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Image: Toby Morris/Tina Tiller

OPINIONBusinessJuly 25, 2022

Uber must be reined in – and we all have a part to play

an illustration of a car with a phone and the uber logo
Image: Toby Morris/Tina Tiller

Further revelations about the toxic nature of the ride-sharing behemoth, which avoided up to $12.8m in corporate income tax in New Zealand in 2020, show we must stop turning a blind eye in favour of convenience, argues Terry Baucher.

The release of The Guardian’s Uber Files underline Uber’s reputation as an egregious example of modern capitalism at its worst, a toxic combination of amoral business ethics, greed, hubris and questionable economics. 

Although these had been thoroughly exposed by Mike Isaac’s 2019 book Super Pumped: The Battle for Uber, I was surprised by the Guardian’s details of how the Netherlands tax authorities cooperated with Uber. This included deliberately delaying responding to requests for information from tax authorities in France, Germany, Sweden, the United Kingdom and Belgium well beyond the normal six-month response period. The Dutch even secretly shared information about the positions and negotiating tactics of other EU countries where Uber operated. 

It would be convenient to dismiss these revelations as those of a few (OK, more than a few) bad apples – and essentially that is Uber’s official position. In the wake of the release of the Uber Files it put out a public statement that concluded:

We have not and will not make excuses for past behaviour that is clearly not in line with our present values. Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come.”

Fine words. The problem is, even if you put aside the Uber Files revelations, the company remains the exemplar of a confluence of greed, politics and questionable economics. Uber and other tech giants such as Google and Facebook illustrate how the public and politicians happily accept the benefits of often questionable business practices and aggressive tax planning but turn a blind eye to their consequences. In effect, we love the sin but hate the sinner. 

Taxi drivers protest against Uber in Budapest, Hungary, January 18, 2016. (Photo: Elekes Andor CC BY-SA 4.0)

As for changing its spots since founder Travis Kalanick stepped down in 2017, Uber decided in early 2019 to fine-tune its tax planning by moving a subsidiary previously located in Bermuda to the Netherlands. This was partly in preparation for its initial public offering but also in response to European moves cracking down on its aggressive tax planning. As a result of the move, Uber created a US$6.1 billion Dutch tax deduction which it will be able to offset against future profits (when and if they might arise). 

The Netherlands lies at the hub of Uber’s corporate structure and tax planning. Uber’s main New Zealand subsidiary Uber New Zealand Technologies Limited (Uber NZ) is wholly owned by Amsterdam-based Uber International Holding B.V. According to Uber NZ’s latest filed financial statements for the year ended December 31, 2020, Uber NZ’s principal activities are described as “to engage in the business activities of providing market research product and service marketing including promotion and support activities to its related companies”. The company reported service fee income for the year ended December 31, 2020 of $3,749,955 with a pre-tax profit of $150,000. Thanks to some prior year adjustments, Uber NZ paid no income tax for the year. 

Uber NZ’s financials give no indication of the true scale of its activities in Aotearoa. This is because currently authorities here accept Uber drivers are independent contractors. Uber NZ is not involved in the transactions between drivers and passengers. Instead, whenever a customer uses the Uber app the payment is initially routed offshore to the Netherlands which then sends back the net payment to the driver. Based on an examination of Uber Australia’s financials, the Centre for International Corporate Tax Accountability and Research estimates Uber avoided $6.4 million to $12.8 million in New Zealand corporate income tax in the 2020 tax year. 

Overseas, notably in France and the United Kingdom, drivers have been deemed to be employees. Uber is desperate to avoid this outcome (I doubt its financial model would remain viable if it were to widely happen) and based on its United States Securities and Exchange Commission filings for December 2021, is currently embroiled in ongoing disputes in several countries over the treatment of drivers. 

On the other hand, Uber is an example of the benefits for consumers of introducing competition. Its arrival, together with other ride-sharing apps such as Ola and Zoomy, has shaken up the taxi industry and delivered much greater choice at lower costs. But if Uber users have greatly benefited from its arrival, that’s not necessarily the same for drivers. 

