Company says new levy will make it hard for ride-sharing to compete with car ownership.
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It’s almost hard to believe how much trouble Uber has gotten itself into this year – and it’s not even April!
There is, of course, its systemic sexism problem with employees, exposed by a former female engineer last month. Then there’s Travis Kalanick caught on video berating one of his drivers, resulting in the Uber CEO admitting he needs leadership help.
Speaking of, company president Jim Jones also quit this week over differences in “beliefs and approach to leadership.”
At this point, Uber is looking like the quintessential self-destructing celebrity. All that’s missing is the figurative head-shaving incident and sex-tape leak.
The company’s response to Canada’s federal budget this week doesn’t rank up there in terms of severity with the other ongoing calamities, but it certainly is more par for the course when it comes to Uber currently being unable to do anything right.
With the Liberals moving to apply the Goods and Services Tax to ride-sharing services starting on July 1, the company is none too pleased. Uber says the levy is a “tax on innovation” that will hurt more than a million Canadians who use its service, either as drivers or customers.
Uber Canada regional manager Ian Black wants meaningful consultations on the subject before the tax takes effect.
Where the response goes off the rails is in its suggestion that adding the GST will make Uber less attractive compared to owning a car.
“This tax makes it hard for ride-sharing 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,” the statement says.
Well now, that sounds pretty crazy, doesn’t it?
For one thing, cars are also subject to GST when purchased new. The average price of a new vehicle in Canada, according to analysis firm DesRosiers, is $27,563. GST on that comes to nearly $1,400.
The GST on a typical $20 Uber ride, meanwhile, comes to… a whopping $1.
I’m not exactly a math wizard, but it sure seems like you’d have to take an awful lot of Uber rides to start thinking you might be better off buying a car.
I actually own a car, but also happen to use Uber quite a bit (to my growing shame). I also track all of my expenses and see that I spent exactly $405 on Uber last year, which would translate into about $20 of GST. That means I’d have to pay about 70 years worth of GST on Uber rides to equal the tax on the average new vehicle.
Clearly, we can add dumb math and even dumber political rhetoric to Uber’s list of foul-ups for 2017.