In late 2018, Postmedia reported Andrew Wilkinson’s lament about the Horgan Government “creating unnecessary complications” for ride hailing providers.
In 16 years, Liberals demonstrated they are OK with “cumbersome government-run bureaucracies” that collect income, sales and other taxes from citizens. But they want easier treatment of foreign corporations that cause increased traffic congestion.
According to Bloomberg, these transportation network companies facilitate tax avoidance as well. Yet, their revenue generation depends on use of bridges and roads and traffic management funded by taxpayers.
People associated with Uber and Lyft have taken advantage of measures designed for small business to partially or totally wipe out tax bills. As it is with many such tax arrangements, the vast majority of small businesses are ineligible for these profitable breaks:
Early investors and employees at Uber Technologies Inc., Lyft Inc., and other tech companies are getting a double reward this year: a wave of initial public offerings that puts billions of dollars in their pockets, and a quirk in the law that means some of that money will be tax-free…
“There is no evidence that these sorts of breaks do anything to help the economy in the long run,” says Steve Wamhoff, director of federal tax policy at the left-leaning Institute on Taxation and Economic Policy. “Even in the short run, they are likely to reward investments that would have happened anyway.”
In another story, Bloomberg reports:
Uber Technologies Inc., responding to a European crackdown on offshore tax havens, created a $6.1 billion Dutch tax deduction that will help the company reduce a chunk of its global tax bill for years to come...
“It’s safe to say that Uber will not be paying any taxes for the foreseeable future,” said Robert Willens, an independent tax and accounting expert in New York.
I understand the desire of consumers for improved passenger vehicle service but wonder why the obvious solution is eliminated. That is to greatly increase the number of taxi licenses and ensure free competition in the marketplace.
After banking large contributions from taxi owners while governing, BC Liberals declined to change provincial rules to allow ride hailing. They also failed to ensure adequate expansion of fleets. Decades of government protection resulted in the value of a Vancouver taxi license being worth up to $1 million.
Now in opposition, Wilkinson’s Liberals, supported by BC Greens, are keen to open the market to Uber and Lyft. In my view, the non-governing parties are mistaken.
In most cases, facilitating the gig economy is not good public policy. Opening doors to Uber and Lyft means traffic congestion will worsen, transit use will lessen, large sums will flow to overseas tax havens, and government revenues will reduce.