The disconnect between the revenue and profit declared in the UK by driver and rider matching service Uber is something that Zelo Street has covered recently - at least, the figures declared for its operation in London. From this, it was clear that tax avoidance on a significant scale was going on, with much of the revenue, and all of the VAT, either not being paid, or being paid elsewhere. So what of the rest of the country?
Uber has some sort of presence in around 70 towns and cities across the UK. These come under the aegis of a company called Uber Britannia Ltd., which has recently made its accounts available. These show so little revenue that it is clear someone is having a laugh with the authorities. Worse, those figures suggest Uber cannot possibly be maintaining an office in many of those towns and cities where it now operates.
How so? Consider the numbers for 2016: revenue has increased from just over £376,000 to over £1,021,100. After administration expenses of just over £941,000, that leaves a paltry £80,000 in operating profit before tax. And Uber Britannia is paying a mere £13,212 in Corporation Tax. This company is operating in around 70 towns and cities, and has around 10,000 drivers on its books, yet its profits are no more than £80,000.
Averaged out, it means a typical Uber operation outside London is making no more than just over £1,000 in profit. But it’s when the administration costs are broken down that we see the real mickey-taking being done here. Those total just over £941,000 - now divide that up between those 70 operations and you get little more than £13,000 each. A town or city can run its Uber operation for just over £13,000 - for a whole year?
Where is the office located that takes the bookings and then farms them out to drivers? For just over £13,000 a year, there isn’t one. But you know why that might be - the app does not need there to be an office. That, as Uber’s cheerleaders out there on the right will happily tell you, is so 20th Century. The inconvenient fact, that it’s part of the rules, does not, for Uber, seem to matter. For their mindset, the end justifies the means.
Where is all the revenue going that those 10,000 drivers generate? But you know the answer to that one as well. Either they’re getting not unadjacent to stuff all, or they aren’t getting it via Uber Britannia. If that gross revenue amount of £1,021,000 represents the 20% cut from 10,000 drivers, those drivers are averaging no more than £400 each. They would have to make sixty to eighty times that just to stay afloat.
As in London, most of the drivers’ income is not appearing on a UK Uber balance sheet. It’s being channelled through Uber BV, a company based in the Netherlands, which enables Uber to be, as the spin goes, more tax efficient. So while all those black cab drivers shell out their taxes, Uber ponies up no more in profit for 70 town and city operations than that gathered from a dozen proper taxis.
The bending of the rules beyond their limit of elasticity by Uber is not confined to London. And they expect TfL to just wave them back into the capital because they’re cheap and popular? Someone here is having a laugh. And that’s not good enough.