DiDi Implements Fuel Surcharge in Australia Amid Middle East Conflict
Rideshare giant DiDi has become one of the first major companies, following airlines, to raise prices for Australian customers as a direct result of the US-Israel war on Iran. The company has introduced an extra 5c per kilometre surcharge, effective from Wednesday, to cover soaring petrol costs, with the full amount being passed on to drivers.
Impact on Delivery and Transport Companies
Other key players in the delivery and transport sector, including Uber, DoorDash, and Australia Post, are currently evaluating whether to implement similar charges. This move comes as small businesses across various industries, such as removalists and cleaners, are also hiking fees to manage increased operational expenses.
DiDi's Rationale for the Surcharge
Dan Jordan, DiDi Australia's head of external affairs, explained that the surcharge addresses the nearly 50c per litre rise in petrol prices since the conflict began, assuming a typical trip fuel economy of 10 litres per 100km. Notably, even trips in electric vehicles will be subject to this charge, despite drivers not incurring petrol costs. DiDi had previously introduced a 3c per kilometre fuel surcharge in 2022 when the fuel excise pause was lifted.
"We recognise the ongoing pressure that rising fuel prices are placing on our drivers across Australia, with higher costs at the pump directly affecting their ability to earn on the platform," Jordan stated.
Responses from Other Businesses
Uber has yet to announce a surcharge, leaving its drivers and Uber Eats delivery personnel to bear the brunt of higher fuel costs. An Uber spokesperson mentioned that the company is actively monitoring conditions and reviewing ways to support its partners. Similarly, DoorDash is expected to soon announce support measures for its drivers, with a spokesperson confirming they are "actively working through options."
Australia Post will release its fixed petrol surcharge for May in the coming days, which will affect online shoppers and e-commerce businesses. While April's surcharge was set at 4.8%, the lowest since May 2022, the oil and petrol price spike in 2022 had pushed it to 12%. The company declined to specify the new rate but assured customers they are keeping them updated.
Broader Economic and Regulatory Context
Major airlines, including Qantas, have already increased charges due to surging jet fuel costs, with Cathay Pacific doubling its surcharge to US$149.20 for flights booked in Australia. The Australian Competition and Consumer Commission is closely monitoring the aviation industry to prevent false or misleading statements about price hikes.
In response to inflationary pressures, the Reserve Bank of Australia raised interest rates on Tuesday, aiming to curb consumer spending and prevent businesses from embedding temporary petrol price rises into long-term costs. RBA governor Michele Bullock warned, "If we don't bring the excess demand down, then businesses are just going to build that into their costs, so it's going to be even worse for everyone."
Not all companies are passing on costs; Coles, for instance, has made no changes to its grocery delivery prices or fuel charges, operating on a "business-as-usual" basis. Woolworths declined to comment on potential price increases for its services, reporting no disruptions thus far.