Illustration: Toby Morris

Similar ethical issues arise when considering Facebook or Google. They also use aggressive tax-planning tactics although moving to so-called country-by-country reporting gives a clearer idea of the extent of their activities in Aotearoa. 

Google New Zealand Limited’s revenue from advertising reseller revenue for the year ended December 31, 2021 was $57.8 million. Its net profit before tax was $17.9 million and its corporate income tax for the year was $2.9 million after timing adjustments. However, the service fees Google New Zealand paid to other overseas companies in the Alphabet Group (the owner of Google) in the year amounted to $697.8 million. These indicate the level of advertising revenue activity actually going through Google New Zealand. 

Similarly, Facebook New Zealand’s December 2021 results reported $6.5 million in revenue with a tax charge of $605,000. It reported gross advertising revenue of $88 million but purchased over $84 million of services from Facebook Ireland where the corporate income tax rate is 12.5%. 

In summary, Google and Facebook appear to have extracted close to $800 million of advertising revenue from Aotearoa but paid just over $3.5 million corporate income tax on their reported profits for 2021. This has financially weakened our media at a time when its role is ever more important in combating misinformation and bigotry (sometimes spread through platforms owned by Alphabet and Meta). 

It’s not certain the international tax reform deal announced last year will make any significant difference once (if) it’s implemented. Alphabet, Meta and Uber are perfectly entitled to charge their subsidiaries in Aotearoa reasonable fees for the use of their intellectual property and providing other services. This limits the estimated potential benefit of the deal for Aotearoa to between $60 and $100 million annually. 

It’s clear from the Uber Files that the likes of French president Emmanuel Macron and several Dutch politicians were sold on the apparent benefits of deregulation Uber offered. They chose to ignore the downside of the gig economy for workers. Indirectly, Uber continues to enable our car dependency therefore delaying decarbonisation of the transport sector. 

Politicians should also be very wary of promises of additional tax revenue through offering favourable tax breaks. Ireland’s much-touted low corporate tax rate of 12.5% attracted multinationals like Apple and Facebook to invest in the country. However, just 10 multinational firms pay over half of Ireland’s corporate tax receipts, expected to be between €18 and €19 billion this year. This prompted John McCarthy, the Irish Department of Finance’s chief economist, to warn that this represents an incredible level of vulnerability for the Irish economy. 

Reining in the behaviour of the likes of Uber will involve action by governments. Investors too have a part to play, as they did when forcing out Travis Kalanick. The bigger change would be in the behaviour of we, the public, and politicians by looking beyond the immediate benefits of greater convenience and lower costs. We have to learn to stop loving the sin.


Follow Bernard Hickey’s When the Facts Change on Apple Podcasts, Spotify or your favourite podcast provider.

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Sustainable period product businesses Hello Period, Wā Collective and Organic Initiative (Photos: Supplied; additional design: Tina Tiller)
Sustainable period product businesses Hello Period, Wā Collective and Organic Initiative (Photos: Supplied; additional design: Tina Tiller)

BusinessJuly 23, 2022

How Aotearoa became a world leader in the period industry

Sustainable period product businesses Hello Period, Wā Collective and Organic Initiative (Photos: Supplied; additional design: Tina Tiller)
Sustainable period product businesses Hello Period, Wā Collective and Organic Initiative (Photos: Supplied; additional design: Tina Tiller)

From world-beating menstrual cups to ‘duvet days’, Aotearoa is at the forefront of new thinking about menstruation. Reweti Kohere speaks with period product businesses about the progress already made – and what work remains.

All week we are examining our relationship with menstruation in Aotearoa. Read more Bleed Week content here.

When Hello Period started in 2017, “no one would write a story on us,” says co-founder Robyn McLean, whose period products business is best known for its menstrual cup. Now, menstruation is starting to become an everyday conversation for students and teachers, workers and bosses, children and parents – a far cry from the shame and embarrassment that periods used to automatically elicit even a decade ago. McLean is heartened by the progress she sees. “The change in that five years is massive.”

