Uber prices in the UAE are going up

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Uber says the changes are due to VAT.

VAT has arrived in the UAE, and while that means a 5 per cent tax on a number of goods and services, transport is one sector that is not affected by the charge.

However, ride-hailing app Uber has just announced a small hike in prices.

In an email sent to customers, Uber said while transport is exempt from the 5 per cent VAT, the tax does apply to the marketplace services provided by Uber through the app.

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“To reflect these changes, Uber prices will be increased slightly in the UAE. In the coming days, trip fares will increase by 1.7 per cent for all ride options, including uberX, UberSELECT, UberBLACK, UberXL, UberONE and UberVIP.”

In a longer blog post, Uber said the change in fare prices also allowed drivers to earn “a little more” to make up for the additional tax that affects their earnings.

Last year, local ride-hailing app Careem released a similar statement saying riders would only be taxed on the portion of the fare that was attributable to their marketplace services.

This would translate into an average fare increase of 1 per cent, Careem said.

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