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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

#81

Post by boona »

peeters wrote: post #51
boona wrote: post #46

Earlier quoted context omitted.

>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 th…

I'm still not sure how that's considered a loophole. The people who work for them are in fact small business operators, and it most certainly does simplify the process for them not having to pay for GST.

Is your argument that you wish they had structured it differently so they were forced to pay more taxes? If that was the case then the drivers would be making a less, and the passengers would pay a more to cover the costs of the GST, and I don't see the point in that.

If taxi companies want to level the playing field, why don't structure themselves in more innovative ways like Uber did instead of forcing others to pay more taxes?

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

#82

Post by qeternity »

graeme wrote: post #69
kazinator wrote: post #42

Earlier quoted context omitted.

Yes, in fact that is how it works. If multiple independent contractors work for some firm, they each get their 30,000 exemption (if eligible) as individual sole proprietors of their individual businesses. They have their own business numbers and GST accounts which are considered individually. Contractors are considered employees in some ways and not in others. This is mainly under labor ("labour", here in Canada) law…

The firm still collects GST though. It just doesn't need to pay GST to it's contractors. In practice, the firms net finance shouldn't be different regardless of whether they have employees or exempt contractors. Consumers contract with Uber, and pay Uber. So from what I can see, Uber should be collecting, for itself.

Fine, so knowing this, Uber collects GST and reduces the fare by the offsetting amount. In one pocket and out of the other. It's purely optics.

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

#83

Post by CountSessine »

chollida1 wrote: post #9

Uber'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 reven…

it highlights that Uber was confounded by Canadian Garret Camp

s/confounded/co-founded/cg

Sorry for the nit-pick, but in this case the word confounded had me genuinely confused about what this special interest group, Canadian Garret Camp, is (are they angel investors? some sort of VC incubator? a front-group for taxi companies?), and why they were lobbying for removing Uber's GST exemption.

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

#84

Post by zht »

narrowrail wrote: post #80
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.

I used to work for Landstar[0], which operates in a very similar way to Uber, but in the trucking industry. The company has been around for almost 30 years and the drivers are considered Owner-Operators[1] (i.e. contractors). I was under the impression that an Uber driver could choose not to take any given fare(just like our truckers could). There seems to be some irrationality when it comes to Uber among my fellow e…

if the Landstar drivers refuse too many fares are they banned forever from the system?

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

#85

Post by run4yourlives2 »

qeternity wrote: post #82
graeme wrote: post #69

Earlier quoted context omitted.

The firm still collects GST though. It just doesn't need to pay GST to it's contractors. In practice, the firms net finance shouldn't be different regardless of whether they have employees or exempt contractors. Consumers contract with Uber, and pay Uber. So from what I can see, Uber should be collecting, for itself.

Fine, so knowing this, Uber collects GST and reduces the fare by the offsetting amount. In one pocket and out of the other. It's purely optics.

Except for the fact that the GST gets remitted to the government, instead of to Uber. Your suggesting is an 5-17% reduction in margin, dependent on province.

Either way, collecting GST on a sale is the norm in Canada, regardless of what happens on the back end.

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

#86

Post by stormbrew »

kazinator wrote: post #49
stormbrew wrote: post #36

Earlier quoted context omitted.

Can your grocery store contractors come in whenever they want, wear whatever they want, use whatever till software they want?

Can a building contractor wear whatever they want, like a ball cap instead of a hard hat and sneakers instead of steel toe boots? Can a software contractor code in any programming language and on and operating system, whether or not the client uses them? Can he or she flout the HR policies, while on site?

There are regulations about what people involved in construction have to wear while they're working. It's not the contractee's sole discretion in that case. But if you're an independent building contractor and you want to come to work in sequined coveralls then sure?

A software contractor can indeed work in whatever they want, but the contract may stipulate some things about that and not doing so would be breach of contract. Obviously a contractor is bound to the terms of their contract.

In this case the analogy is the contractor using their own computer and software to manage their work process, not terms of what the work product is.

Likewise, if they're not an employee and their contract doesn't stipulate anything about behaviour on site than I would expect them to follow the law rather than policies they never agreed to... Is everyone entering a workplace subject to HR rules they've never even seen?

For reference, the things that I was vaguely referring to are described in detail here: http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#facto...

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

#87

Post by jy1 »

prolly_a_moron wrote: post #70
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…

> If they want to simplify taxes -- as they claim, the best way to simplify is simply to eliminate. Because consumption taxes are the most efficient form of taxation. You want a private chauffeur? Pay up. > Lower fares mean more revenue for drivers and Uber Huh? Only if the driver is working a lot harder.

It's possible if there's significantly higher utilization to offset the decreased cost. Today a significant portion of the driver's time is waiting around doing nothing.

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

#88

Post by makmanalp »

seanmcdirmid wrote: post #63
makmanalp wrote: post #58

Earlier quoted context omitted.

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.

This would basically mean the end of taxis and uber. Just mass public transportation and guys running everything by themselves would survive.

Am I honestly to believe the tech industry can shoot a rocket into space and do any number of miraculous things, but can't create a solvent cab hailing service that pays workers living wages and basic benefits? The word benefits makes it sound like it's a luxury, but stuff like healthcare and retirement planning is anything but, especially for low income workers. Somehow when it comes to innovation, the last place we want to do it is to helping people in a non-flashy way.

Besides, even without innovation, cabs/ubers can just cost more, or cab company owners (I don't mean the drivers) can just make less profit.

edit: I also think that welfare and healthcare should come from the government and not from companies, but I just don't understand how being profitable enough to pay people decent wages is a political problem at all. Nothing political about this - it just requires making a simple decision to divert some of your profit into something other than shareholder pockets.

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

#89

Post by charlesdm »

briandear wrote: post #62
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.

There is no such thing as a loophole. The law is the law. Isn't every tax deduction really just a loophole? It's every company's fiduciary duty to minimize expenses using any legal means at their disposal. It's idiotic to criticize a company for using the law to their advantage. There is nothing stopping a competitor from doing the exact same thing. The law applies equally to everyone. It isn't Uber's fault taxi comp…

Uber had a special use case, which allowed them to claim certain tax benefits. These have now been adjusted in Canada.

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

#90

Post by run4yourlives2 »

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.

Irrelevant.

If you say you'll build me a website for $100, and I in turn contract that out to some guy in India, I'm still required to charge you $100 + $5 GST. The fact that I didn't use an employee to provide the service is of no issue.

It's right to close the loophole that really should never have existed in the first place, if not for industry lobbyists.

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