Uber and Lyft avoiding almost $135M in taxes | Unions Yeah!

Uber and Lyft avoiding almost $135M in taxes

"Companies like Uber and Lyft shouldn't be allowed to get a free ride when it comes to paying their fair share of taxes." — Larry Brown, NUPGE President

Ottawa (07 July 2021) — Uber and Lyft avoid paying around $135 million per year in Canadian taxes, including around $81 million in avoided EI and CPP payroll taxes, and up to $54 million in avoided corporate taxes, according to a new report, Uber-low taxes Lyft ride-sharing revenue, by Canadians for Tax Fairness (C4TF).

"Companies like Uber and Lyft shouldn't be allowed to get a free ride when it comes to paying their fair share of taxes," said Larry Brown, President of the National Union of Public and General Employees (NUPGE). "Every dollar they avoid paying is one less that goes to public services and programs meant for Canadians. We thank C4TF for their work in exposing this shell game."

Canadian government must ensure companies comply with taxes

The report argues that since these companies claim they operate digital marketplaces, rather than transportation services, the federal government should ensure that Uber and Lyft are subject to its planned 3% digital services tax (DST), which would generate about $60 million annually.

Uber and Lyft depend on public infrastructure. By applying the DST to their revenue, the government would ensure they contribute to the cost of that infrastructure,” said economist Dr. D.T. Cochrane, author of the report.

Thecompanies together also avoid paying around $217 million, by placing the responsibility for collecting these taxes onto their drivers.

Uber and Lyft should collect the full fare, including sales tax,” said Dr. Cochrane. “There is no reason they cannot remit the tax to CRA instead of placing the burden on drivers."

While the DST will ensure that Uber and Lyft begin paying some tax, C4TF advocates the classification of ride-sharing drivers as employees. This will make both companies responsible for payroll taxes, provide greater protection for drivers, and ensure proper regulation of Uber and Lyft as transportation companies.