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Canada To Tax Ride-Sharing Providers Like Uber (www.cbc.ca)
Canadian Prime Minister Justin Trudeau and his government announced plans to tax ride-sharing providers like Uber for the first time. According to CBC, the latest consumer tax changes included in Wednesday's federal budget "will add to the cost of Uber rides while ending a public-transit credit." The idea behind the decision is to "help level the playing field and create tax fairness." From the report: The proposed levy on Uber and other ride-hailing services would for the first time impose GST/HST on fares, in the same way they are charged on traditional taxi services. The change will broaden the definition of a taxi business to ensure Uber and other web-based ride-hailing services are required to charge and remit GST/HST, adding to the cost of each trip. The effect on federal revenues will be modest, just $3 million in additional revenue in 2017-18, but the budget suggests the measure is to help level the playing field and create tax fairness. The non-refundable public transit tax credit -- a so-called boutique tax credit introduced by the previous Conservative government -- will be phased out on July 1. The credit enabled public transit users to apply 15 per cent of their eligible expenses on monthly passes and other fares toward reducing the amount of tax they owe. Ending that tax break is expected to save Ottawa more than $200 million a year. Of course, Uber Canada isn't so fond of the idea, calling it a "tax on innovation" that would hurt Uber drivers and users. The company said in a statement: "At a time when Canadians spend far too much time stuck in traffic -- and people should be encouraged to leave their cars at home, take public transit, and share rides -- we should be supporting policies that make sustainable transportation more affordable, not more expensive. Federal tax laws already offer small business owners a break on collecting sales tax, but unfairly exclude taxi drivers. The best way to support taxi drivers and level the playing field is to extend the same exemption to them."
>Federal tax laws already offer small business owners a break on collecting sales tax, but unfairly exclude taxi drivers. The best way to support taxi drivers and level the playing field is to extend the same exemption to them."
This is because the taxi driver's an employee everywhere but on paper. Uber's model is to exploit the system (which is good for cracking the cab licencing scheme but no better for tax collection and worse for the drivers).
If those drivers had resources (and at their wages they'll never save up enough to do anything), they could get together and pay some other entity to handle dispatching them, pay another entity to handle the money, and a third to vet drivers and vehicles. Keep 'em separate so they can't collude against the drivers.
But what really needs to be done is to reform the cab licencing systems.
Assuming Ubers drive around and not park when not in use it effectively is a car that is permanently "parked" on the road somewhere. But the thing is an uber will do many trips in a day presumably and those trips might have otherwise been in cars too. There still is inefficiency because the uber guy will spend some time driving to pick up the next person where as the next person could have just gotten in their own car which presumably is parked near by so more road miles will be driven. But: uber guys don't have to just drive around they can park and they have a benefit of not really caring too much where. They can park were it is free rather than where is close to a specific spot like a commuter would. They can also go to the next place over if one parking lot is too full where as that would be a nuisance to a commuter since they'd be further away from where they are going.
I'm a commuter in Canada and affected by this tax change. I don't think it is a matter of "fairness" to start taxing public transit. Driving around in an Uber is nearly as bad as driving your own car, being one of 1500 people on a commuter train isn't. Also since the public is funding the public transit system why should be be taxed? It is already being paid for with tax money. Reduce the amount of the ride that you subsidize or whatever (though I think it might effectively be the same thing because you didn't avoid the tax till you applied a tax credit on your income taxes). How hard are people going to fight any fair hikes for the next few years given the effective cost is jumping 15% already? It still is usually the cheapest alternative though even with the hike so they'll probably get away with it. Sigh.