Three months ago, the Bangladesh Road Transport Authority (BRTA) formed a special committee to chalk out a guideline for making Uber service legal in Bangladesh. Nothing has been done on it yet.The latest meeting of the BRTA special committee was held on Sunday. It ended without any result.
An official present in the meeting told The Independent that the transport regulator is completely befuddled about what to do.
Confusion arose after the BRTA could not find a way to formulate a taxation policy for the global taxi-hailing app that started operations in Dhaka in November 22 last year. The BRTA’s special committee on Uber planned to seek help from the National Board of Revenue (NBR) to fix a taxation guideline. But the NBR is yet to send officials to the transport regulator for that purpose.
BRTA direcrtor (enforcement) Nazmul Ahsan Mazumder, who is head of the special committee, told The Independent that they feel Uber is not “helping them enough”. The committee apparently asked Uber to provide them with the number of cars using the service, but the company allegedly did not do so.
The Independent also sent several inquiries to Ruchita Tomar, head of communication of Uber India that looks after Uber’s South Asia operations. But she has not replied yet.
Mazumder also pointed out that Uber increased its fare within two months of starting operations in Bangladesh and the BRTA did not have a say about that increase. “If a vehicle used for private commercial services is to increase its fare, it must get an approval in that regard from the transport regulator,” he explained.
Fare meters are installed in vehicles and the fare-hike approval comes after the BRTA approves the meters after conducting calibration tests according to the new fare chart. Since Uber vehicles have no meters, the BRTA cannot regulate the fare hike.
“The issue of Uber is complex. We are still trying to find a way to prepare a guideline for them. The main problem is obviously with the taxation structure. If we can find a way out, much of the Uber problem will be solved,” Mazumder said.
Tax lawyer Raqibul Alam told The Independent that formulating a guideline to tax Uber is not an easy task. Even countries like the UK and France had found it difficult to tax Uber, he said.
Alam explained that Uber’s model claims that it provides service to the drivers. That means each driver operates a separate business. So, their turnover is likely to be below the VAT registration threshold. Hence, VAT cannot be charged on the fares paid by the passenger.
Alam said that last October, the UK’s employment tribunal had said in a landmark verdict that Uber drivers are not self-employed and should be paid the national living wage.
That ruling could force a rethink of the gig economy business model, in which companies use apps and the internet to match customers with workers. The firms do not employ the workers, but take commission from their earnings. Many of these, including Uber, have become huge global enterprises.
Arguing against being subjected to regulations that govern ordinary taxi companies, Uber said it was not a taxi company. It is a technology company that is merely acting as an intermediary (software/virtual broker), connecting drivers with passengers. It further argued that it does not own cars to fit within the ordinary meaning of taxi operators.
Interestingly, Jordan is also facing the same problem that Bangladesh is facing with Uber. After Uber service was introduced in Amman, the capital of Jordan, last October, its transportation ministry initially planned to block the app.
According to a report published in The Jordan Times, private cars, including Uber vehicles, are not allowed to provide commercial transportation services in Jordan. Many drivers were detained and their cars impounded, as authorities cracked down on the service.
However, last December, the Jordanian minister of state for media affairs, Mohammad Momani, had said, “It is difficult to block such apps and the government is working on legalising their usage.” He had also said that they were planning to license the use of such apps, as modern taxi services that take advantage of smartphones and the GPS system are “available all over the world”. However, the Jordan government is yet to formulate any guideline to license Uber.