The prominence of sustainable, reusable alternatives best defines New Zealand’s world-leading status. This year, Hello Period’s menstrual cup was ranked number one by US-based fashion and entertainment publication Cosmopolitan, in its “Holy Grail Beauty Awards” – the only sustainable period product chosen by the judging panel. In 2020, Aotearoa period underwear company AWWA received funding and mentorship from Coralus (formerly SheEO), a global female business network providing interest-free loans to selective women-led, women-owned ventures by members pooling together their monthly financial donations (Hello Period received the same backing in 2018). And period product business Organic Initiative (OI) in 2019 cracked the $4.3b US feminine hygiene market when giant multinational retail chain Walmart agreed to stock its range of 100% organic, biodegradable single-use products. Co-founder Helen Robinson at the time told the Herald that supplying Walmart was a coup for OI “because many markets look to the US for what they do and that then is a Trojan horse into other markets”.

It’s no small feat that periods are starting to be acknowledged more in Aotearoa, says Miranda Hitchings, the co-founder of Dignity, a social enterprise helping improve period equity since early 2017. “That’s such a massive thing because, from that, action can happen.” Action like businesses supplying period products in workplace bathrooms, the government-funded rollout of period products in all schools and kura until 2024, and the removal of gendered packaging and language. Inclusivity is important to Hello Period. In celebration of Pride month in 2021, with the help of American non-binary model and activist Rain Dove, the company wanted to support people who found periods triggering because, for too long, it was deemed a “purely female thing”, says McLean. But not everyone who has a period is female, and not all females have periods. “For us to be able to say ‘people with periods’ is no big deal at all…and that’s not to dismiss the fact that, obviously, the majority of our customers would identify as women,” the co-founder says. “But that’s not all of them.” 

Hello Period menstrual cups (Photo: Supplied)

For Dignity, inclusivity is the result of changing attitudes. The social enterprise’s buy-one, give-one model means that for each box of period products a business buys, an equivalent number of boxes will be gifted to schools, youth and community organisations. Alternatively, businesses can purchase boxes to donate outright. In the past five years, Hitchings has noticed a shift in how businesses perceive periods. “When we first started, businesses wouldn’t say the word ‘period’ through the entire meeting, even though we’d be pitching period products to them. They were really scared and embarrassed,” she says. “That’s definitely not the case for the majority anymore.” But that progress depended on conversations being reframed – Hitchings and her team used to compare the supply of period products to having tea and coffee in the workplace; some people have it, some people don’t but it makes going to work easier. That analogy then gave way to something even more basic – toilet paper. “People who have periods need to manage it somehow and we don’t expect people to bring toilet paper into the workplace,” Hitchings says.

For all the progress made in workplaces, the concept of giving specific paid time off to people experiencing period pain and discomfort is still controversial. Menstrual leave has existed in various forms around the world for at least a century – the former Soviet Union is believed to be the first country to implement paid time off in 1922. Only a handful of countries offer it today, including Japan, Indonesia, South Korea, Taiwan and Zambia. In countries lacking any nationwide legal mandate, companies and organisations, including in Aotearoa, aren’t waiting around.

The policy can become politically charged, says Olie Body, the founder of Wā Collective, a business selling reusable menstrual cups and gifting them to those in need. “But then the question is whether or not it should be a controversial issue.” The debate is varied – some argue it’s unnecessary because existing sick leave provisions can adequately cover period pain as some people have a legitimate medical reason for taking time off, such as endometriosis. Others argue that menstruation isn’t an illness, rather a biological experience that is beyond people’s control. Some are concerned that offering menstrual leave is discriminatory because a group of people is offered an additional employment benefit to the exclusion of those who don’t have periods. Others are worried such a policy might discourage businesses from hiring people who have periods, given it’s another extra employment cost.

