With 5% GST, Ola, Uber auto rides in Bengaluru to get costlier from January 1

Ride-hailing company Uber said extending the 5% Goods and Services Tax (GST) to auto-rickshaws will not benefit anyone

Auto-rickshaws booked by Ola, Uber or other ride-hailing apps will be costlier from January 1 after the Union government imposes five per cent GST.

While auto-rickshaws functioning outside of the hailing apps will not come under the GST ambit, the development comes just days after the Bengaluru transport authority hiked auto fares in the city by 15 to 20 per cent.

Peace Auto, an association of auto-rickshaws drivers, said 50 per cent of drivers get their daily rides through Ola and Uber.

“Earnings plummeted due to Covid-19 and now the government wants 5 per cent cut from our earnings. This is unfortunate. We urge the Union government to withdraw the tax,” Raghu N, a representative of the drivers, said in a video.

Ride-hailing company Uber said extending the five per cent Goods and Services Tax (GST) to auto-rickshaws will not benefit anyone. It urged the government to reconsider the tax since it will “end up hurting the earnings of auto drivers as well as the government’s digitisation agenda”. So far, the GST was applied only to taxis.

“Lakhs of auto drivers across India rely on Uber and other apps to earn a living,” an Uber spokesperson said, pointing out that women and elderly riders prefer booking a ride on the app for safety and convenience.

“But they also value affordability. This tax will lead to a rise in platform fares and corresponding drop in demand,” the spokesperson added.

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