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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

#51

Post by peeters »

boona wrote: post #46
peeters wrote: post #33

Earlier quoted context omitted.

If it quacks like a duck, it gets taxed like a duck. Uber has made a business out of exploiting legal loopholes. They know it, their users know it, the politicians know it. It's just been a race to close them. I have no sympathy for Uber in this. They obviously provide a valuable service to people, so I'm sure they'll survive. Now they'll just be competing on an even playing field.

>Uber has made a business out of exploiting legal loopholes. I find that kind of argumentation silly. They brought to the taxi industry, what is common in other industries, like construction, tech, etc. Stated differently, Uber has been able to provide a competitive service by legally structuring themselves in a way maximizes return for the themselves, for the driver, but still keeps costs low client due to say struc…

They brought everything they could. I'm not criticizing them for that. Taxi companies didn't even have apps 5-10 years ago. But a ton of what they have been doing obviously goes against the spirit of the laws they're leveraging. The GST loophole is a perfect example. It's meant to allow tiny businesses to avoid the paperwork and overhead associated with collecting GST. But Uber would be doing all that overhead for their "employees", since they broker all of the fee collection. So the employees wouldn't have to bear that cost anyway. Why should they be exempt then?

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

#52

Post by jmcdiesel »

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.

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

#53

Post by madeofpalk »

thrill wrote: post #15
vkou wrote: post #7

The 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…

Uber drivers are not employees. They are independent contractors. Uber, as part of their service, collects money from riders, giving both the rider and the driver a comfort factor as they don't have to deal with cash. As "hobby" businesses they each individually were enjoying the exemption. Now they will not - because we can't have "hobby" businesses causing discomfort to the well connected.

Naa, that's bullshit.

I download the Uber app, Uber finds me a ride, Uber sets the price, Uber charges me, and I pay Uber. Uber should be collecting GST/sales tax. I don't understand how else you could look at it!

Uber is essentially doing the same thing here in Australia and the courts are getting involved to make a ruling.

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

#54

Post by madeofpalk »

basch wrote: post #31
BillyParadise wrote: post #23

Earlier quoted context omitted.

Agreed re. contractors. When you use the Uber app, you pay Uber. Not Joe Shmoe and his nice newish car. Therefore the HST should be payable, to Uber. In turn, drivers who earn > $30k should provide their HST number to Uber, and Uber should be billed HST in remittances. In turn, drivers can write off HST paid on all business-related expenses. Yay, Value Added Taxes.

Stripe, Square? What makes Uber different from payment processors with built in fraud protection layers?

Consumers never buy anything from Stripe or Square.

Consumer buy ride services from Uber.

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

#55

Post by madeofpalk »

Andys wrote: post #43
thrill wrote: post #15

Earlier quoted context omitted.

Uber drivers are not employees. They are independent contractors. Uber, as part of their service, collects money from riders, giving both the rider and the driver a comfort factor as they don't have to deal with cash. As "hobby" businesses they each individually were enjoying the exemption. Now they will not - because we can't have "hobby" businesses causing discomfort to the well connected.

Australia has laws about this: eg. If you do >80% of your work for one company, you are an employee for all tax/employment law purposes.

I don't think that effects GST though...

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

#56

Post by kazinator »

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.

If cabbies are contractors, there is still the question of who handles the rider's money.

I'm a software development contractor myself. But I don't handle the revenue of the company or companies I work for, from their customers. So the GST on that revenue is none of my business at all.

Similarly, a cab company could operate such that cabbies are contractors, but the company collects the fares, and then pays the cabbies out of that under whatever compensation terms are between the cabbies and the company.

In that case, since the company is not a small operator meeting the 30K-and-under rules, it has to collect and remit GST.

Some of the drivers might meet the rule themselves. They bill the company with their invoices and do their own GST accounting. Those that work a lot charge the GST. Some that work only little can get away without it. Either way, that makes no difference to the cab company. When that company is charged GST by a contractor, it can probably subtract that from the GST it collects and remits as a "GST input credit". When it isn't charged GST, it doesn't subtract.

Either way, the company can get the contractors "GST free". This is fair when we consider that a company with permanent employees also gets them "GST free".

The "GST cheating" in Uber is probably that the drivers themselves are not just considered contractors, but entire one-person transportation businesses which collect revenue directly from the riders. Effectively, each Uber driver is an entire one-person cab company operating one cab. Uber is then their supplier: they pay something to Uber for the services of being in the Uber network.

If there are large numbers of part-time Uber drivers that meet the 30K exemption, then that's a big loss of potential GST revenue to CCRA, compared to if those drivers were contractors who get paid by a cab company that itself collects fares with GST (even with the input credits they may get). When a driver meets the exemption, the CCRA gets no GST whatsoever from that piece of the pie: not even the difference between GST on some sales, and input credits with respect to the driver associated with those sales

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

#57

Post by briandear »

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 then generate more tax revenue. Laffer Curve 101.

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

#58

Post by makmanalp »

stormbrew wrote: post #30
jacquesm wrote: post #17

Earlier quoted context omitted.

> Uber drivers are not employees. This is Canada. I'm sure that's how Uber would like to see it but not everybody agrees: http://business.financialpost.com/news/transportation/uber-d...

Ironically, this is something cab companies probably don't want. It'd be cutting off their nose to spite their face. Most cabbies are also contractors and in fact pay to use the cabs they drive on a daily basis. It would wreck the cab industry if dispatch companies (to which cabs are exclusively tied) had to make all their drivers employees.

And good riddance, the cab industry has long been problematic in its own way, with its own worker abuse issues and non-competition problems. Disliking uber doesn't mean supporting cab medallion owners.

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

#59

Post by Mikeb85 »

thrill wrote: post #15
vkou wrote: post #7

The 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…

Uber drivers are not employees. They are independent contractors. Uber, as part of their service, collects money from riders, giving both the rider and the driver a comfort factor as they don't have to deal with cash. As "hobby" businesses they each individually were enjoying the exemption. Now they will not - because we can't have "hobby" businesses causing discomfort to the well connected.

Do the drivers set their own price? No? Then they're not contractors.

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

#60

Post by prolly_a_moron »

thrill wrote: post #15
vkou wrote: post #7

The 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…

Uber drivers are not employees. They are independent contractors. Uber, as part of their service, collects money from riders, giving both the rider and the driver a comfort factor as they don't have to deal with cash. As "hobby" businesses they each individually were enjoying the exemption. Now they will not - because we can't have "hobby" businesses causing discomfort to the well connected.

>Uber drivers are not employees. They are independent contractors.

This is under dispute, and I think you're going to find that governments around the world disagree with you.

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