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Uber Warns Of Steep Price Increases And Reduced Services If New Gig Economy Laws Pass

Uber has issued a stern warning that it may have to significantly increase the average prices for rideshare and food delivery services if the Australian parliament approves new laws that establish a minimum pay standard for gig economy workers. 

This popular digital app may increase the rideshare by up to 85 per cent, leading to 140 fewer trips for drivers and potential app shutdowns in regional areas.

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The proposed legislation, referred to as the Closing Loopholes Bill, has prompted Uber to take action to narrow the scope of the bill. 

Uber is calling on the Senate to exclude penalty rates as a minimum condition for gig workers and to limit references to award standards. 

The company argues that these measures would prevent the entrenchment of “outdated” comparisons to traditional employment.

Uber’s General Manager for Australia and New Zealand, Dom Taylor, told The Australian Financial Review that the penalty rates were “archaic” and not suitable for platform work.

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“There will invariably be people that stop working but there will also be people that will go from 15 hours to 10 hours, from 35 to 25, etc and ultimately this is money that we know Aussies need,” Mr Taylor said.

Uber’s internal modelling based on paying casual award rates, penalty rates for weekends, nights, and public holidays, reimbursement of expenses, and superannuation revealed that the company might need to raise prices by 60 percent for rideshare and 85 percent for food delivery. 

This would result in 40 million hours of lost work due to lower demand.

“We can see that people are signing up en masse over the last six months,” Mr Taylor said.

“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.”

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