Cash tips paid to the server are essentially invisible to the employer. This is an accepted trade-off in a system where restaurants can pay below minimum wage.

An Uber customer cannot pay cash. They pay Uber first (fare + optional tip) and Uber in turn pays the drivers. So they know with 100% certainty how much money is changing hands. For a company that is worth literally billions, having a basic financial reporting system that calculates the government's cut is not some kind of overbearing regulatory hassle.

The "market" rate is partially set based on those assumptions because employees wouldn't be able to live on what they are paid thus the labor force and thus the company would collapse without an increase in wages.

In both cases its a transfer of wealth from the middle class to relatively rich owners.

The extra cash helps for when business is slow and the server has to report they made the minimum wage to the employer anyway because the employer is responsible for ensuring that the server makes state minimum if the wage plus tips doesn't equal such. Basically the employer will just fire people who make the employer actually do this.

It also helps cover the foregone wages when the employee is working through breaks and lunches even though the half hour lunch is deducted from the employees pay.

In short employers sometimes pay as little as $2 an hour x 24 hours per week.

Since nobody on earth can live on $200 a month some combination of tips from you, government benefits paid for by you, and second or third jobs makes survival possible.

Most of us are not terribly concerned if the server is paying taxes properly and are concerned that the business is basically welfare for inefficient businesses who should probably go under.

The new checks were based on information Denmark had received from the Dutch authorities, where Uber’s European headquarter is based.

Danish tax authorities said in a statement they had checked 1,195 Uber drivers’ tax reports and of those 1,192 have had their tax changed now.