Ride Sharing and Tax

There are an increasing number of taxpayers who have commenced ride-sourcing activities. Some participate on a full-time basis and others on a casual basis. As tax consultants, we can assist these taxpayers by ensuring they comply with all ATO requirements of registrations, reporting and record keeping. Ensure that you give out motor vehicle log books and most importantly explain the way of recording kilometres and motor vehicle expenses correctly. This will give the taxpayer the best claim for their motor vehicle. There are apps available for smartphones for recording business-related expenses which may suit some taxpayers. It is recommended that taxpayers take a photocopy or photo of receipts to avoid the issue of unreadable/faded receipts.

What is ride-sourcing?

It is an ongoing arrangement whereby: A driver makes a car available for public hire, A passenger uses a website or mobile phone app provided by a facilitator to request a ride, The car is used to transport the passenger for payment (a fare) with a view to profit. Exceptions: Non-commercial car-pooling arrangements where passengers contribute petrol money or other arrangements where there is no view to a profit. Car sharing arrangements where multiple users have access to a car which they use to drive themselves from one location to another. Arrangements that use vehicles other than cars-for example motorised tricycles. Arrangements where a car is used only to transport passengers for a specific purpose (for example, a wedding or a funeral), and which is not made available more generally to transport members of the public from one location to another. GST consequences If you provide ride sourcing services, you are providing taxi travel services. Under GST law, if you carry on an enterprise and provide taxi travel services in that enterprise, you are required to be registered for GST regardless of the turnover. Income tax consequences If you provide ride-sourcing services you are likely to be running a business, as you are providing your services: For a commercial reason, With an intention to make a profit, In a regular and repeated manner, In a business-like manner. This is assessable income, even if the ride sourcing business is run on a casual basis to supplement income from another job or business activity.

How does ride sourcing differ from taxis?

Ride sourcing trips differ from taxis in that they: Are not anonymous. Passengers (riders) are provided with a name, photograph, registration number and vehicle model as soon as the ride is accepted on the app. Drivers are supplied with the name and account details of the passenger (rider). Cannot be hailed on the street or from a taxi rank. Do not accept cash payments. Passengers must load credit card details into the facilitators’ app prior to booking a ride. The fare is estimated in advance and accepted or rejected prior to the trip. Does not operate in advance bookings-it is on-demand and ‘ready to ride’.

GOVERNMENT REGULATIONS

State and territory laws regulating transportation of passengers contain specific definitions of the term ‘taxi’. It is possible for a vehicle to be a taxi for GST purposes but not for state and territory regulatory purposes. Different regulations apply in different states. Victoria Taxi, hire car and rideshare services will operate under an aligned set of rules commencing in 2017 with full implementation by 2018: All drivers must be accredited, which includes passing police, medical and driving history checks. The knowledge test is being removed. All Network Service Providers must be accredited and will be responsible for safety and service delivery. Flexible fares. Simpler vehicle licensing requirements. A $1 levy on all commercial passenger vehicle trips, which is down from $2 when first proposed. This will replace annual licence fees. The levy will fund an assistance package for the existing taxi and hire car industry. Queensland Changes to the personalised transport industry commenced in 2016: Since 5 September 2016 ride-booking services can operate legally across Queensland. Ride booking services cannot collect customers from a rank or be hailed from the street (this is exclusive to taxis). The Queensland Government requires all ride-sharing drivers to hold a current Booked Hire Driver Authorisation (DA). All ride booking vehicles must be registered, roadworthy and have Compulsory Third Party Insurance. They must also have a current Safety Certificate issued by an approved inspection centre. Taxis remain the sole providers of Taxis Subsidy Scheme services. All drivers are required to undergo criminal, driving history and medical checks before being authorised. Since 1 November 2016 drivers must provide passengers with an itemised receipt of the journey if requested. Ride booking vehicles must have a sign on the rear of the vehicle. The Government has established an Industry Adjustment Assistance Package to assist the existing taxi and limousine service licence industry. From 1 October 2017 the Government has ruled on recommendations that approved security cameras are required in all personalised transport vehicles. Also under consideration was whether all personalised transport operators could provide Taxi Subsidy Scheme services. This remains unchanged as a taxi meter is required for this scheme. In 2017 an annual Booked Hire licence was introduced which will cover ride booking services. Ride booking vehicles will be required to obtain an annual Certificate of Inspection. Tasmania From 7 November 2016 there are conditions to be adhered to for ride sharing activities: Requirement to have an Ancillary Certificate type PPV-Other and ‘X Condition’ to operate a ride-source vehicle. Requirement to have annual vehicle inspection. A.C.T. From 1st August 2016 there are regulatory requirements for ride-share services: Requirement to upgrade drivers licence to include a ‘D’ condition. Requirement to have a roadworthy certificate and upgrade the vehicles registration to include the appropriate rideshare compulsory third-party insurance premiums. Requirement to have rideshare driver accreditation and a rideshare vehicle licence. Requirement to have a Working with Vulnerable People registration. From 1 November 2016 all ride sharing booking services are required to be accredited to operate within the ACT. New South Wales The N.S.W. government has commenced changes to the personalised transport industry: All Uber drivers are required to hold a Passenger Transport Licence. It is a requirement to display an Uber sticker on the driver’s side of the rear windscreen when the driver is ‘online’ and driving with the Uber app. A $1 levy will be charged to passengers using taxis, hire cars and ride-sharing services from 1 February 2018. This is to assist in funding a compensation package for the taxi industry. The levy will apply to the most populated areas of NSW. South Australia The South Australian government has commenced changes to the personalised transport industry: Proposed $1 levy to be charged to passengers using taxis, hire cars and ride-sharing services. This is to assist in funding a compensation package for the taxi industry. Proposed halving of the maximum EFTPOS and credit card fee for passengers from 10% to 5%. Western Australia The Western Australian government has commenced changes to the personalised transport industry: At the time of writing the Western Australian government has proposed a 10% levy on taxi and ride-sharing trips. It is proposed the levy would be in place for 4 years and the proceeds used to fund a voluntary scheme to buy back taxi plates. The Western Australian government has proposed changes to legislation regarding the on-demand transport industry. This includes an On-Demand Driver authorisation. Please refer to the Department of Transport in each state for further information. The Northern Territory has not legalised ride sourcing services at this time.