Uber Fares Set to Increase in Mississauga and Beyond
If you're a regular Uber or ride-sharing service user, we have some bad news for you (but it was news that you probably saw coming, considering how many cities have moved to formally legalize the popular but controversial taxi-esque service).
The federal government has decreed, via its 2017 budget, that all ride-sharing services (so Uber and other services with similar business models) must register for GST/HST and charge tax on their fares.
The move isn't terribly unexpected, as it will help level the playing field between taxis and Ubers. All taxi operators are required to register for GST/HST and charge tax on their fares, so ride-sharing companies will now have to abide by the same rules. Some ride-sharing companies have been able to avoid registering and charging for the same taxes because they didn't meet the definition of a taxi business (they acted as tech companies rather than transportation ones). In many cases, Uber fares were not regulated by the province or municipality.
While the increase won't be enormous, they will shave off some of the advantage Uber had over traditional cab companies, as fares will be a little more even.
The federal government will also benefit from a little extra tax revenue.
"Budget 2017 proposes to amend the definition of a taxi business to require providers of ride-sharing services to register for the GST/HST and charge tax on their fares in the same manner as taxi operators," the budget reads. "In this regard, it is proposed that the GST/HST definition of a taxi business be amended to include persons engaged in a business of transporting passengers for fares by motor vehicle within a municipality and its environs where the transportation is arranged for or coordinated through an electronic platform or system, such as a mobile application or website."
So, it looks like you'll be paying a little more for your Uber. While that's disappointing for consumers, sales taxes are part and parcel of the cost of doing/using business in Canada.