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Canada seeks to end Uber's tax advantage over taxi companies

reuters.com

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Re: Canada seeks to end Uber's tax advantage over taxi companies

#121

Post by Broken_Hippo »

jmcdiesel wrote: post #68
chx wrote: post #61

Earlier quoted context omitted.

> Driving someone around shouldn't be so complicated. Personal safety gets involved, big time, when driving someone around.

Does the safety somehow diminish when you pay for the ride? If I give you a ride to work, for free --- then give you a ride to work, but you pay me, what is the functional difference requiring more regulation on the second part? Is your safety affected any different? Aside from the basic protections built in to any business when it comes to collecting money, etc, what extra rules need to be in place. From a purely pr…

If I give you a ride to work, for free --- then give you a ride to work, but you pay me, what is the functional difference requiring more regulation on the second part? Is your safety affected any different? Aside from the basic protections built in to any business when it comes to collecting money, etc, what extra rules need to be in place.

In the first instance, both parties can refuse, and can drive in any way they want. One-off rides (or paying for part of the gas in a carpool) aren't much of a worry. This is basically as safe as driving yourself somewhere. Of course, they could be a really bad driver with minimal insurance, so hopefully nothing bad happens. In addition, in these situations, you are usually on a friendly basis with the person - minimally a coworker.

Your safety is different when you start to ride with someone that does it for a living. You don't know the person, so you are trusting they know what they are doing and can drive in a way that is safe for you. The more folks drive, the more likely they are to be in an accident (this is why insurance increases with your commute). Minimally, they need to know how to combat this. I'd prefer them to have a more comprehensive driving test, including things like passenger safety and minimal regulations on driving record/background check. Unlike your friend, I'm pretty sure a taxi service has to have adequate insurance in case of an accident. Many places also have policies about pricing because of shady pricing policies in the past.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#122

Post by pesfandiar »

OldSchoolJohnny wrote: post #116
rpeden wrote: post #14

Earlier quoted context omitted.

Does that mean you're interested? If so, let's get some people together, organize an in-person or virtual meetup, and get the ball rolling.

Jesus are you serious? There are probably 500 separate taxi apps already in Canada.

Why not if they have promotions or otherwise cheap fares? I'd love VC-subsidized cab rides.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#123

Post by frgtpsswrdlame »

narrowrail wrote: post #111
frgtpsswrdlame wrote: post #92

Earlier quoted context omitted.

Imo the contractor designation should be limited to people who have pricing power for their work. Uber drivers have none.

I think that's a somewhat fair comment, and a t0pic worthy of discussion. According to wikipedia[0], In economics and particularly in industrial organization, market power is the ability of a firm to profitably raise the market price of a good or service over marginal cost. In perfectly competitive markets, market participants have no market power. I'm pretty sure I don't have the exact facts on what Uber's operating…

The important part is this: market power is the ability of a firm to profitably raise the market price of a good or service over marginal cost

The driver does not raise the price, Uber does. Uber has the market power here.

>I'm pretty sure I don't have the exact facts on what Uber's operating agreement with drivers is, but I always thought a given driver could choose to only drive during surge pricing, no?

Perhaps, I should have been more direct. A contractor should be able to set and negotiate rates. If they can't do that I think they're an employee. For example, if I need to hire a general contractor for a construction job I can shop around, compare rates, pick the best one AND haggle with them if need be. If I need to hire an Uber, I have no "haggle-power" OR ability to shop around because Uber sets the rate. None of the contractors are competing against each other because Uber controls the marketplace and this is where I think the contractor designation breaks down. If you tightly control the market, the people in it are employees, if the market is more free, the people in it are probably contractors.

>I am of the belief that Uber presents a unique opportunity to rethink the whole structure of unions in the US, and maybe a total rethink about how to organize labor. I would have interest in building a commercial platform to help labor organize and coordinate themselves better (that they own) in the modern world. I think it would look like a gated digital community with microblogging, discussion, and voting functions.

This sounds interesting but personally I'm of the mind that poor labor organization is a political problem. How would your app help workers beyond just a place to communicate?

Re: Canada seeks to end Uber's tax advantage over taxi companies

#124

Post by rodgerd »

jmcdiesel wrote: post #52

All of this Uber/Lyft stuff has me wondering... Instead of making it harder to be an Uber/Lyft to match Taxis, why not make it easier to be a taxi? Driving someone around shouldn't be so complicated. Regulation, when necessary, is good... but most of what I see around taxi regulation is just money gouging on the part of the state.

You cannot make it "easier enough" to satisfy Uber. New Zealand requires only that you have a P endorsement to your license to be a commercial driver. That requires a police background check and a medical certificate. Uber refuses to comply with that minimum requirement.

The NZTA are prosecuting because it turns out that, surprise surprise, Uber are hiring drivers with serious criminal records or who are medically unsafe to drive.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#125

Post by recurrie »

stormbrew wrote: post #34
vkou wrote: post #21

Earlier quoted context omitted.

