Uber company has been marketing itself as a rideshare application and not a taxi service. In alignment with this definition, the company doesn’t even recognize Uber drivers as their employees. Instead, the organization calls them contractors. This means that Uber Technologies Inc. is not responsible for covering any expenses or paid holidays. The deal limited itself to the earnings of the contractors out of which 20% went to the company. However, a recent ruling of a Federal Court of Australia found that Uber is actually liable for all the taxes other taxi companies have to pay.
On Friday, UberX lost its controversial business format after the Federal Court of Australia decided that UberX ridesharing is actually a tax service. As a consequence, the company has now to comply with all the laws that regulate such companies, including paying taxes to the state. This is just another one of the legal actions that limited the innovative classification the company built for itself from its beginnings.
Another lawsuit called Uber in 2016 in front of the European Court of Justice. The company defended its business format by claiming it is actually a software producer and not a taxi service. The ridesharing organization experienced another defeat in London, where the court compelled it to acknowledge Uber drivers as employees and not contractors or partners.
As for the recent ruling, it was the result of a 2015 appeal of Uber to the Australian Federal Court against an order released by the Australian Taxation Office, that urged Uber drivers to pay the state 10% of their earnings according to the Goods and Service Tax. This GST tax system is usually applied to all services performed within Australia.
Uber’s defending claim was that UberX didn’t share the same attributes with the ones of any other limousine or taxi service. This is because the cars are not perceived as taxis, as they are the personal property of drivers themselves, their drivers do not wear uniforms, and they don’t take fares off the street. However, the Judge of the case took into account the allegation of one of the driver partners. Brian Coline Fine stated during some of the proceedings that he offered taxi travel when he was using UberX.
Therefore, the Judge used this testimony to show that Uber drivers are engaged in a business format that resembles that which is stipulated in the Goods and Service Tax. Moreover, he denied that Mr. Fine was actually involved in limousine service. At the time, he was driving a Honda Civic, which is not a luxury vehicle. Thus, from now on, Uber has to decide how to apply this Court decision to its over 50,000 drivers.
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