This is how Berlin’s cab companies cheat the system

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77 percent of Berlin’s cab companies are not paying their fair share. An experienced eye can catch their tactics very easily: they underestimate annual earnings and make use of black labor.

This is how Berlin’s cab companies cheat the system. (Foto: Till Krech)
This is how Berlin’s cab companies cheat the system. (Foto: Till Krech)

This is how Berlin’s cab companies cheat the system

Surprised? Many people accuse taxi drivers for charging too much money, which is only correct in some cases. Now we are talking big business: what about the people beyond transportation, the accountants of Berlin’s cab companies.

A new study exposes 77 percent of all cars to be involved in scam. The big firms have found ways to pay less taxes on a large scale, so the Berliner Morgenpost. In total the report lists 130 companies and 2100 cars as being part of the widespread, and  common practice in Berlin.

The report clearly shows how Berlin’s cab companies are able to safe a lot of money. Therefore the researchers did a plausibility check and tried to figure out whether business was done legally. Looking behind the curtains revealed exactly where the system was beaten and how accountants managed to safe millions.

Apparently it was not even hard to find the fraud in the documents. It seems like a short look was enough to point out the fraud, which shows not only the tricks inside the company’s papers, but also their inability to hide them.

Annual turnover and black labor

Every cap company is concerned about the annual turnover of each vehicle. Here, this is most noteworthy and the most attractive cost-saver. By reporting a lower return to tax authorities you can can safe a lot of money, especially if you have multiple cars.

Fortunately tax evasion in Berlin’s cab companies isn’t hard to spot. By comparing their numbers with the ones from the federal association of rental cars you can see a big difference already. One cap used by one driver should have an annual turnover of around 45,000 Euro. If someone reports less, he is probably lying.

However, large cap companies are using a majority of their cars constantly with multiple drivers. In that case the annual turnover should be, roughly speaking, at 50.000 Euros.

Now: the so called “unprofessional” cap companies in Berlin all have a lot of cars. All of which reported a return of more or less 35,000 Euros (2014) per car. Which cannot be right, because honest companies report their return at almost 100,000 Euros.

In addition the study points out their finding in their personnell cost. Some of Berlin’s cab companies repeatedly reported their labor costs to be between 25,000 and 30,000 Euros per car.

Anyways, one employee working fulltime in one car costs about 28,000 – in a two shift operation 56,000 Euros. The report talks about the use of black labor, because the company’s numbers do not make any sense. And the ratio between fuel use and costs doesn’t add up either.

If the numbers were correct, the cars must drive only one shift a day and its drivers get only a quarter of the minimum wage in Germany.

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