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— Editor-at-large

Wā Collective, made up of Body and her mum Janine Peters, doesn’t have a formal menstrual leave policy, but they consider periods under the umbrella of putting their health before anything else in the business, Body says, who’s slowly reclaiming hers after two years recovering from burnout and a concussion. While she’s still thinking through the implications of menstrual leave, Body’s instinct is that Aotearoa should legalise the policy, as it could go a long way in recognising the human experience of having a period. “The more that we can acknowledge [that], the better we can do our work and the better we can live our lives. And part of that is having a period,” she says.

Dignity founders Jacinta Gulasekharam and Miranda Hitchings (Photo: Supplied)

Dignity doesn’t have a specific menstrual leave policy either. “But maybe we should?” asks co-founder Miranda Hitchings, before noting Dignity employees, by the very nature of their work, are understanding of periods. Still, the “normalisation of pain” in society is sad. “The level of pain that some people face with periods is not acceptable and the standardised approach is that people should push through it, right?” Hitchings says. “That’s why lots of things like endometriosis go undiagnosed.”

“Duvet days” is how Hello Period treats menstrual leave – the policy provides the team of five an additional five days of paid leave for any reason, including menstrual pain or the side effects of menopause – no questions asked. Because menstrual leave is complicated, it was important the duvet days policy took the burden of having to provide a reason off employees’ shoulders, McLean says. She’d love to see businesses feeling comfortable asking new employees if they have any additional needs that could be accommodated and supported, including around their menstrual cycles. As a business owner herself, every leave day is a cost to any business. “However, having happy and supported employees is more important than anything,” McLean says.

OI, with its small team of about 10, doesn’t have a menstrual leave policy and yet if someone needed to work from home or rest because of period cramps, “we wouldn’t worry about something like that,” says chief executive Clare Morgan. Staff wouldn’t have to hide behind another excuse either, like a cold or a headache. “They would be open about why.” Menstrual leave needs to be debated though, Morgan says, for a one-size-fits-all policy could lead to unintended consequences, such as increasing business owners’ reluctance to employ women, in turn blocking them from fully participating in the economy.

There’s still much work to do to keep Aotearoa along this progressive path. Reducing residual stigma is one area, Hitchings says. Based on a small-sample, indicative survey of Dignity’s audience, a significant portion of respondents said they suffered from period pain, of which about 60% said that it affected their ability to work. But most people said they didn’t feel comfortable giving period pain as a reason for calling in sick. “We have progressed, but we’re not there. Stigma is still very real,” the co-founder says.

Wā Collective founder Olie Body (left) and colleague and mum Janine Peters (Photo: Supplied)

Body from Wā Collective wishes that switching from synthetic to organic products was simple but numerous factors have an impact on that purchasing decision. The high upfront cost of a menstrual cup (Wā’s version sells for $49) might be a barrier for someone who can better afford a pack of eight pads for $5 from The Warehouse, she explains. A disposable tampon might suit someone who’s homeless, as reusable period underwear requires access to washing machines. Periods are intimate and personal experiences too, and people might prefer different products from the ones their parents told them to use when they started menstruating. “I have no right to go ‘you should be doing this, you should be doing that’,” Body says. “It’s very much about choice and raising awareness around our choices and their impacts on our body and the environment.”

Continuing to talk openly and honestly with younger people who menstruate is critical too, says OI’s Morgan, whose three sons and one daughter are comfortable with their mum working in the period product industry. “My sons explain to me what their girlfriends are finding and not finding out so that’s good. But that tends to be the way we’ve brought our children up,” Morgan says. “It’s improving, but it still needs more work done where boys and men feel comfortable having those conversations.” Hello Period’s McLean is a big advocate for period education in schools, including teaching boys and kids of other genders about periods. But she can see the progress made right in front of her – most of her daughter’s friends use sustainable period products, something the Hello Period co-founder never thought she’d see happen so quickly. “That gives me so much hope for the future.”

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