3 ms·

What parallel universe are you living in where taxi companies are tax abiding enterprises? It's well known (even to the IRS) that the cash dominated business of

by jonknee 12y ago

What parallel universe are you living in where taxi companies are tax abiding enterprises? It's well known (even to the IRS) that the cash dominated business of taxis is a giant bastion of unreported income. This is one of the reasons why in many cities you frequently get harassed when trying to pay with a credit card (and lied to, it's amazing how often the CC machines is "broken" when you pull out a card). Uber has not accepted $1 in cash which means its hundreds of millions of dollars of revenue is all reported. It's a boon for tax revenue. Also, mileage/fees/payment have always been part of the app. Have you used Uber before?

mschuster91 12y ago
> What parallel universe are you living in where taxi companies are tax abiding enterprises? At least in Germany, it is - at least for the companies. There are some drivers willing to game the books, but the companies have an obvious interest in eradicating these practices.
- jonknee 12y ago
  > the companies have an obvious interest in eradicating these practices What is that interest? The way cabs most frequently work in the US is that the drivers are effectively independent contractors who rent the car (and ever valuable medallion) from the taxi company. The companies themselves may or may not accurately report their income, but it doesn't have anything to do with the fares. Some companies charge a percentage of fares, so in that instance I'd assume there are more stringent controls. It's similar to restaurants in the US, cash tips are drastically underreported and this is fully known by management.
  - mmarx 12y ago
    Typically, the drivers are employed by the companies, and are paid either by the hour, or receive a percentage of the fares. In either case, underreporting the fares to the company increases the driver's share. Also, tips, though they must be reported, are exempt from taxation.
    - cauterized 12y ago
      Tip income is not exempt from taxation. The employer doesn't have to pay taxes on it, but the employee does.
      - mmarx 12y ago
        EStG, § 3 Nr. 51 explicitly lists tips as tax-exempt: http://www.gesetze-im-internet.de/estg/__3.html http://www.gesetze-im-internet.de/estg/__3.html
        cauterized 12y ago
        In Germany?
  - Spooky23 12y ago
    All cash businesses are leaky. But just like with bartenders, it's pretty easy for a company to identify a driver who is skimming the fares -- their $/mile or $/hour will be lower if he steals more than his peers. The cab company has an interest in accurate numbers because their payment is based on honest reporting of the fares.

by jonknee 12y ago

mschuster91 12y ago

> What parallel universe are you living in where taxi companies are tax abiding enterprises? At least in Germany, it is - at least for the companies. There are some drivers willing to game the books, but the companies have an obvious interest in eradicating these practices.

jonknee 12y ago
> the companies have an obvious interest in eradicating these practices What is that interest? The way cabs most frequently work in the US is that the drivers are effectively independent contractors who rent the car (and ever valuable medallion) from the taxi company. The companies themselves may or may not accurately report their income, but it doesn't have anything to do with the fares. Some companies charge a percentage of fares, so in that instance I'd assume there are more stringent controls. It's similar to restaurants in the US, cash tips are drastically underreported and this is fully known by management.
- mmarx 12y ago
  Typically, the drivers are employed by the companies, and are paid either by the hour, or receive a percentage of the fares. In either case, underreporting the fares to the company increases the driver's share. Also, tips, though they must be reported, are exempt from taxation.
  - cauterized 12y ago
    Tip income is not exempt from taxation. The employer doesn't have to pay taxes on it, but the employee does.
    - mmarx 12y ago
      EStG, § 3 Nr. 51 explicitly lists tips as tax-exempt: http://www.gesetze-im-internet.de/estg/__3.html http://www.gesetze-im-internet.de/estg/__3.html
      - cauterized 12y ago
        In Germany?
- Spooky23 12y ago
  All cash businesses are leaky. But just like with bartenders, it's pretty easy for a company to identify a driver who is skimming the fares -- their $/mile or $/hour will be lower if he steals more than his peers. The cab company has an interest in accurate numbers because their payment is based on honest reporting of the fares.