How Uber may have improperly taxed its drivers
Amid the Uber upheaval that led to the resignation of Travis Kalanick as CEO, the company announced a series of changes at the end of June to enhance the working experience of its drivers, there are including a new deposit option in their application Passengers.
But even if Uber made a concerted effort to win drivers, he has not recognized all the ways in which he can push in the state of New York.
In May, Uber has agreed to take excessive commissions on the rates of its New York drivers, who are independent contractors, and pledged fines. The increase in evidence, however, suggests that the company may have failed drivers much larger sums than it acknowledged.
The following signs indicate that the improperly deducted service that could represent hundreds of millions of dollars of profits for drivers who pay taxes under New York State law are duly required by passengers:
Subtracting the tax rate that a driver receives is not in itself proving that drivers pay the tax. Authorities say Uber’s 19.16-meter rate has already included the tax – just as a $ 1 pizza includes taxes – and that it was therefore appropriate for Uber to collect the tax by subtracting the price drivers receive And send to the government.
In 2015, Uber began to think this approach in his passenger payment so that a passenger would have to pay the price includes sales tax and workers’ compensation surcharge.
(Under the Uber system, published sales tax is sometimes calculated on a pre-trip passenger fare that does not necessarily correspond to the measured speed.)
In practice, the way a company shows a tax revenue is not, in one way or another, if the driver or the passenger actually pays the tax.
To determine who actually pays in a case like this, is whether the price the company charges passengers does include taxes. If this is not the case, the passenger does not pay the tax – the driver, regardless of the amount indicated by the passenger.
One way to look at this is to compare Uber trips as represented to New York with the way they have represented trips to other States that apply a tax.
In Nevada, which applies a 3 percent tax on Uber’s wrinkles – formally a consumption tax – measured rates listed on travel receipts do not include tax. Instead, the tax was added above the fare, so the passenger has paid the price that the driver received plus taxes.
Receiving a trip from Reno to Carson City shows a “transportation recovery charge” of $ 1.36; That is, the addition of taxes at $ 42.67 fee. Both were paid for by the passenger.
This contrasts with the way Uber operated in New York the company has generally deducted from the tax rate of $ 42.67 that the driver and the passenger received should not have to pay an additional amount for taxes.
Receipts from Rhode Island, another state with a sales tax, have shown that Uber tax rates added that the driver received.
Uber declined to comment on this article. The sales tax issue is being contested as part of a Uber lawsuit filed by the New York Taxi Workers Alliance, a group of drivers.