by 85 per cent.

The bigger hit, however, was for UberEats, where delivery prices would rise by 65 per cent for lunch periods and 60 per cent for dinner times. Prices would increase 85 per cent to 125 per cent on weekends and by 160 per cent during public holidays.

The company anticipates this would lead to a large decrease in orders and more than 50,000 restaurants and other businesses using UberEats could face a loss of $1.5 billion a year due to lower demand, it forecast.

In total, the price rises would result in the loss of 40 million to 65 million trips a year for rideshare and 60 to 75 million trips for UberEats.

Platforms may ‘turn off’ apps

Regional areas, which already had fewer transportation and delivery options, would suffer the most, with delivery prices in Wollongong, NSW, to more than double and rideshare prices for Shepparton, Victoria, to surge by 90 per cent.

According to Uber’s submission to the Senate inquiry into the bill, the modelling showed penalty rates “might result in platforms being forced to turn off the app at certain times of day or in specific geographies or dramatically increase prices”.

“A penalty rate term would not turn platform workers into employees, but it would destroy the true nature of the engagement, the flexibility of platform work,” it said.

Mr Burke has acknowledged that unions may seek extra pay for certain times of the day but suggested some apps’ surge pricing may already account for that.

”The reality is at particular times of day those rates already go up,” he told the National Press Club in August.

However, Mr Taylor said Uber’s modelling was based on average payments that included surge pricing. Surge pricing only applies to Uber and not UberEats.

He stressed Uber was encouraged by the progress made through Mr Burke’s consultation over the past year and that it was proposing “quite practical and constructive” reforms to ensure the intent and detail of the bill were aligned.

“Mr Burke talks about a ramp between contracting and employment and wants [employee-like workers] to be halfway between the two,” he said.

“But there’s a risk that we end up much, much closer to employment with a couple of the key clauses here.”

Uber will seek to limit requirements for FWC to consider comparable employees’ pay and conditions when setting minimum gig worker pay by ensuring such a consideration only applies to the award base rate.

It also wants minimum engagement periods, penalty rates, training and payment for “online time” – not just engaged time – explicitly excluded in the bill and for costs reimbursement to be limited to incremental costs incurred on the platform.

Mr Taylor said the bill’s reference to the FWC considering comparable awards meant “it’s going to be pulling in all sorts of factors that just aren’t relevant because of the unique nature of this work in the gig economy”.

“The Fair Work Commission, as it stands today, will actually have broader powers to set minimum standards for independent contractors for gig workers than it does for employees,” he said.

He argued penalty rates were “an archaic structure” about paying employees extra when their boss requires them to work outside of 9-5, Monday to Friday, but should not apply when workers are accepting trips “on their own volition”.

Uber’s dynamic surge pricing, which reflected demand, allowed workers to be paid more on days that were not public holidays, he said, such as during the recent NRL final on Sunday which was far more busy than the public holiday on the Monday.