06 July 2017

This is Not an Accident

Does anyone believe that Uber made an honest mistake in tax calculations when it took hundreds of millions of dollars from its drivers?

I certainly don't:
Amid the turmoil at Uber that resulted in Travis Kalanick’s stepping down as chief executive, the company announced a series of changes in late June aimed at improving its drivers’ work experience, including a new tipping option in its passenger app.

But even as Uber makes a concerted effort to win over drivers, it has not acknowledged all the ways it may have squeezed them in New York State.

In May, Uber admitted to taking excessive commissions out of the fares of its New York drivers, who are independent contractors, and promised to make amends. Increasing evidence, however, suggests that the company may have shortchanged the drivers by far greater sums than it acknowledged.

The following are signs that the ride-hailing service improperly deducted what could amount to hundreds of millions of dollars from drivers’ earnings to pay taxes that, under New York State law, are technically due from passengers:
  • Uber receipts from other states reflect a tax accounting at odds with the company’s justification for deducting sales tax from the fares received by its New York drivers.
  • Language from Uber’s recent contracts indicates that the company should not have taken the taxes from those fares.

Uber has insisted there was nothing improper in its handling of the taxes. Here is a look at the law and the evidence on the question — including the way a major competitor, Lyft, deals with the same issue.
If anyone believes that Uber was acting in good faith, they haven't been following the news lately.


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