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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 dr

• peeters 10y ago
  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.
  • charlesdm 10y ago
    Sure. No problem. They've used loopholes for the last 4+ years, which is fine. Given they still have a massively superior service to taxi's, now let them compete.
    • AndyNemmity 10y ago
      They used to have a massively superior service to taxis, until taxi drivers started to work for Uber. The quality has dropped dramatically.
      • wavefunction 10y ago
        Maybe working for Uber became more like driving a taxi... dun dun dun
  • deleted 10y ago
    [deleted]
  • boona 10y ago
    >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 structuring.
    • peeters 10y ago
      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?
      • boona 10y ago
        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?
        • slavik81 10y ago
          The GST is supposed to apply to just about everything equally, with a few exceptions. If you want consumers to pay less GST, vote for a government that will reduce it, as in 2006. The government is doing exactly the right thing in changing the law so that irrelevant differences in corporate structure don't affect the tax paid.
  • briandear 10y ago
    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 companies have structured their businesses the way they have.
    • peeters 10y ago
      Yep, the law is the law. Which is why the government is changing the law instead of just complaining loudly.
    • charlesdm 10y ago
      Uber had a special use case, which allowed them to claim certain tax benefits. These have now been adjusted in Canada.
    • enraged_camel 10y ago
      >>There is no such thing as a loophole. The law is the law. Isn't every tax deduction really just a loophole? No. A loophole is when a given law is exploited in a way that was not intended by the people who wrote it, usually by resorting to small technicalities in the law itself, or by referring to other, related laws. In this particular case, a law that was intended to benefit small businesses is being exploited by a mega corp. Hence, loophole.
    • wastedhours 10y ago
      Isn't it technically incorrect it's their fiduciary duty to minimise expenses? As long as a company has a rationale for their decision (with negative PR from tax issues being a legitimate one), there's no onus on them to hunt loopholes out.
  • narrowrail 10y ago
    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 engineers, and I can't figure out why. [To be clear: I've never used Uber nor would I generally consider it over my local 'trolley' in the ~35K population town in which I live.] [0]https://en.wikipedia.org/wiki/Landstar_System https://en.wikipedia.org/wiki/Landstar_System [1]https://en.wikipedia.org/wiki/Owner-operator https://en.wikipedia.org/wiki/Owner-operator
    • zht 10y ago
      if the Landstar drivers refuse too many fares are they banned forever from the system?
      • narrowrail 10y ago
        Not officially, but I'm sure it was happening. Each individual Landstar broker operates independently as well, so if a given driver is constantly saying no, I am certain the broker would stop calling that driver (or at least put them further down the list). It was obviously a more 'manual' and distributed process, that started in the 70's with companies like Dial-a-Truck: https://en.wikipedia.org/wiki/Dial-a-truck https://en.wikipedia.org/wiki/Dial-a-truck These systems morphed into what is called a 'load board,' and Landstar operated what was more of a network of independent trucking brokers with their own shared/ private load board.
    • frgtpsswrdlame 10y ago
      Imo the contractor designation should be limited to people who have pricing power for their work. Uber drivers have none.
      • gshulegaard 10y ago
        Technically, having the option to decline fares is a form of pricing power.
  • jimmywanger 10y ago
    You're missing the main point of the argument. It's not a loophole. There are a certain number of criteria for employees vs contractors, based on whether training/equipment is provided, price setting, ability to turn down jobs, etc etc. If you're classified as an employee, there are a bunch of things you have to do, such as collect GST, deal with health care, sick days, paternity leave, taxes, etc. Uber is making the case that its drivers are contractors, since they set their own hours and purchase and maintain all their own equipment. It's a plausible argument, and that's something for the courts to sort out. Just saying that they need to collect GST because the drivers are employees is begging the question. If Uber drivers are classified as employees, what's next? Upwork and eLance workers classified as employees?
    • rdiddly 10y ago
      They need to collect GST because a Good or Service is being provided and that's what the Tax covers.
      • jimmywanger 10y ago
        You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status.
