Less Than 2% of Uber Revenue is Taxable by the US

 

Despite not showing big profits yet, Uber is making moves to ensure that it pays next to nothing in taxes if and when it finally does become profitable. It was recently reported that Uber, in a presentation made to investors last fall, had assigned its IP to Bermuda. As a result, less than 2% of its total revenue would be subject to taxes by the Federal government.

 

“Artful Dodger”, Uber CEO Travis Kalanick


uber-ceo

This is a story that was first covered earlier this week by Bloomberg reporter David Kocieniewski, who writes that a new breed of “sharing economy” companies like Uber will, as they eventually move towards profitability, transform huge chunks of the US economy, potentially putting billions of dollars in corporate tax revenue at risk.

In the original article, Kocieniewski writes:

    For years, pharmaceutical and tech companies including Pfizer, Merck, Google, and Apple have slashed their U.S. federal tax bills by using offshore tax havens and shifting profits abroad. Airbnb and Uber are starting to extend this strategy across vast new fields: PricewaterhouseCoopers estimates that sharing-economy businesses generated $15 billion in revenue in 2014 and will take in $335 billion in 2025, growing largely at the expense of companies that pay billions in US taxes.

All of which should come as no surprise to people who’ve looked at Uber as a new technology that’s a bit too good to be true- even if you ignore the thousands of alleged sexual assault complaints against Uber drivers and the company’s somewhat difficult-to-understand insurance coverage policies. But that’s just my take, and I’m usually pretty negative, anyway.

What do you guys think? Is Uber making moves that are technically within the letter of the law to avoid paying taxes something that most people will ignore, or is it just one more reason to question the ethics of the company’s management? Let us know in the comments.

 

Source | Images: Bloomberg, via Boing Boing.





About the Author

I've been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, or chasing my kids around Oak Park, IL.
  • Steve Hanley

    They’re not doing anything every other corporation isn’t doing. I read GM pays 10X more taxes in China than it does in the US. its a scandal and a disgrace, but it’s nothing unusual.

    • It just sucks, man. People need to be called out, Donald-style.

      • Steve Hanley

        People need to wake the F*ck up to how we are all just being made pawns of corporations. Yeah, we need commerce and business needs make a profit, but what we have now is a society that is just being looted by corporations.

        Why people can’t see that is a great mystery to me.

        • Joseph Dubeau

          What can you or anybody do about it?

          • Vote.

          • Joseph Dubeau

            I do and did vote. “Oh yes we can” no, you didn’t.

          • Really? We’ve taken major steps towards universal healthcare, expanded civil rights to millions of Americans who had been denied them for 2 centuries, brought tens of thousands of troops home, and “got” the scariest boogeyman of the last twenty years and that’s “no, you didn’t”? What did you expect to happen, exactly, when you saw the poster?

            Grow up.

          • Joseph Dubeau

            People who voted for Obama have been fed up with him.
            He wouldn’t win election if he ran.
            I guess you support Arctic drilling.

            Get real.

          • So, you’re answer is … what, exactly? You didn’t get your way 100% of the time so f*** any and all real progress the guy made? That’s the reasoning of a pre-schooler.

          • Joseph Dubeau

            “That’s the reasoning of a pre-schooler.”
            those are your statements.
            You don’t have any answers.
            You are just like angry Trump crowd.

          • Maybe!

          • Steve Hanley

            Hear! Hear!

  • Joseph Dubeau

    The government needs to shut this down.
    No health insurance for Uber drivers.
    Uber socializes the costs and privatize the profits.

  • Coach Roschella

    I’m not a tax authority nor did I sleep at a Holiday Inn Express last night. Apparently, if I had slept at HIExpress I could claim to be an expert in something I know very little about.

    I don’t believe Uber, or any other company, should have to pay taxes for money/income made in foreign locations. Likewise, company should pay taxes on income derived from transactions on American soil as a foreign registered company. Like I said, I’m not an expert here…but isn’t that how our tax code works?

    A multi-national company generating income in Europe, Far East, US for example should have be incorporated in a “tax haven”. Bringing money from Europe (all already taxed by European authorities) to the US should NOT bring the ability for the US to tax that money. This last step is important, because I believe currently just bring money into the US makes it taxable…hence this is why is holding money in off-shore account in to avoid US taxes.

    • Steve Hanley

      I think Jo’s point is that Uber is avoiding taxes on income earned in the US.

      • Coach Roschella

        Don’t hate the company. They are doing what a number of companies are doing….maximizing return for investors.

        Understand the implications of taxing the income generated on your soil, weigh the consequences, and fight to change the tax code.

        Also, I’m not sure that is what Jo is stating…I think she wants the Uber to pay US tax on its foreign income. As I read it, that would be the case because the operation headquarters is in the US. Under current US law when moneys made overseas are repatriated that money become taxable in the US.

        Taxed at the source, say France….and then taxed again in the US.

        • Steve Hanley

          I agree. They all do it. Whether that is good for America is a separate conversation.

          BTW, please take a look at Jo’s avatar. A female type person he most definitely is not!

          • Coach Roschella

            inadvertent gender pronoun usage….updated and thanks.

        • The “Don’t hate the player, hate the game!” argument only applies if there isn’t a choice involved in the game-playing. Uber has numerous advantages over traditional taxi models that would make it a success, regardless- and if it can only be successful by dodging taxes then it’s a publicly subsidized company and should be seized and nationalized.

          • Coach Roschella

            Does nationalization also apply to Apple, GM, Ford, Unilever, P&G, etc? Just want to be sure I know where to draw the line, before I cross it.