Uber Canada’s ride hailing and food delivery business is set to relocate from the Netherlands to Canada from July 1. This is the culmination of a transfer process that started in 2018. This change will put into effect sales taxes that will go to the government.
Uber has confirmed that this will not change fees applied to most restaurants, drivers and couriers. The fees will however be subject to Federal Goods and Services Tax (GST), Harmonized Sales Tax (HST), and Provincial Sales Tax. Affected restaurants, drivers and couriers will be able to claim tax credits on this. Subscribers to the company’s Eats Pass program may also see sales tax added.
The relocation idea came up in 2017 after an Uber Eats driver from Ontario, David Heller, filed a lawsuit against the company. Heller intended to have Uber compelled to recognize drivers as employees and provide them with commiserate benefits including minimum wage and vacation pay as per the Employment Standards Act. However, Uber had an arbitration clause in its contract that would have required Heller to travel to the Netherlands and arbitrate under Dutch law. This would have caused him to incur administrative fees as high as $14,500.
The San-Francisco headquartered company has faced similar challenges in other countries. In February 2021, the UK Supreme Court upheld a ruling that drivers are indeed workers and entitled to minimum wage, paid vacation and other legal protections. Heller’s case reached the Supreme Court of Canada that ruled in 2020 that Uber drivers could pursue their claim that they are employees and not have to subject themselves to arbitration as the ride hailing service had argued. This has opened the door to a $400 million class-action lawsuit that is seeking certification.
Now, Uber has amended its policies to allow arbitration to be undertaken in the province or territory that a driver resides. Legal experts however note that new contracts request drivers to agree not to pursue class or collective action against the company. Rather they should opt for mediation or individual case handling. Though drivers may opt out of the clause, this is indicated towards the end of lengthy legal paperwork, making it easy for drivers to miss it and not to realize what they are committing to.
Drivers are being advised to carefully go through contracts before signing on. As for the new tax changes that will result from the move to Canada, Uber will be offering support lines and resources to help those needing clarification.