Uber's $81m tax bill wiped as it doesn't 'pay' drivers

The San Francisco-based company's local subsidiary, Uber Australia, appealed to overturn six payroll tax assessments made by the NSW Chief Commissioner of State Revenue for the years 2015 to 2020 totalling more than $81.5 million.

Uber argued its transport services were provided directly by drivers to riders and existed under contracts between those parties, which were agreed to when users sign up to its app.

But in a decision with potential ramifications for taxes levied on other peer-to-peer services, NSW Supreme Court Justice David Hammerschlag on Friday ruled that Uber did not pay drivers a wage and dismissed the assessments and interest sought by state officials.

Uber acted as a "payment collection agent", distributing money paid by riders to drivers that could not be considered a wage, he found.

"It is not Uber who pays the driver," Justice Hammerschlag said in his ruling.

"The rider does that. What Uber pays the driver is in relation to the payment Uber has received, not in relation to the work itself."

Lawyers for the chief commissioner accepted drivers provided a transport service for riders, but they argued drivers also did the same for Uber.

In response, Uber argued that its system existed only as a marketplace through which drivers and riders could identify and "contract" with one another.

Justice Hammerschlag noted there were difficulties applying the relevant laws as they were devised long before services like Uber existed.

The parties can make applications for costs.

Australian Associated Press