Careem, Uber increase fares in UAE after VAT roll out

Dubai - Passengers will have to pay 1-1.7% extra on their total fare.

Ride-hailing cab services are going to cost more in the new year following the implementation of 5 per cent value-added tax (VAT) in the country, Uber and Careem, two of the most popular apps used by commuters in the UAE, have announced.

"Uber trip fares will increase slightly for all ride options, including uberX, UberSELECT, UberBLACK, UberXL, UberONE and UberVIP in the rides app," Uber said.

"While transportation is exempt from the 5 per cent VAT, the tax does apply to the marketplace services provided by Uber through the app, which is equivalent to 1.7 per cent of the total trip fare," the statement added.

Simply put, this means if a ride earlier cost Dh100, it will now cost Dh100 + 1.7 per cent, or Dh101.7.

"Your ride with Careem will be taxed only on the portion of the fare that is attributable to our marketplace service. This will translate into an average fare increase of 1 per cent," a statement from Careem said.

• Dubai