Uber passengers in well-off Sydney suburbs will be disproportionately slugged by higher fares from the ride-sharing giant after it raised prices in response to surging petrol costs for its drivers.
The $218 billion company has refused to say publicly how its price increases, which came into effect on Monday, will work, but emails seen by this masthead show it telling drivers they will go up by more in suburbs such as Redfern, Coogee and Manly.
Drivers had been furious that their income was stagnant while petrol costs spiralled towards an average $2.50 per litre for unleaded, prompting the company to announce the changes last week.
Uber on Friday did not outline how much its customers’ fares would go up, instead saying it was overhauling its fee structure so it could pay its drivers more, amounting to an earnings increase of 6 per cent on average nationwide.
Unlike its rival Didi, which announced a temporary 5¢ per kilometre fuel levy last week, which is passed onto drivers in its entirety, Uber has said its fare increase would be permanent and that it is in response to a broad range of increased costs beyond just rising fuel prices due to the war in the Middle East hampering crude oil movement through the Strait of Hormuz.
However, this masthead can reveal the company’s new pricing strategy treats riders between Australian cities, and within different parts of those cities, differently, breaking with its long-term pricing model based broadly on a trip’s distance, time and surges in an area.
“We know the cost of driving has increased and understand the pressure many of you have been under, particularly in recent weeks. This change is part of a broader shift designed to help improve earnings,” Uber wrote to drivers on Friday, in emails seen by this masthead.
“Earn more in certain areas across Sydney,” Uber told drivers. “Fares are increasing across Sydney, with higher earnings on trips that start in [a range of areas].”
It did not respond to questions about whether customers’ fares would increase by more than the 6 per cent it is passing on to drivers on average, nor if its new national fare regime – the first since 2023 – boosted the company’s bottom line as well as drivers’ pay.
In Sydney, customer fares have risen by an average of 5 per cent for Uber X, XL, Comfort, Electric Assist and Pet services, according to the Uber emails.
Drivers will receive higher earnings for trips that begin in Sydney’s north, with suburbs such as Mosman, Manly, Northbridge, Chatswood, Killara, Forestville, Pymble, Wahroonga and Hornsby given as examples.
Passengers in the eastern suburbs will also cop the higher fares, such as for trips started in Rose Bay, Bellevue Hill, Bondi, Kensington, Kingsford, Coogee and Maroubra.
Trips beginning in the Sydney CBD and inner south, including Glebe, Redfern, Marrickville, Newtown and Eastlakes will also be especially expensive.
In Melbourne, customer fares have increased by 6 per cent across the same range of Uber ride types.
Minimum fares will also be increased, to $11 in Sydney and $11.50 in Melbourne.
Across the country, peak periods that pay drivers higher fares – such as weekends, morning commute hours and late nights on weekdays – will also be expanded, to encourage Uber’s driver-partners – who are not employees and therefore cannot be ordered to work at the busiest times – to clock on at those times.
Shorter trips will also attract higher fares across the board. This follows years of complaints from customers that drivers would reject short trips in the hope of the algorithm assigning them longer distance trips, and thus higher fares under Uber’s previous pricing structure.
There will be no price decrease for any fares as part of Uber’s pricing change.
Uber did not respond to questions about the specifics of its new pricing structure, instead pointing to the comments it made when announcing the broad increase on Friday.
“We regularly review our fares to ensure we’re striking the right balance between supporting strong earning opportunities for driver partners while continuing to offer reliable, affordable options for riders,” an Uber spokesperson said.
“These changes build on work already under way and reflect our ongoing commitment to better supporting driver earnings over time. We know operating costs, including fuel, remain front of mind for many driver partners, making continued support more important than ever,” the spokesperson said.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.