If someone had mentioned the word ‘uber’ to you over ten years ago, then, unless you were German, you would wonder what they were talking about. This German word means ‘over’ and is now a well-established business throughout a good part of the world. Uber set out as a share driving system with the passengers sharing the journey’s price to pay a private driver. The business itself started in San Francisco in March 2009 and is how we associate with it today. The Uber business is in direct competition with the taxicab industry. The taxi was fitted with a taximeter to charge for your journey. Uber, on the other hand, has a fixed price for your trip, regardless of what route they take.
Incidentally, the ‘cab’ industry, before cars, was a horse-drawn carriage such as the hansom (named after its founder, American Joseph Hansom back in 1834) or brougham (named after the British statesman Lord Brougham back in 1838-39). The word taxi comes from the Ancient Greek word meaning payment, while the word cab comes from the French word cabriolet which was to mean a horse drawn carriage.
The Uber service today is quite simple. Uber utilises an app-based payment system whereby you use their app to book your service and pay via the app with your credit card. The app too, keeps a history of your transactions. This workflow situation demonstrates efficiency, especially for those in business. Hence, a tax agent can utilise this system to substantiate tax-deductible expenses for clients.
The Uber system offers security because apps use encryption technology to protect your credit card details. Uber’s payment system fits in well with the COVID pandemic problem too. This means that rather than exchange cash from one person to another, which may contain germs, the Uber app system is contactless, hence, reducing the spread of any disease. With COVID too, the trend has seen an increase use in credit card compared to cash. On top of this, many merchants have declared that they prefer card to cash. Again, this is a direct result of COVID.
Another security aspect is that people generally do not need to carry large amounts of cash with them. Prior COVID and Uber, most people would catch a taxi and pay cash. The taxi-driver was also at risk of hanging onto this cash throughout their shift; more dangerous at night.
Uber tax returns can be complex and require knowledge , you have to comply with all regulations imposed upon you . If you need help with your Uber tax return, other tax obligations or plan to provide Uber services and not sure what to do , please book an appointment with Era Tax today .