Thursday 5 December 2019

Uber faces $650m US tax bill for its drivers

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Stock photo

UBER Technologies may owe the US state of New Jersey around $650m (€590m) in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors.

Uber and subsidiary Rasier were assessed to owe $523m in past-due taxes over the last four years, the New Jersey Department of Labour said in a pair of letters to the companies.

The rideshare businesses also are on the hook for as much as $119m in interest and penalties on the unpaid amounts, according to other department documents.

New Jersey has been chasing Uber for unpaid employment taxes for at least four years, according to the documents, which Bloomberg Law obtained through an open public records request.

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The state's determination is limited to unemployment and disability insurance, but it could also mean that Uber is required to pay drivers minimum wages and overtime under state law.

Uber's costs per driver, and those of rideshare competitor Lyft, could jump by more than 20pc if they are forced to reclassify their workers as employees.

The notices mark the latest attack on the companies' business model, which treats drivers as self-employed entrepreneurs.

Bloomberg

Irish Independent

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