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Friday, 30 September 2016

Uber’s Booking Charade

Zelo Street has already noted that drivers using the Uber app while at the wheel need to interact with it to the point that they would be distracted from driving - and so that interaction is breaking the law. And it’s not the only eyebrow-raising practice that the driver and rider matching service is involved in: the process by which Uber accepts bookings and processes payments should also be sounding alarm bells with regulators.
Not that Transport for London (TfL) seem in the past to have been too fussed about asking difficult questions about how Uber does business - so I will. A helpful source has provided a slide presentation illustrating how Uber bookings are taken - and the companies involved. There are, in fact, two companies involved, but why that should be necessary is not explained. And only one of those companies has a licence.

When the pundit opens the Uber app, he or she looks up nearby cars with Uber London Ltd - the company with the TfL operator’s licence. The database of available cars is, however, provided by Uber BV, a Netherlands company which acts as a price comparison site. Confused? You soon will be: after the pundit selects a car and makes a payment, that payment is passed by Uber London Ltd to Uber BV.

So Uber BV, a company registered in the Netherlands, gets paid for acting as a price comparison site. What’s that all about? Well, quite apart from the involvement of a company other than the one holding the private hire licence, this arrangement means the money leaves UK jurisdiction. And if the money leaves UK jurisdiction, it is beyond the reach of any UK body which might have an interest in it.
Who might that be? Oh, I dunno, how about HM Revenue and Customs? Uber has done nothing illegal in moving the money out of the UK, but it has avoided the taxation authorities. As the Guardian reported last year, “Uber is the latest company to risk public anger after paying £22,134 in UK corporation tax last year despite making an £866,000 profit … The online taxi-hailing service was reportedly able to pay such a low sum as it legally transferred profits to its sister company in the Netherlands, where it would be liable for a lower rate of tax”. That is where Uber BV comes in.

Steve McNamara of the LTDA summed it up: “Any four black-cab drivers pay more tax than Uber”. On top of that, Uber has effectively screwed over all those who drive using the UberX platform by tempting them with promises of good incomes, only to then impose a pay cut and make them work longer for less money.

Worse, the presence of Uber BV appears to contravene the private hire licence issue - if the Netherlands company is involved in bookings, it would seem logical that it, too, should have an equivalent licence. Right now, TfL is being petitioned to actually do something about this charade. Maybe the arrival of Sadiq Khan will focus minds.

A questionable booking process, tax avoidance, and all the while, far too little oversight by our free and fearless press. That has to change, and change it will.

8 comments:

Anonymous said...

Let's wait for those fearless operators the Tax Payers Alliance who, no doubt, will be along shortly to condemn organisations from short changing UK plc.

regards
The Professor

Chrissie1943 said...

I really don't understand why our government and HMRC allow these American companies to circumvent the tax laws while interlopers like Uber are driving tax paying taxi drivers off the road. Uber are replacing our iconic taxis and highly qualified drivers with thousands of badly paid, 'self-employed', poorly qualified drivers who rely on us tax-paying citizens for income supplements to survive. We are paying for American entrepreneurs to make millions while our citizens will only enjoy cheap fares until the entrepreneurs have their monopoly. What is wrong with our country?

Anonymous said...

Tim, you may want to consider whether adds trying to persuade people to become Uber drivers should be popping up on your blog - certainly when I access it on my phone. On the other hand you may want to consider that - given that the vast majority of your readers will agree with you whole-heartedly about Uber - you are actually syphoning off some of the revenues referred to above to a much more deserving cause

Tim Fenton said...

@3

The adverts you see are tailored to the person reading - not the blog.

So it's all down to what's in your browsing history.

I have no say in the ads, I'm afraid.

Anonymous said...

My browsing history deletes every time I close my browser, and I have never used - and never would use - Uber!!

Peter McCormack said...

If you see an Uber ad (or an ad for any other company you don't care for), and have the time, make sure you click on it.

Seapake said...

http://www.canlii.org/en/on/onsc/doc/2015/2015onsc3572/2015onsc3572.html?autocompleteStr=Uber%20%20Toronto&autocompletePos=1 This Canadian judgement really raises the question of who is actually accepting the booking, uber denied it was them, (and the judge agreed with that) because that would make them illegal in Canada they said it was solely the driver who accepts the booking which is actually illegal in the UK. What a web of deceit

Anonymous said...

"Uber BV, a Netherlands company which acts as a price comparison site. Confused? You soon will be: after the pundit selects a car and makes a payment, that payment is passed by Uber London Ltd to Uber BV."
The "pundit" doesn't select a car, compare prices or make a payment. They confirm their request, at which point Uber allocates a vehicle. At the end of the journey, Uber's de facto meter charges the fare.