By Associated Press
Canada is targeting ride-sharing providers such as Uber by levying taxes on the companies for the first time.
The government said it is leveling the playing field for Canadian taxi services competing with ride-sharing providers by making them pay taxes. It will be the first time in Canada such companies will be charged the federal Goods and Services Tax in line with cab companies. Companies such as Uber would be forced to collect taxes on every ride, just as Canadian taxi operators do so.
Uber spokeswoman Susie Heath said Thursday that the tax impacts riders and drivers and that taxing ride-sharing companies does not help taxis compete on pricing since Uber would remain a significantly more affordable option.
“This is not a tax on Uber and we continue to pay all applicable taxes on our services, as well as significant licensing fees to cities,” said Heath. “This tax makes it harder for ridesharing to be price competitive with personal car ownership. It is deterring innovation and the possibilities that come with more shared rides that can make cities less congested and polluted.”
Canadian Prime Minister Justin Trudeau’s Liberal government made the tax announcement this week when delivering its budget.
Finance Minister Bill Morneau said it’s important to have a tax system that’s fair and less complex, adding that the government already taxes taxi companies so taxing Uber “is consistent with what Canadians expect.”
Marc Way, president of the Canadian Taxi, said he supports the government’s decision to tax Uber fares.
“This is a great move towards leveling the playing field,” said Way.
The budget statement estimates the change will raise CA$3 million (US$2.5 million) in new revenue in the 2017 budget year, rising to CA$5 million (US$3.7 million) in a few years.
The tax could translate into higher fares for Uber customers in Canada, and would be the latest blow to the $70-billion company.
Earlier this week, Uber said it vows to become a more humane company following a wave of ugly developments.
Uber CEO Travis Kalanick has been skewered after berating an Uber driver last month for complaining about the company’s pay scale and for creating a boorish culture that culminated in a former female engineer alleging management looked the other way after she and other women reported being propositioned by their male colleagues.
Last month, Kalanick hired former U.S. Attorney General Eric Holder to lead an investigation into the sexual harassment charges leveled by the former engineer, Susan Fowler.