Uber and Ola drivers associated with both companies cab-leasing programmes will see a hike in the amount of tax paid on leasing under the new GST regime. Tax rates are expected to go up from 14.5 per cent to a range between 29 per cent and 43 per cent, according to company officials at Ola and Uber, besides analysts tracking the space.
The drivers will have to pay an additional fee of approximately Rs 1 lakh annually, with their monthly EMIs going up significantly.
Employees associated with the driver experience teams indicate challenges dealing with a further backlash from the drivers in the coming month who have already been protesting against their falling incomes as these companies cut back incentives.
“At Ola Fleet Technologies, we run a leasing programme for tens of thousands of driver-partners who may not be able to afford buying a car of their own. Presently, these driver-partners pay 14.5 per cent VAT. In the proposed GST regime, they will have to bear GST rates of 29 per cent to 43 per cent on the cars already leased, as an outcome of double taxation on existing leases,” said Shalabh Seth, CEO of Ola Fleet Technologies, a wholly-owned subsidiary of Ola.