6 ms·

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 politi

by 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.
- _jal 10y ago
  > 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. In fact, they haven't. They're taking a huge loss on subsidies to the fares.
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.

by peeters 10y ago

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.
_jal 10y ago
> 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. In fact, they haven't. They're taking a huge loss on subsidies to the fares.

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.