Uber's 3 to 49 percent service fee range explained

What it is

Uber rewrote its driver terms outside London in December 2025 for use from January 2026. The new terms reportedly make clear that drivers contract directly with passengers and Uber acts as an agent rather than the supplier of the ride. Alongside the contracting change, ADCU said on 21 December 2025 that the new terms introduced a variable service fee ranging from 3% to 49% of the fare. Drivers were told to accept the new terms by 5 January 2026 or lose platform access. Reports linked the rewrite to VAT and principal versus agent structuring after private hire VAT rule changes taking effect in January 2026.

How it applies to gig workers

For Uber drivers outside London in 2025-26, the service fee range is the number that hurts. A fixed commission is manageable because you can price your life around it. A fee that might be 3% on one job and 49% on the next is commercial chaos. ADCU said the range could push drivers below minimum wage once waiting time is counted, which is not dramatic language, it is a practical earnings problem. Take a 34 year old Uber driver outside London with £42,000 turnover and £8,000 expected expenses in the 2025-26 tax year, previously budgeting around a 20% to 25% platform cut. If some trips now lose close to half the fare to service fees, net earnings can collapse fast, especially once unpaid waiting time, petrol, insurance and vehicle rental hit.

The agency model change matters alongside the fee. If the driver contracts with the passenger and Uber is "only" an agent, Uber tries to shift VAT treatment and legal exposure. But the Supreme Court in Uber BV v Aslam [2021] UKSC 5 looked at the reality of the relationship, not the contract labels. A contract that says "agent" while Uber still sets fares, sets terms, controls allocation and disciplines through ratings does not automatically escape worker-status analysis. ADCU and GMB explicitly linked the new service fee structure to minimum wage risk, because if the fee variation drops the effective rate below £12.21 an hour (age 21+ NMW 2025-26) on working time, there is a claim.

The coercion aspect matters too. Being told "accept by 5 January 2026 or lose app access" is not genuine negotiation. It is a classic app-economy power move and is exactly the kind of fact that feeds into later tribunal claims about platform control. Drivers who accepted should save the old and new terms, screenshot the acceptance pop-up, and keep the email or in-app notification. Drivers who did not accept may have been blocked and should treat the block date as the trigger for their ACAS three-months-minus-one-day clock.

What you should do about it

• Save your December 2025 and January 2026 Uber emails and screenshot the new terms before the app refreshes.
• Check every weekly Uber statement for service fee percentages and calculate your effective hourly rate on working-time hours.
• If any week drops below £12.21 an hour for age 21+ on the Aslam working-time measure, start a NMW / holiday pay file.
• Send the new terms to ADCU, GMB or IWGB so unions have the wording, not just your memory of it.
• If you were blocked for not accepting, note the block date and contact ACAS within three months minus one day.

Last reviewed

19 April 2026

Internal links this page emits:

• Uber BV v Aslam
• worker status explained
• push back on the new Uber terms
• check your NMW shortfall
• ACAS Early Conciliation

Primary source used:

• C:\Users\thest\Documents\GigKiln\Research\Gap\G4.2-platform-tc-changes.md