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back to article Competition watchdog dismisses plans by TfL to uber-regulate Uber

The UK's Competition and Markets Authority (CMA) today dismissed proposals by Transport for London to introduce new regulation to tighten its grip over private hire companies such as Uber. Responding to proposals suggested last month by the regional transport body, the spending watchdog said TfL should take care to avoid …

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  1. Jason Hindle

    Predatory pricing?

    "He also questioned whether the low prices offered by some apps are kept artificially low to drive out competition — a form of predatory pricing."

    As in the special fixed prices available from the taxi ranks at Heathrow?

    9 1 Reply
    1. hardboiledphil
      Reply Icon

      Re: Predatory pricing?

      >> "He also questioned whether the low prices offered by some apps are kept artificially low to drive out competition — a form of predatory pricing." <<

      But on the flip side if the drivers are able to move companies easily then the app charging the low prices is going to struggle to get drivers. Supply and demand works on the driver side as well as the customer side as long as drivers can leave with no/minimal penalty

      5 1 Reply
    2. jonathanb Silver badge
      Reply Icon

      Re: Predatory pricing?

      There are loads of private hire operators that specialise in Airport transfers. Typically they advertise a fixed charge from the Airport to a particular post-code area and you book them just after you book your flight ticket.

      0 0 Reply
  2. Your alien overlord - fear me

    TfL should just say the company must accept payment in the UK. Then Uber (and others) would have to pay tax the same as other taxi companies. It's not anti-competitive so CMA can go away.

    7 1 Reply
    1. Roland6 Silver badge
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      Re: TfL should just say the company must accept payment in the UK.

      Won't make much difference, just look at Starbucks et al...

      0 0 Reply
  3. Ptol

    Difference between a taxi and a private hire?

    The Uber app on the phone represent is both an efficient way to prebook a private hire, and an effective use of technology to flag down a nearby taxi!

    1 1 Reply
  4. cs94njw

    "Uber enjoys a significant price advantage by not paying UK corporation tax, because jobs are booked through the Netherlands. Despite Uber being a $50bn (£32bn) company, its drivers earn far less than the London living wage; in some cases, they earn a lot less than the minimum wage."

    For God's sake! Stop the Tax Credit cut, and make all these companies pay corporation tax!

    FFS!

    2 5 Reply
    1. Valerion
      Reply Icon

      $50bn is its market valuation, not its turnover. I suspect its profit is fairly small.

      4 0 Reply
      1. John Robson Silver badge
        Reply Icon

        And presumably it's not a UK only valuation...

        But the tax system is, in general, a complete shambles

        6 0 Reply
  5. Anonymous Coward
    Anonymous Coward

    "Uber enjoys a significant price advantage by not paying UK corporation tax, because jobs are booked through the Netherlands"

    Okay. I'm a little confused by this. Corporation tax in the Netherlands is 25% which is higher than the UK.

    0 0 Reply
    1. graeme leggett Silver badge
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      Perhaps it comes down to differences in VAT rates on transport and a bit of accounting switcheroo before the corporation tax is applied?

      0 0 Reply
      1. jonathanb Silver badge
        Reply Icon

        Nothing to do with VAT. The place of supply for VAT purposes is the country where the journey starts. If you take a taxi from England to France, you pay VAT in the UK. On the return trip you pay VAT in France. The taxi operator must be registered for VAT in both England and France if it does that, regardless of where it is based for other purposes.

        Having said that, I believe Über claim that your contract is directly with the driver, and as the driver almost certainly earns less than £82,000 per year, they don't have to register for VAT. Most minicab and taxi operators do this, it isn't unique to Über.

        What happens is that the Dutch company pays a royalty to a company in Ireland. The Irish company pays a royalty to another Irish company that is tax-resident in an offshore tax haven such as Bermuda. That way you get the money into an offshore tax having while paying very little tax. If a UK company paid the royalty directly to a tax haven, they would have to deduct a withholding tax of 20% from the payment.

        0 0 Reply
        1. Roland6 Silver badge
          Reply Icon

          Re: I believe Über claim that your contract is directly with the driver

          Yes, that is what Uber are trying to assert... however their standard receipt says otherwise...

          See http://forums.overclockers.co.uk/showthread.php?t=18604566

          Also I note from the sample receipt the absence of VAT, which given Uber's aspirations and rate of growth, is strange, so I would expect (and hope) HMRC have slapped Uber with a demand for unpaid VAT dating from whenever they set up their UK operation...

          1 0 Reply
          1. jonathanb Silver badge
            Reply Icon

            Re: I believe Über claim that your contract is directly with the driver

            Yes, "Invoice issued by Über BV". They have a problem. The journey starts in London, therefore it is subject to UK VAT regardless of who does it. If Über doesn't have a permanent establishment in the UK, then there is no registration threshold, so they have to start charging VAT from the first £1 of UK income. If they do have a permanent establishment, they get the £82k registration threshold, but they have to pay UK Corporation Tax on their profits.

            2 0 Reply
    2. Velv
      Reply Icon
      Headmaster

      The Dutch company will be licensing the software from somewhere else (possibly Ireland or Luxembourg). The annual license fee is €18.72 more than the total fares charged.

      1 0 Reply
  6. James R Grinter

    Are they agreeing the fare before the journey begins

    Or are they still making it up as they (the driver) go along?

    I wouldn't use any other mini-cab if I didn't know how much it was going to cost before I started the journey. Why would I want to use Uber?

    1 0 Reply
    1. Roland6 Silver badge
      Reply Icon

      Re: Are they agreeing the fare before the journey begins

      Or are they still making it up as they (the driver) go along?

      Good question, given the evidence of hacking of Uber user accounts:

      http://www.bbc.co.uk/news/magazine-32900600

      1 0 Reply
  7. Anonymous Coward
    Anonymous Coward

    Rules are so Dickensian

    I'm going to start a private bus company.

    - On board bar

    - Snacks

    - Gambling

    Regulations you say?

    I'll just follow Uber's lead and ignore them.

    1 1 Reply
    1. Anonymous C0ward
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      Re: Rules are so Dickensian

      Blackjack and hookers?

      0 0 Reply
      1. Anonymous Coward
        Reply Icon
        Anonymous Coward

        Re: Rules are so Dickensian

        Yes, but that would be the Premium Service (we use blacked out buses)

        0 0 Reply

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