iTaxi applauds Federal budget call for HST on Private Transportation operations
by John Q. Duffy
Private Transportation companies like Uber X and their drivers may have to start collecting and remitting HST on all rides starting June 1, 2017, if the latest Federal budget proposals are passed.
This news is being welcomed by Toronto’s taxi industry as a positive step in leveling the playing field between PTCs and traditional taxis.
Representatives of the taxi industry are going a step further, asking that Toronto Bylaws be amended to require all taxi and PTC drivers to submit proof of GST/HST registration to the City when licenses are issued or renewed.
In a sparsely attended new conference held the afternoon of March 29th at City Hall, the iTaxiworkers Association welcomed proposed changes to Federal rules covering GST/HST collection and remittance.
Because City Council was meeting at the same time, most Councillors and media were occupied with other Council business.
In the latest Federal budget, Finance Minister Bill Morneau recommends making it mandatory for so-called “ride-sharing” transportation companies to collect and remit the 13 percent tax that taxi operators have been required to collect for years.
“Currently it is not mandatory for “Vehicles for Hire” and the Private Transportation company Uber, to have an HST number,” said iTW president Sajid Mughal.
“We would like to see a blanket policy apply to all vehicles for hire and PTCs, to have an HST number at the time of issuance or renewal of their license.”
The iTW group says this would be “a small measure” towards leveling the competitive field between PTCs and regular taxis.
Mughal also bitterly notes that even though required under Toronto bylaws, the vast majority of cars serving Uber customers do not display identification stickers.
Nor do they operate under the same restrictive rules governing the types of vehicles taxis must obey, he notes.
Mughal said, “Uber came into the Toronto market operating outside the laws of Canada, affirmed by the new 2017 Federal Budget proposal that they be subject to the same taxation as honest business operators. The progressive next step would be to have Bylaw regulation and enforcement that equally hold to account Uber operations, as the existing regulated industry has been held to account for decades.”
Further, he and his organization feel cancelling the City-run driver training school and stopping City-run vehicle mechanical fitness inspections do a tremendous disservice to for-hire-vehicle customers in Toronto.
Mughal said, “The regulation of Uber through Municipal governance at Toronto City Hall is unjust. The ride-sharing Uber Corporation enjoys an unfair advantage in terms of the number of Municipal Bylaws it is subject to, models of cars permissible based on emissions and fuel economy, and the enforcement of the few Bylaws under which it operates.”
He said, “I’m not asking the City to open the drivers’ books (to look at their incomes or for the amount paid in tax). All we are asking is for any taxi or PTC driver to provide a GST/HST number at the time a license is issued or when a license is renewed because taxi drivers have been paying the HST forever.”
He said this number must be submitted to the City for verification, and not just to the dispatching company.
He also says PTC drivers should provide proof of insurance to the City and not just to the PTC they work with.
While MLS is supposed to be auditing these records, Mughal seriously doubts the effectiveness of this kind of verification, noting there have been a number of instances where Uber cars have been in accidents and have not had the legally required insurance. Some insurance companies have flatly cancelled the insurance policies of cars being driven within a PTC operation that have not had the proper insurance.
Mughal says MLS staff has told him there are as many as 27,000 vehicles now registered as operating within the Uber system.
He also says that at least one car rental company has apparently partnered with Uber.
Drivers pay $900 a month to rent a car, but get back $200 a week if they can prove they have served 75 or more Uber calls that week, thereby reducing their rental costs to up to under $200 a month. Taxi News has not independently verified this claim.
The licensed taxi industry has, from the advent of Uber operations in Toronto, complained about spotty, or outright lack of, enforcement against Uber vehicles and drivers allegedly operating outside of the law.
Municipal Licensing and Standards, responsible for enforcing laws governing for-hire-vehicle services, says charges have been and continue to be laid and the cases are working their way slowly through the court system.
Uber is resisting the tax initiative, saying it would increase the cost of fares and have a negative impact on both customers and their business model.
Uber is sending out letters to its customers saying “Recently, the federal government announced a new tax policy that would make it more expensive to get around Toronto. This would drive up the cost for you and over 1 million Canadians who use Uber, by up to 15 percent.”
The undated letter asks customers to “Tell your Member of Parliament (MP) that affordable transportation is important to you and that we need policies that support it.”
Then it provides contact information for the customer’s MP, with a link to individual MPs email addresses.
Apparently there is at least some City Council support for the iTW position.
At the news conference, two City Councillors and taxi operators in attendance questioned the legality of Uber using their customer information in this way, speculating that it may contravene federal Freedom of Information and Privacy legislation.
However, Councillor and Deputy Mayor Denzil Minnan-Wong did attend and said, “I support the initiative. Taxi drivers should pay the HST.”
He said, “If WheelTrans drivers got a 13 percent increase (due to the HST) that needs to be enforced, that needs to be followed.”
Councillor Jim Karygiannis also attended the news conference and commented that like taxi drivers and taxi companies, Uber and other PTCs must, “Pay their fair share of taxes. Everybody must pay their fair share of taxes.”
He also wonders if Uber corporately is “paying the HST on their 25 percent” cut of each ride they serve. “If not, they have to pay their fair share, too.”
In other news, the organization representing beleaguered TTL license holders has joined forces with the iTW to get out their message of dire economic circumstances forced on them by onerous vehicle and other requirements mandated in last year’s reforms.
It is as yet unknown if or when a promised review of last year’s taxi reforms will come before the Licensing and Standards Committee, which is responsible for dealing with the City’s licensing Bylaws.