When the GST was introduced in 2000, businesses were warned by the ACCC that they could not simply increase their prices by 10% to cover the new tax. Instead, they were supposed to identify the savings from the New Tax System and adjust their prices accordingly, and then - where required - add GST to the revised prices.
Most of the costs faced by UberX drivers are subject to GST: a suitable vehicle, fuel, servicing, insurance, mobile phone, and so on. Since they will have to register as businesses in order to collect the GST as required by the ATO, they will also be able to recoup the GST element of those expenses, or at least part of them if those purchases are also used privately.
Whacking on 10% GST without adjusting prices to reflect reduced costs was called profiteering in 2000, so why is that not the case in 2015?
Uber general manager for Australia David Rohrsheim reportedly told customers "This is not a tax on Uber, but rather an additional tax on the thousands of everyday Australians who earn a flexible income by sharing rides on the Uber platform."
That is wrong on two counts.
Firstly, GST is not a tax on businesses that supply goods or services - it is a tax on their customers.
Secondly, Uber does not do ride sharing. If it did, its drivers would use the platform to notify potential passengers that they would be travelling between two identified locations at a certain time in case anyone wanted to be picked up along the way. But that's not how it works: passengers say where they want to go and drivers go out of their way to take them - just like traditional taxis and hire cars.