"While you've said that you love being your own boss, you've also told us there's much more to be done to improve the driving experience. We agree," the company said in an update to drivers.
"That's why we're pleased to share the ways the app is being improved to help you make the most of your time on the road."
After drivers have been waiting five minutes, they can choose to cancel the trip or continue to wait. A cancellation fee will only be charged after they have waited at least five minutes.
Other changes include a "no thanks" button, which allows drivers to immediately turn down requests rather than having to wait for the request to time out.
"You've told us choice is a huge reason that you drive using the Uber app, and you've always been free to choose the trips you want," Uber said.
"Waiting up to 20 seconds for a request to time-out can be annoying, so we've added the 'no thanks' button, so you can easily decline up to three trips in a row.
"When you receive a request, you'll now see a new 'No Thanks' button in the top left hand corner of your app. If you don't want to accept the trip, simply tap the button and the request will be passed to another driver-partner. If you don't confirm, or if you decline three trips in a row, the app will take you offline automatically. Still want to accept trips? You can get back online straight away, no worries."
Uber has also introduced long-trip notifications, so drivers can choose to decline a request if it will take more than 45 minutes. "That way, if you're planning to go offline soon, you can accept shorter trips that fit in with your plans," Uber said.
More than three million Australians use the Uber app. Users will be notified of the new waiting fees via push notifications when they book a ride over the next few weeks.
Sydney Uber driver Kate Doak welcomed the change. "Some of the time drivers can be waiting for five to 10 minutes, even after they've repeatedly tried to contact the rider, so I think if it makes the riders more aware that's probably a good thing," she said.
She added that there had been a number of recent changes to keep both sides honest, such as docking fares for drivers who take what "Uber decides to be the least optimal route".
"I think they're trying to make it so both drivers and riders have incentives to play by the rules," she said. "I think it's a good thing on both counts."