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Uber Hit with $650M Employment Tax Bill in New Jersey

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Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#211

Post by rayiner »

xenocyon wrote: post #109
Shivetya wrote: post #40

I am really curious how they arrived at any of the numbers in this article. Seriously, what other large employers make it to hundred plus million per year? Are they just up and deciding that anyone who did one trip is now an employee? Is there a source that shows how much each company pays per year in this state? who else is equivalent? this isn't about protecting the drivers, this is about protecting the taxi indust…

You make reference to protecting mass transit as well as to the cost to consumers. These arguments make sense if there are zero externalities, but unfortunately there are: carbon footprint, both directly as well as second order effects from increased congestion, commercial exploitation of subsidized infrastructure, increased collision risk to cyclists and vulnerable road users, abuse of contract law by preventing ind…

Mass transit in most places doesn’t come out ahead even accounting for externalities. The average passenger vehicle emits 0.91 pounds of CO2 per mile. Many estimates of CO2 price it at $30/ton. At that rate, the CO2 externality from driving is 1.4 cents per mile. The cost of CO2 recapture puts a cap on the cost of CO2, and currently it’s $100-$230 per ton. At that price, we are looking at $0.10 per mile.

Typical subsidies for transit are in the $0.50+ per passenger mile range for rail, and $0.80 for bus: https://opportunityurbanism.org/2019/09/transport-costs-and-... (scroll down to the graph).

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#212

Post by enraged_camel »

manigandham wrote: post #184
mirimir wrote: post #171

Earlier quoted context omitted.

From what I've read, they often don't make enough to even cover their increased vehicle expenses. And then there's insurance exposure. Also, TFA notes that classification of drivers as employees would increase costs by over 20%. If that's true, someone here is getting screwed. Drivers, governments, or both. But still, I value freedom highly. So I do get the argument that people ought to have the right to work how the…

Articles are a poor source. The drivers wouldn't be driving if they weren't making any money. I've taken thousands of rides and discussed Uber with about 90% of my drivers. While they all would like to make more money (who wouldn't?), they all make a profit and enjoy the flexibility the most.

>> The drivers wouldn't be driving if they weren't making any money.

This might surprise you, but most people are absolutely terrible when it comes to making complex financial decisions involving multiple variable factors over a period of time.

The tiny percentage of ride-share drivers who do meticulously keep track of their finances have all said the same thing: at the end of the day, when you factor in everything, you barely make any money - if everything goes well.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#213

Post by zzzzzzzza »

nemo44x wrote: post #208
microcolonel wrote: post #160

Earlier quoted context omitted.

Property taxes turn out to be a better way for states to do the bulk of tax collection. The focus on income taxes is probably a big part of why the property values in some of Cali are so insane.

That and interest rates. As rates fall property values will rise in proportion. A home’s value is what people that want to live there are willing to pay and can afford each month. So it either goes to the bank, the owner, or the tax collector.

saying low interest rates case high property values is putting the cart before the horse, mortgages cause high home prices. You could have high interest rates, but if they gave high interest loans out like candy to anyone who wanted one, home prices would still rise.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#214

Post by jdhn »

tnecniv wrote: post #158
nemo44x wrote: post #24

There's no escaping this from states like NJ, CA, IL, MA, and NY. These states (of which I am a member of) are broke with pension obligations waiting to bankrupt the government. Taxes are already high both on income and property so there's nowhere to go there. They have old infrastructures and although the citizens are heavily taxed, government can't make improvements in large part because of lifetime pension obligat…

Also in NJ, it's pretty well known that both businesses and individuals are flowing out of the state due to taxes when they are able. The main reason my parents moved south when they retired wasn't the weather but the fact that they couldn't retire how they wanted with the property taxes in this state.

So true. My parents live in Central Jersey, and their property taxes are probably going to top $12k this year. Just like your parents, they like living in the state, but at some point the fiscal situation just won't be tenable.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#215

Post by manigandham »

thelock85 wrote: post #189
manigandham wrote: post #181

Earlier quoted context omitted.

What's wild west about it? What needs to be regulated exactly vs having people drive their own cars?

I’m no fan of unnecessary regulation, but you cannot compare externalities of driving your own car for your own purposes vs. ride share, accept in cases where people are ride share driving in the same capacity/frequency as personal driving. My opinion is that people who drive their own cars don’t do so at the same clip as people driving for money. In the former, people do so out of convenience or routine. In the latt…

It's the same amount of driving. The Uber drivers are giving rides to people who need to get somewhere, and who would otherwise be using their own cars or taxis.

If anything there are less total cars on the road since the same Uber driver can service many passengers (or same amount of cars delivering more people with less parking).

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#216

Post by rsj_hn »

rsclient wrote: post #93
toomuchtodo wrote: post #36

Earlier quoted context omitted.

