From cash-in-hand to traceable, electronic payments

Posted by Betsy Masiello, Director of Policy and Communications

All around the world, Uber is an engine of economic activity. Every day hundreds of thousands of drivers use our technology to get millions of passengers from A to B. The lion’s share of each fare goes directly to these partner-drivers and stays local.

What’s more, every fare — even the cash fares collected in, for example, India — is electronically recorded. This means it is transparent and traceable in a sector where much of the money generated has historically been cash-in-hand, and so “off the books”.

With Uber, drivers control where, when and for how long they work. In some cities such as Stockholm the majority drive for less than 10 hours a week. By comparison, in London the average is 26 hours. And because they are self-employed, they are responsible for paying their own taxes. In fact it’s the only practical way to do it because individuals — not Uber — know their costs (which vary depending on car size and fuel type, for example); their income from other sources; and the tax exemptions that apply to them.

Of course filing a tax return in many countries is a complicated, time-consuming headache. But our technology can help make that painful process easier because earnings that are electronically tracked are easier to declare. Uber partners have their own online dashboard, which shows all the fares that they have earned while using the Uber app. And every seven days, they get an email update setting out their earnings for the week.

In addition, we’re experimenting with different ways to make things even simpler in different countries. For example:

• Uber sends individual partner-drivers in the U.S. an annual tax summary, listing their fares as well as fees (for example tolls and airport fees) and taxes that might be deductible;
• In most EU markets, we give each partner-driver clear and comprehensive information about the tax framework that may apply to them because they use Uber; and
• We have partnerships with local tax experts — such as H&R Block and Intuit in the U.S and Crunch in the UK — who drivers can turn to for advice.

But we’re most excited about a partnership in Estonia, which is well-known for having one of the most “customer”-friendly tax filing systems in the world. Today, every Estonian citizen can log into an online tax portal where their personal information — including income, VAT registration and other data — is already filled out. All they need to do is check it’s accurate and then click to submit their return. The result: 40 percent of taxpayers submit their return with one click, in under one minute.

Uber’s partnership with the Estonian Tax and Customs Board (TCB), which we announced in September, is designed to explore whether it would be possible to build a new digital platform that could easily and securely work with Uber’s systems. If we could make this work — and it is still early days — then individuals could opt-into the system and Uber would send their fare and other information directly to the TCB, for inclusion into its tax database. The result: they would be able to declare the income they earn using the app at the push of a button.

Smartphone technology has transformed the way we get around town. Passengers can now push a button and get a ride within minutes — creating new, flexible work opportunities for millions of people globally in the process. And technology can also help ensure that it’s as easy for them to report this new source of income.