Industrial relations: Uber warns of price hikes up to 85pc due to workplace law changes

Average prices for Uber’s rideshare and delivery services could rise by up to 85 per cent as a result of the Albanese government’s proposed shake-up to workplace rules, the company has claimed.

As the Senate mulls proposed legislation that will enable the Fair Work Commission to set minimum standards and conditions for on-demand platform workers, fresh modelling released by Uber cautioned that consumers can expect to pay significant price hikes if the reforms pass parliament.

In August, the government unveiled proposed changes that would empower the Fair Work Commission to set minimum rates of pay and standard conditions for workers on digital platforms across sectors including food delivery, ride sharing and in-demand care.

Currently, “gig” workers on digital platforms are often engaged as contractors, rather than direct employees, meaning they are not entitled to conditions such as minimum hourly wages or sick days.

But according to Uber’s analysis, the extension of terms and conditions in relevant awards, including casual loading, penalty rates, expense reimbursement and superannuation entitlements, to gig workers on its platform would increase average rideshare and food delivery prices by 60 per cent and 85 per cent respectively.

Uber rides during the day would increase by 55 per cent, while on public holidays costs would jump by 85 per cent, it claimed. For food delivery, ordering UberEats on weekends would soar by up to 125 per cent, and climb by 160 per cent on public holidays.

As a result of higher prices, consumers are expected to take up to 65 million fewer Uber trips a year and order 75 million less orders on UberEats, the modelling shows.

Consequently, more than 50,000 restaurants and other businesses on the platform could expect to face a combined loss of $1.5bn a year while more than 40 million hours of work would be lost by drivers and riders, Uber said.

Uber’s submission argues that regional areas serviced by Uber, which already have fewer rideshare and delivery options, would suffer the most under the government’s plan. Delivery fees in Wollongong would more than double, while ridesharing costs in Shepparton would soar by 90 per cent, it claims.

Outlining the legislation at the National Press Club earlier this year, Workplace Relations Minister Tony Burke said while there would be a “modest pass-through” in the form of increased prices, consumers would only have to pay a “tiny bit extra” as a result of the changes.

Responding to the modelling on Monday, Mr Burke pointed to the current Senate inquiry which was scrutinising the legislation, and said the complete absence of minimum standards and conditions must stop.

“The important thing for the government is we no longer have a situation where Uber drivers have no minimum standards at all,” he said.

Coinciding with the release of the new modelling, Uber also launched a push to exclude penalty rates from the minimum standards the workplace umpire can apply, arguing that their inclusion could result in platforms being forced to turn off the app at certain times of day or in specific areas or dramatically increase its fees.

Additionally, Uber argued that the legislation should limit references to award standards to avoid “entrenching outdated” comparisons between platform work and traditional employment.

In a statement, Uber said that while it supported the establishment of minimum standards, it was vital that flexibility was retained under the proposed changes.

“Hundreds of thousands of Australians make the choice to earn with platforms like Uber every month, and our aim throughout this reform process has been to preserve the flexibility of gig work while introducing additional protections for platform workers,” an Uber spokesman said.

The changes to regulate the gig economy form part of a second tranche of workplace changes which also include cracking down on labour hire, making it easier for casual workers to convert to permanent roles, and increasing penalties for wage underpayments.

After being scrutinised by a Senate committee, the industrial relations legislation is expected to return to the Senate in February next year.

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