Taking Uber can now be tax-free: here's why

Uber is many things to many people. But now, Uber is also tax-free, at least for some commuters in New York City. 

Neil Hall/Reuters
The Uber app logo is displayed on a mobile phone in central London.

Uber is many things to many people:

Now, Uber is also tax-free--at least for some commuters in New York City. 

Commuter tax benefits

Larger corporations offer a range of perks to their employees, including what are known as "commuter tax benefits". Those benefits take the form of funds that workers use on buses, carpools, and other means of transportation to help them get to and from the office. Like medical insurance, matching 401k contributions, and other benefits, such funds are exempt from taxes.

Commuter tax benefits were written into law back in 1993 to encourage workers to take mass transit. Guidelines dictate what sort of vehicles are eligible for the benefits, and in the case of highway vehicles, the IRS has this to say:

"A commuter highway vehicle is any highway vehicle that seats at least 6 adults (not including the driver). In addition, you must reasonably expect that at least 80% of the vehicle mileage will be for transporting employees between their homes and work place with employees occupying at least one-half the vehicle's seats (not including the driver's)."

Uber's carpool service, known as uberPOOL, meets those guidelines, and the company has amassed enough uberPOOL vehicles in New York City to offer the service as part of commuter tax benefits programs. Eligible employees simply open the Uber app and add whatever form of payment their company provides like a prepaid MasterCard or Visa. Then, they use that payment to hail an uberPOOL or ($5 Pool, if they're in Manhattan) on their daily commute.

The program is currently limited to workers in New York City who are employed by companies that use WageWorks to manage commuter tax benefits. If it takes off, though, expect to see other cities and benefits providers added to the list soon.

Generally speaking, Americans aren't keen to buddy-up on their commutes. Given how crazy people are about Uber, though, carpooling could become the next big thing.

This story originally appeared on The Car Connection.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.