Taxi hire app Uber is raising its fares tonight as it is forced to charge VAT on rides.
Uber did not charge VAT until a court case last December ruled that the taxi app, and its rivals, had a "contractual obligation" to provide journeys in London.
As a result, customers taking an Uber ride enter a sort of contract with Uber, not the driver, from 11.59pm this evening.
VAT is 20%, but The Mirror understands fares will not rise by the full amount and that increases will vary by area.
Although the ruling technically only applies to London, Uber will be making the changes around the country.
An Uber spokesperson said: “We have completed the changes to our business model as required by law.
"Other operators in London are also required to make changes to their models to comply with the relevant law.
"Uber operates in an intensely competitive market and we are committed to always offering consumers affordable prices. As always, riders will get a trip price before booking their journey.”
Last November Uber hiked its prices by 10% to try to get more drivers signed up.
The price rise will affect London, and peak time fares for Gatwick, Heathrow , Luton and Stansted airports could go up by 25%, Uber drivers were told.
The minimum fare went up from 50p to £5.50.
Uber last raised its prices in 2017.
A shortage of Uber drivers meant an increase in 'surge pricing'.
During very busy periods Uber can raise its normal tariffs by 1.8x.
The lack of Uber operators also means an increase in cancelled trips and overall longer wait times for taxis.
Part of the problem is also that taxi drivers are increasingly on several different apps, not just Uber.
Uber is currently among the cheapest cab app for customers, meaning drivers have an incentive to cancel Uber bookings if they get a better offer from a fare on another app.
Uber takes a cut of 25% of fares, which it raised from 20% after a court ruled it should treat its 70,000 drivers as employees .
This meant paying them workplace benefits like the minimum wage and holiday pay.