The Canadian Revenue Agency seems to think that I should not do that. They also seem to think that traditional taxi companies are also not eligible for this exemption.

Source on the CRA not allowing cabbies to be contractors? Because as far as I know they almost universally are. Either to the owner of the cab they drive or to the dispatcher.

It's not that CRA doesn't cabbies to be contractors, its that they require all taxi drivers to register for and collect GST/HST- taxi industry does not qualify for the sub-$30K exemption. The reason for this was that otherwise, there were fears from full-time drivers that part-time drivers, making under $30K/year, would be favoured by customers over full-time drivers.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/txlmsn/menu-e...

Re: Canada seeks to end Uber's tax advantage over taxi companies

#126

Post by aianus »

ghostly_s wrote: post #79
tn13 wrote: post #65

What I would have preferred is that Canada removing the burden off the taxi companies and let them give competition to Uber in innovation space instead of trying to bribe politicians to act as gatekeepers.

Would you like to point to any precedents for 'unburdened' cab markets which have resulted in better service?

Have you ever been to Bangkok? I can just pay $1, hop on the back of a moto idling outside the skytrain station, and off we go lanesplitting through traffic straight to my office 2km away.

It's amazing and would be so illegal on so many levels in Canada (where I spend $1000/mo on transportation).

Re: Canada seeks to end Uber's tax advantage over taxi companies

#127

Post by LammyL »

vkou wrote: post #21
thrill wrote: post #20

Earlier quoted context omitted.

Should you not be able to?

The Canadian Revenue Agency seems to think that I should not do that. They also seem to think that traditional taxi companies are also not eligible for this exemption.

That is right. The law in Canada explicitly excludes taxis from the $30k exemption, and taxis must collect gst/hst on all rides, regardless of how much the taxi's sales were in a year. Uber was exploiting this rule by saying their services weren't 'taxis', and each driver was independent, and therefor that rule didn't apply to them. It's a sneaky way to charge most people 5-15% less than their taxi competition.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#128

Post by LammyL »

briandear wrote: post #57

Why not just cut GST for everybody? Instead of taxing Uber more, tax taxis less. Drivers and Uber still pay income taxes, fuel taxes, relevant tolls right? If they want to simplify taxes -- as they claim, the best way to simplify is simply to eliminate. Lower fares mean more revenue for drivers and Uber and thus more income taxes collected. Removing taxes from goods, means lower prices which means you sell more and t…

Companies that collect GST also get back from the government any GST they spend. So effectively they don't have to pay for GST/HST on fuel, maintenance, even a new car. Companies that don't collect GST/HST (people with sales under $30k, exempt service providers like doctors, etc...) cannot claim any input tax credit and have to pay it just like regular individuals.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#129

Post by LammyL »

run4yourlives2 wrote: post #78
problems wrote: post #45

Earlier quoted context omitted.

Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers - will they only have to pay taxes on their cut?

The consumer pays Uber. That is the point of sale. That is where the sales tax is collected. This isn't rocket science. To your - bad - analogy: If MS was selling templates created in word by you to a marketplace, you can bet that GST would be paid on them by the consumer to MS.

Yup. And if you, the template provider, had a GST number (you are a business or have sales over $30k), you would also be charging Microsoft the GST for the sale. It is not a problem for MS since they would just claim it back as an input tax credit and it would be net zero for them.

Consumer pays GST to MS. MS pays GST to a GST collecting template provider. MS and template provider both pay GST to government, but MS gets an input tax credit for GST paid to template provider so that government doesn't double dip.

This is what uber should be doing with their drivers but they prefer to have prices 5-15% lower than their competition by applying their own legal interpretation to Canada's tax laws.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#130

Post by cstejerean »

frgtpsswrdlame wrote: post #123
narrowrail wrote: post #111

Earlier quoted context omitted.

I think that's a somewhat fair comment, and a t0pic worthy of discussion. According to wikipedia[0], In economics and particularly in industrial organization, market power is the ability of a firm to profitably raise the market price of a good or service over marginal cost. In perfectly competitive markets, market participants have no market power. I'm pretty sure I don't have the exact facts on what Uber's operating…

The important part is this: market power is the ability of a firm to profitably raise the market price of a good or service over marginal cost The driver does not raise the price, Uber does. Uber has the market power here. >I'm pretty sure I don't have the exact facts on what Uber's operating agreement with drivers is, but I always thought a given driver could choose to only drive during surge pricing, no? Perhaps, I…

If they were employees then Uber would also get to set their hours and they wouldn't have the option to decline any fares. They also couldn't use any other services concurrently (many drive for both Uber and Lyft at the same time).

Uber also doesn't control the market. There is also Lyft and any other competitor is welcome to start and offer better rates for the driver. Or even offer variable pricing where every driver can set their own rates and consumers can pick the lowest bidder. Drivers have the power to switch providers or use multiple simultaneously.

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