# Uber drivers of Australia read this!



## HotSniper (Mar 31, 2016)

*Uber feels the pinch as taxman closes in*








Uber chief executive Travis Kalanick.









Uber is on track for a $US3bn loss for the latest year.


If you were out on the town on New Year's Eve, you might have hailed a cab to get you home. And if you live in a big city, there's every chance you booked your ride through Uber.

Just six years after launching, the smartphone app has become a cornerstone of the private transport system. Users rave about Uber. And, in truth, what is there not to like? It's much more convenient - and often much cheaper - than a cab.

But, however brilliantly conceived its service may be, Uber is struggling to prove it can justify the stratospheric valuation it now commands.

Its chief executive, Travis Kalanick, 40, is plainly gifted when it comes to persuading investors to part with their money. To date Uber has raised more than $US7 billion ($9.7bn) and is valued at between $US65bn and $US70bn - at least $US10bn more than General Motors.

However, figures leaked recently reveal that Uber is shelling out vast sums in its relentless quest for expansion. In 2016's third quarter it is reported to have made an operating loss of $US800m. With Uber on course to plunge into the red to the tune of nearly $US3bn for last year, it will surely not be long before the abrasive Kalanick is again tapping investors for cash.

Uber is throwing money around with abandon, offering bargain fares and subsidies for drivers to fatten its customer base and squeeze out less lavishly funded rivals.

The company is engaged in a bloody winner-takes-all battle with the likes of Lyft in the US and myriad copycats across the globe. As if that wasn't costly enough, it is pouring money into ventures such as its food delivery arm UberEats and self-driving trucks and cars.

For Kalanick, autonomous vehicles are the end game. A fifth of the cash its customers spend on fares is eaten up by commissions paid to drivers. Future profits will largely depend on replacing drivers with machines.

The dream is to turn the motor industry on its head - Kalanick envisions a future where car ownership is replaced with instant access to a driverless vehicle, on demand.

The conundrum is what happens in the long hiatus before Uber can introduce vast self-driving fleets. For the time being, it must pay people to drive its cars. At the moment, it keeps a lid on costs by paying its drivers according to the level of fares they collect.

As with other gig economy companies, its drivers are not classified as workers so are not entitled to holiday or sick pay or superannuation. The company also does not pay them for idle time between jobs. By diluting its drivers' rights, Uber has a colossal competitive advantage over traditional cab firms.

However, its status is under attack in both the US and Europe. Drivers are rising up with legal challenges to their serf-like status. In October, a British employment tribunal ruled that Uber drivers should be classified as workers and receive the living wage. The company is challenging this, but if its appeal fails it will have to pay about £85m ($144m) a year extra in payroll taxes in Britain.

Its VAT (value-add tax, similar to GST in Australia) bill, however, could be exponentially higher. Currently, the majority of Uber drivers do not charge VAT to passengers. As self-employed people earning below £81,000, they do not have to charge VAT. If the drivers were deemed to be employees, Uber rides could be subject to the tax. Unless it raises fares, the VAT bill would move it even further away from profit.

So how much would it have to pay? Uber does not disclose the revenue it generates from its British customers, but an educated guess is possible. Uber has 40,000 drivers in Britain, who earn an average £16 an hour and work 26 hours a week. The typical driver, therefore, earns £21,632 a year, meaning the company hands £865m to its "workforce".

Yet that is not the total spent on Uber rides in Britain. When you book an Uber, your money is collected by a sister company in Amsterdam, which sends the money back to the driver, minus a 20 per cent commission. So the actual revenue Uber reaps from British customers is in the order of £1.1bn. The government would be within its rights to claim a sixth of that sum as VAT - going back for at least four years.

Governments everywhere are looking to rein in the gig economy. Uber may in future rid itself of the inconvenience of paying humans to drive their cars but, as Benjamin Franklin might have said, nothing is certain except death and taxes.

_The Times

http://www.theaustralian.com.au/new...n/news-story/556ab43933d8fc4b77c68c14195c82e3_


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## fields (Jul 11, 2016)

Apart from my original sign up bonus, I haven't received any of these subsidies for drivers and I am in my 12th month of driving. Article may be relevant for other states but not Sydney. 

As for the VAT/GST on Uber's commission, that has already been paid by us to the ATO.


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## HotSniper (Mar 31, 2016)

I am aware,Just updating what I read on new news about our UberOzz


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## GPH (Dec 1, 2016)

Subsidies! ...what subsidies?


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## pajala (Apr 24, 2016)

Only a matter of time before heads roll at Uber cant keeping putting your hand out for ever


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## Modern-Day-Slavery (Feb 22, 2016)

HotSniper said:


> For Kalanick, autonomous vehicles are the end game. A fifth of the cash its customers spend on fares is eaten up by commissions paid to drivers. Future profits will largely depend on replacing drivers with machines.


Wrong.. it's the other way around- a fifth goes to Uber


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## Thing (Oct 7, 2016)

Uber is so crooked....

