Canada seeks to end Uber's tax advantage over taxi companies
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Re: Canada seeks to end Uber's tax advantage over taxi companies
#2Slowly the price advantage that Uber has by using loopholes fades away.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#3I like using Uber. But I also don't like the idea of money flowing out of the country/province/city into Silicon Valley. I'd much rather that the money earned by Uber stays within Canada in some form such as a tax or investment by them into our region.
Particularly because Uber-like apps are becoming important to public transportation infrastructure. Additionally, taxi revenue coming from tourism remains in the hands of Canadian taxi companies as opposed to Uber resulting in a net positive flow of money into the country.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#4Slowly the price advantage that Uber has by using loopholes fades away.
> Slowly the price advantage that Uber has by using loopholes fades away.
They don't even always have a price advantage anymore, especially if there's a surge. I needed a cab from Chicago Midway to my hotel last night, Uber's upfront price was $48 (and an eight minute wait), a regular taxi was $40 (including 15% tip) and no wait. I took the latter.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#5Slowly the price advantage that Uber has by using loopholes fades away.
> Slowly the price advantage that Uber has by using loopholes fades away. They don't even always have a price advantage anymore, especially if there's a surge. I needed a cab from Chicago Midway to my hotel last night, Uber's upfront price was $48 (and an eight minute wait), a regular taxi was $40 (including 15% tip) and no wait. I took the latter.
In my experience, whenever Uber is surging enough to make cabs cheaper (2.5x in my city), there are no cabs to be found. That or the cabs try to scam you by asking for extra cash off meter (happened to me on New Year's Eve).
Re: Canada seeks to end Uber's tax advantage over taxi companies
#6Using the small supplier exemption seems really doubtful to me. That pushes the tax collection liability on the driver (who can't collect taxes, since payment is through Uber app) and the limit for that is 30k$ so a lot of drivers should probably have charged taxes since they may have earned more.
In addition, my understanding (not a tax/law person) is that the 30k$ would be for the whole fare, not the driver's cut.
GST rate is 5%... But provincial sales tax could apply, at least in provinces where there is HST (Harmonized Sales Tax, administered by fed gov, divided with province.) HST varies from 13% to 15%. I wonder if we'll see provinces going after the drivers for back taxes. Revenue Quebec is notoriously aggressive in going after people for sales tax.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#7The fact that they weren't paying GST is mind-boggling. The purpose of the exemption is to let someone running a tiny hobby business sell their products without having to deal with tax headaches.
The purpose of the exemption was never to let a mega-corporation take the exemption of each employee, multiply it by the number of employees, and pretend that they don't need to pay tax.
What next? A grocery store taking the $30,000 exemption for each employee working for it? A law firm taking a $30,000 exemption for each legal aide working on a case?
Re: Canada seeks to end Uber's tax advantage over taxi companies
#8Slowly the price advantage that Uber has by using loopholes fades away.
Where I live, Uber charges less than half of what cab companies charge. But there are other ancillary benefits. Uber could be at parity with the cab companies but I would still prefer it because of:
1) Their app 2) The reliability of getting car with them vs. waiting for a cab. 3) Their vehicles are much, much, much nicer than cabs in my area. 4) The purchase experience.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#9Uber's response.
http://www.newswire.ca/news-releases/statement-from-uber-can...
One interesting note about the press release to the Canadian newswire service, it highlights that Uber was confounded by Canadian Garret Camp.
This is set to go live on July 1st so I guess you can watch the data from that point on to see if it has any effect.
> The budget statement estimates the change will raise C$3 million in new revenue in the 2017 budget year, rising to C$5 million in the next few years.
So this isn't really about raising money as $3 million is figuratively a rounding error.
Re: Canada seeks to end Uber's tax advantage over taxi companies
#10Using the small supplier exemption seems really doubtful to me. That pushes the tax collection liability on the driver (who can't collect taxes, since payment is through Uber app) and the limit for that is 30k$ so a lot of drivers should probably have charged taxes since they may have earned more. In addition, my understanding (not a tax/law person) is that the 30k$ would be for the whole fare, not the driver's cut.…
> That pushes the tax collection liability on the driver (who can't collect taxes, since payment is through Uber app) and the limit for that is 30k$ so a lot of drivers should probably have charged taxes since they may have earned more.
Sounds like Uber needs to update their app.
> I wonder if we'll see provinces going after the drivers for back taxes.
I'm sure Uber will do the responsible thing, stand by its drivers, and make them whole in the case that they are billed for back-taxes.