Thursday, January 21, 2016
Shuyi Oei (Tulane) presents The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums (with Diane Ring (Boston College)) at Indiana today as part of its Tax Policy Colloquium hosted by Leandra Lederman:
In this Article, we investigate the tax issues and challenges facing Uber and Lyft drivers by studying their interactions in three internet discussion forums: Reddit.com, Uberpeople.net, and Intuit TurboTax AnswerXchange. Using descriptive statistics and content analysis, we examine four research questions: (1) the substantive tax concerns facing forum participants, (2) how taxes factor into driving and profitability decisions, (3) forum participants’ understandings of and attitudes towards worker classification issues (i.e., independent contractor vs. employee), and (4) user sophistication, attitudes towards compliance, and other cultural features of the forums.
We find that while forum participants displayed generally accurate understandings regarding tax filing and income inclusion obligations, their approaches to expenses and deductions were less accurate and more varied in terms of sophistication and willingness to comply with tax law. Forum participants also engaged in frequent discussions about whether driving was ultimately profitable and exhibited a range of awareness of how taxes affected such profitability. They also displayed heterogeneous understandings and preferences regarding worker classification questions (i.e., independent contractors versus employees). Finally, while the forums contained a surprising degree of sophisticated and accurate tax advice, they also contained a good amount of inaccurate, confusing, or misleading information. It is thus uncertain whether forum readers are able to successfully distinguish between accurate and inaccurate advice dispensed in the forums.
Based on our findings, we make tentative recommendations for effective tax administration in the ridesharing and related sectors, calling for industry-specific guidance, guidance tailored to “microbusinesses,” more robust IRS use of social media channels, and guidance regarding Form 1099-K interpretation. We also suggest avenues for future research.
Margaret Ryznar (Indiana-Indianapolis), Leandra Lederman (Indiana-Bloomington), Shuyi Oei (Tulane), and Pamela Foohey (Indiana-Bloomington)