07 Jul Is multi billion pound Uber using UK tax credits to subsidise wages bill?
Is multi billion pound Uber using UK tax credits to subsidise wages bill?
Software and transport company facing calls to reveal the number of its drivers receiving extra money to make ends meet
Uber is facing calls to reveal how many of their drivers are receiving tax credits as their push into regional towns and cities is threatening the existence of small businesses.
Matthew Kendall, CEO of zoom.taxi, a software company helping traditional companies compete in the market, said he thought “customers should know if Uber’s drivers are being paid enough to live on or if this multi billion pound company is being essentially subsidised by the tax payer.”
The company developed its software in response to requests from companies in the market who were at risk of going under because of the spread of Uber.
“Uber is valued at $65bn yet we hear regular stories about Uber drivers not getting the minimum wage, having no employment rights to speak of because they are contractors and being subject to having their wages cut at the send of a text yet this company is pushing long standing small businesses out of the market,” said Mr Kendall.
“SMEs are the drivers of growth in the UK, they provide 60 per cent of all private employment in the UK and are 99 per cent of businesses but in this industry that positive level of market competition is under threat – using tax payers’ money to make it less fair and less competitive.”
Mr Kendall also challenged Uber to reveal how much tax they pay “so their customers can see if they are using a company which is just taking from this country through wage compression and imperfect information or one which does pay its way in corporation and income tax.
“This is not the fault of the drivers; they need to have enough to live on and that is why support is available.
“What we are questioning is if Uber are not paying their drivers sufficient money so they need to receive tax credits whilst the people at the top seem to be making a fortune.
“To many people it looks like predatory pricing and exploitation of the UK tax payer by big business at the expense of the little guy.”
According to a report by the Department of Transport, in 2015 there were 242,000 licensed vehicles (just under a third of which were taxis, the rest private hire), 297,600 licensed drivers and 12,800 licensed operators.
Mr Kendall says he expects these figures to have “changed significantly” when the report is next published this autumn.
“We are at a cross roads now in the industry where unless action is taken a multinational company with friends in high places can bankrupt existing companies whilst essentially – although entirely legally – using tax subsidies as it bulldozes through the market.
“I don’t want to see the market become a virtual monopoly because that is bad for everyone except the people at the top of Uber and I certainly don’t want hard working SMEs to be put out of business whilst the money they pay to the exchequer is given to their rivals, even if it is legitimate. I don’t believe it is in the spirit of what the welfare state was set up for.
“In today’s world people are calling for compassionate capitalism: we can see this with fair trade, the living wage and calls for transparency in taxation. If this is the case then shouldn’t people be doing the same with Uber?”