Illinois: https://www.reuters.com/article/us-illinois-pensions/illinoi... (Illinois' unfunded pension liability climbs to $133.5 billion) https://www.policyed.org/pension-pursuit/pension-liability-s... (PolicyEd: Interactive Map of Pension Liability by State and City) Illinois is an outlier, and is seriously in trouble, but most other states will be fine.

Total pension liability (from your numbers): 133.5 billion There are 12.80 million people in Illinois, so the per-person liability is $10429 A typical pension is paid out over the course of about 20 years. The liability per person per year is $521 Put differently: the pension liability per year is 6.675 billion. Illinois rakes in about $45 billion per year in taxes. That's at most "awkward" to handle and at best "eas…

First, what you are doing is taking a net present value of a discounted cash flow, dividing it up into pieces and then population.

You cannot do this.

Say there is a discount rate of 8% and you owe $100 per year for 20 years. That's a NPV of about $980.

Then you say, $980 divided by 20 years is only $49! It's nothing. You just turned an obligation of $100 per year into $49 per year.

See, the pensions, when they say they have a shortfall of X, what they mean is that if they got X today, and invested it with their expected rate of return, in the future they would have what they need to pay out their obligations. They are not saying that their obligations are X when they are added together across time without discounting.

Second, in the case of pension funds, the discount rate is how much they think they can earn with the money. The pension industry has different assumed rates of return, but the most consistent one I've heard is 8%, which in today's world of secular low rates is insane. There is a whole world here of pension funds reaching for yield as risk free instruments drop to very low rates, and this is by far a much bigger impact on pensions than anything else and something not talked about when people cheer low interest rates. This is causing pension funds to be in shortfall all across the world.

There is also the issue that some pension plans contain provisions for health insurance, which is also hard to predict.

So I'm not saying I have the right number, but without knowing their discount rate or future obligations, you are not going to be able to get a good number.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#217

Post by dantheman »

bamboozled wrote: post #185
manigandham wrote: post #166

Earlier quoted context omitted.

Regulation is what made taxis so terrible. We don't need the government to control everything. Many of the externalities you describe would be the same if people just drove their own cars. If ridesharing is so bad then govt should invest in proper public transport to create more choice, not try and crush a valuable service used by millions.

There are some crap Taxi's in Tokyo, but on average they're amazing. I'm sure there is still regulation and taxes they need to pay in Japan too. It's not just because they're Taxis they suck. There is also bad Uber drivers too.

Never had a bad uber driver, but I've had a ton of bad taxi drivers -- and I've ridden in uber far more.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#218

Post by koolba »

manigandham wrote: post #181
GVIrish wrote: post #179

Earlier quoted context omitted.

The answer to bad regulations is not necessarily no regulations. The taxi medallion system was broken and in need of an overhaul. Replacing a broken system with a ridesharing Wild West is not optimal. I agree that there needs to be a lot more investment in mass transit but in the meantime governments shouldn't be turning a blind eye to regulating ridesharing.

What's wild west about it? What needs to be regulated exactly vs having people drive their own cars?

Car safety, accepting multiple payment options, refusing pick ups or drop offs to particular neighborhoods, scam pricing...

There’s plenty of reasons to have some regulation. What was missing previously wasn’t regulation, it was competition.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#219

Post by learc83 »

manigandham wrote: post #183
danans wrote: post #180

Earlier quoted context omitted.

> If ridesharing is so bad then govt should invest in proper public transport to create more choice This is an excellent idea, and is consistent with also taxing any societally borne externalities caused by ride-sharing, the primary being congestion. And taxis should be held to the same regulatory standard.

The congestion would be the same if people just drove on their own. You can see this in Los Angeles and New York. The answer to getting cars off the street (whether private or shared) is to build other options that people can use. Taxis are cars too by the way. How did all those taxi regulations improve externalities?

There's studies that show uber increasing congestion. It makes sense when you think about it. Uber drivers are routinely on the road with no passengers. Either waiting or driving to or from picking up a passenger.

Re: Uber Hit with $650M Employment Tax Bill in New Jersey

#220

Post by manigandham »

bamboozled wrote: post #185
manigandham wrote: post #166

Earlier quoted context omitted.

Regulation is what made taxis so terrible. We don't need the government to control everything. Many of the externalities you describe would be the same if people just drove their own cars. If ridesharing is so bad then govt should invest in proper public transport to create more choice, not try and crush a valuable service used by millions.

There are some crap Taxi's in Tokyo, but on average they're amazing. I'm sure there is still regulation and taxes they need to pay in Japan too. It's not just because they're Taxis they suck. There is also bad Uber drivers too.

Why are they amazing? Japan has great public transportation and very dense cities. It's not as car-centric as the US but the taxi system still has similar problems.

No apps, need to communicate destination (possibly in a foreign language), primarily use cash, expensive, paper receipts, no real-time status/tracking, hard to get back lost items, etc. They might be cleaner and quieter but those are minor details.

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