London’s black-cab drivers are considering court action to try to revoke Uber’s licence to operate in the city, citing the fact that the ride-hailing app firm pays no corporation tax in the UK.
It emerged last October that Uber paid just £22,134 in UK corporation tax in the most recent financial year, despite making an £866,000 profit. The tax paid related to amounts deferred from previous years when Uber’s UK operation made a loss.
“Any four black-cab drivers pay more tax than Uber,” said Steve McNamara, the general secretary of the Licensed Taxi Drivers Association (LTDA). “We’re looking at a judicial review of Uber’s original licence [to operate in London]. It seems to us that Uber is not fit and proper. Uber is a worldwide conglomerate that has ignored regulators in other parts of the world. How can it be fit and proper in London?”
He said it is immoral that Uber does not pay UK corporation tax. “Even Steve Hilton [David Cameron’s former adviser] wants to put a spotlight on people within Downing Street. How can it be right that these companies get away without paying tax?”
San Franciso-based Uber has raised about $10bn (£7bn) from financing rounds but is not yet turning an overall profit as it seeks to expand in territories around the world. The company says it is at a very different stage to a company like Google, given it is still making heavy losses overall.
An Uber spokesperson said: “The comparisons being made with other companies are misplaced. They are profitable and have been for years. Uber is younger and still investing heavily.
“We make a loss and corporation taxes are paid on profits not revenues. In addition the vast majority of the revenue generated via our technology stays with our driver-partners in the local economy. When it comes to comparisons with taxis unlike black cabs we don’t take cash so all payments to drivers are traceable by the tax authorities.”
John Christensen, the co-founder of the Tax Justice Network, said there could be some profit-shifting in the case of Uber that has reduced the group’s UK profits.
The firm was able to pay such a low sum partly because it legally transfers profits generated within the UK to its sister company in the Netherlands, where it would be liable for a lower rate of tax.
Black-cab drivers in London last year conducted a campaign aimed at highlighting their struggle with Uber. Taxis and billboards across the capital were plastered with posters claiming that Uber does not pay tax in the UK.
The posters depicted Uber’s senior vice-president of policy and strategy, Rachel Whetstone (who is married to Hilton), and Cameron, with whom she is friends, beside a picture of George Osborne.
The LTDA said the campaign was to “highlight what we are up against”. It has a fighting fund of £1m to fund any legal action. It is working on the potential action with in-house lawyers but is considering appointing a City law firm.