        • rdiddly 10y ago
          I'm deliberately ignoring your point actually, because it's moot. The law is being changed to eliminate your first case (independent small suppliers) and declare those services to have been provided by a single entity (Uber). Both sides of your debate are now one. There's a certain amount of circular reasoning inherent here, because a government ministry made a declaration. It's not just an objective observation of reality, it's a declaration of what that reality will be henceforth. Was it a good decision? In my opinion yes, because it better reflects the original intent of this particular tax. Anyone trading on the brand-name of "Uber" and using Uber's infrastructure is not a small supplier (who has to build and market their own brand and build their own infrastructure). And they are clearly supplying a good or service, which was my point expressed in embryonic form above, so they can go ahead and collect the tax.
• Andys 10y ago
  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.
  • madeofpalk 10y ago
    I don't think that effects GST though...
• madeofpalk 10y ago
  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.
  • dalbasal 10y ago
    This is, IMO, the best way of looking at it. Whether or not Uber's drivers are employees is a completely separate matter and your point stands regardless. The consumer is paying Uber. Whether Uber uses employees, contractors, clockwork automatons or aliens to provide their service is irrelevant.
  • anomaly_ 10y ago
    It's a little different in Australia. The GST registration threshold is $75,000, but there is a specific carve out for taxis that forces registration/collection of GST for taxis regardless of turnover. The ATO (and now the Federal Court) aren't challenging the contractor/employee position of Uber - rather just that the individual drivers should be collecting and remitting GST on their fares.
  • jimmywanger 10y ago
    The same thing applies to Manpower or any temp agency. "I call manpower, manpower sets the price, manpower charges me, and I pay manpower!" Except in that case temp agencies are clearly employing contractors, and thus don't have to pay GST. Not everything is black and white. If they were, the government would easily have been able to block their actions. Right now they're trying to figure out what's going on and charge them appropriately.
  • foobar1962 10y ago
    The Australian GST legislation specifies that taxi drivers MUST be registered for GST regardless of income.
• jacquesm 10y ago
  > 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-drivers-are-employees-not-contractors-canadian-lawsuit-argues http://business.financialpost.com/news/transportation/uber-d...
  • stormbrew 10y ago
    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.
    • makmanalp 10y ago
      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.
      • seanmcdirmid 10y ago
        This would basically mean the end of taxis and uber. Just mass public transportation and guys running everything by themselves would survive.
        • makmanalp 10y ago
          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.
• vkou 10y ago
  If I staff my grocery store with contractors, can I claim a $30,000/contractor tax exemption too? The intent of the law is pretty clear - serious businesses (That do more then $30,000/year in sales) are expected to pay taxes. Small ones are not - because of the small amount of tax revenue, and the high burden of compliance for individuals. The cost of compliance for Uber is trivial. It's a bloody app, for Pete's sakes.
  • BillyParadise 10y ago
    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.
    • Svexark 10y ago
      When I buy a book from Amazon, I pay Amazon, not the seller. Therefore, the seller is an employee of Amazon.
      • ribosometronome 10y ago
        When you buy a book from a seller on Amazon, who sets the price?
        • Anderkent 10y ago
          Very often Amazon
        • thaumasiotes 10y ago
          Just as you'd expect if Amazon was a physical bookstore - the store sets the price. Did you think authors were employees of Barnes and Noble?
          • 10y ago
• Mikeb85 10y ago
  Do the drivers set their own price? No? Then they're not contractors.
• prolly_a_moron 10y ago
  >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.
• pyrale 10y ago
  > because we can't have "hobby" businesses causing discomfort to the well connected. When this sentence is used by the well-connected elite of the best-funded region in the world, somewhere, the world's tiniest orchestra plays a sad tune on the world's tiniest instruments. Seriously, guys ~~
• run4yourlives2 10y ago
  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.
• milesrout 10y ago
  Uber drivers are absolutely employees. They might claim that they are independent contractors, but they are not independent contractors. The law doesn't just say 'you can decide that your employees are contractors if you want to'.
• dorfsmay 10y ago
  What are you talking about? Uber is like a builder who hires contractors. The builder's revenue is >30 k CAD therefore they need to collect and remit GST. If some of the contractors were to make less than 30 k per year, then they don't need to charge GST, regardless of who the builder is or the size of the projects they work on. The "end user", the person paying for the house, deals with the builder, hence pays GST.