Torontonians will soon have to pay more for their Uber rides.
The popular ride-hailing service has been seemingly exempted from the GST/HST rules since its launch in Toronto, unlike traditional taxi companies.
But Uber and other similar businesses will have to start charging sales tax on their fares starting July 1, according to the recently unveiled federal budget for 2017.
The budget seeks to “level the playing field.” This would mean changing the definition of a taxi business to include ride-sharing services under the Excise Tax Act.
Taxi companies have welcomed the proposed tax on Uber.
“We’ve been suggesting that Uber and its driver should be expected to pay the same amount of taxes as taxi drivers and taxi brokerages do,” Beck taxi operations manager Kristine Hubbard says.
Hubbard says it makes sense for Uber to pay the same tax that every business and service provider has to pay. “It should’ve been the case from the beginning,” she says.
Uber Canada is criticizing the government’s move.
In a statement posted on its website, regional general manager Ian Black says the “tax on innovation” will affect over a million drivers and riders who depend on the service.
He calls for the government to create policies that “make sustainable transportation more affordable, not more expensive.”
But at least one Uber driver isn’t too worried about the tax leading to more pricey rides.
Shakeel, who’s been driving Uber for a few months and didn’t want to give his full name, says even with the tax, it’s still a cheaper and more convenient option than regular cabs.
“Uber’s fare is 40 per cent lower than taxis,” he says. There may be a small uproar in the beginning, but he expects it will be business as usual afterwards.