If Kalanick swallowed a nail he'd shit out a corkscrew


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## Lowestformofwit (Sep 2, 2016)

Just wait for the classic press statement:
"Travis has the complete confidence of the Board".
We all know what happens next.


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## Duderx (Oct 13, 2016)

HotSniper said:


> *Uber feels the pinch as taxman closes in*
> 
> 
> 
> ...


So this numb nut thinks that "A fifth of the cash its customers spend on fares is eaten up by commissions paid to drivers.", try four fifths, idiot! (not you hot sniper, the Times reporter) This is a classic example of why our world is fast going down the gurgler - whoever wrote the Times article has no concept of real world economics. Dross!


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## HotSniper (Mar 31, 2016)

Duderx said:


> So this numb nut thinks that "A fifth of the cash its customers spend on fares is eaten up by commissions paid to drivers.", try four fifths, idiot! (not you hot sniper, the Times reporter) This is a classic example of why our world is fast going down the gurgler - whoever wrote the Times article has no concept of real world economics. Dross!


Its cool mate....i think the think tank for Uber has lost tge plot...too much money to burn.....its what i read....i wont be quoting anymore passages from know on.....i found lots more but i wont copy and paste.All i can tell you is that has lost its gloss and lots of paxs i rideshare with ate not happy
.Lots going on and i also heard on the great vines that Lyft is heading for international expansion with local partnerships or mergers wait and see what occurs.Apparently also in NY Lyft has blitzed Uber .....i wonder if its a sign of whats to come....lets see what happens


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## UberDriverAU (Nov 4, 2015)

fields said:


> As for the VAT/GST on Uber's commission, that has already been paid by us to the ATO.


Neither Uber nor drivers pay GST on Uber's commission. An interesting consequence if drivers end up being classified as employees is that they must be refunded any GST they've paid, and Uber will have to cough it up instead.


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## yogi bear (Dec 25, 2015)

UberDriverAU said:


> Neither Uber nor drivers pay GST on Uber's commission. An interesting consequence if drivers end up being classified as employees is that they must be refunded any GST they've paid, and Uber will have to cough it up instead.


 The tax office wrote me a detailed letter telling me to pay the gst on ubers commission, giving me an effectice GST rate of 12.5%


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## UberDriverAU (Nov 4, 2015)

yogi bear said:


> The tax office wrote me a detailed letter telling me to pay the gst on ubers commission, giving me an effectice GST rate of 12.5%


I don't think so. If you were paying GST on Uber's commission, you'd be paying 1/11th of each fare plus 1/11th of Uber's commission as GST. You only pay 1/11th of each fare.


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## yogi bear (Dec 25, 2015)

Total fare pax pays = $100
I get $80
Uber gets $20
I pay full GST of $9.09 on the $100
Rather than $7.27 on my share.

..as instructed in writing by the ATO.

Uber refuse to pay GST on their share, ****ed if i know how they get away with this, but they do.
They're based in netherlands for tax purposes btw.


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## UberDriverAU (Nov 4, 2015)

yogi bear said:


> Total fare pax pays = $100
> I get $80
> Uber gets $20
> I pay full GST of $9.09 on the $100
> ...


It's not a matter of Uber refusing to pay GST on their share. The ATO says we must pay GST on the full fare because we provide the service, and that Uber doesn't need to pay GST. Current arrangements are a result of how the ATO currently views things.

If Uber started paying GST on their share, they'd simply increase their commission by 10%. So the figures would be:

You get $78.00
Uber gets $22.00
GST on the full fare is $9.09
GST on Uber fee is $2.00
Net GST is $7.09
You keep $70.91.

Notice that the amount that you keep is exactly the same as it was before:

$80 - $9.09 = $78 - $7.09 = $70.91.

If you were paying Uber's GST, you would be paying:

$100 / 11 + $20 / 11 = $10.91

and not the $9.09 that you currently do.


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## Jack Malarkey (Jan 11, 2016)

yogi bear said:


> The tax office wrote me a detailed letter telling me to pay the gst on ubers commission, giving me an effectice GST rate of 12.5%


The way I see it is that there isn't really a problem with GST being payable on total fares without reduction for Uber's commission. This is because GST is a tax on turnover without direct reduction for expenses.

Expenses such as commission are relevant for a profits-based tax such as income tax but not a turnover tax such as GST.

A credit is allowed as an input tax credit for any GST paid on those expenses. Uber doesn't currently impose GST on its drivers for the commission they pay as Uber is a foreign entity. There is therefore no relevant input tax credit for drivers to claim on the commission.

I do think, however, that it's inappropriate for Uber to charge its commission on the GST component of the fare passengers pay.


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## Bandy (Jul 26, 2016)

Thing said:


> Uber is so crooked....
> 
> If Kalanick swallowed a nail he'd shit out a corkscrew


Love it Thing, lol...


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