Driving an Uber or Lyft car in San Francisco is about to get more expensive by at least $91 a year.
In a letter that the Office of the Treasurer and Tax Collector started mailing Friday, City Hall is now requiring some 37,000 Uber and Lyft drivers who operate in San Francisco and work seven or more days a year to secure a license. A license fee of $91 shall be paid by drivers who earn less than $100,000 a year.
The new mandate takes effect upon receipt of the letter and must be complied with within 30 days after receipt or face penalties and payment obligations. For those who have been in business for years, they will have to pay for the years they have missed.
San Francisco law also requires businesses to display their registration certificate in their place of business and, in the case of the Uber and Lyft drivers, their car. Lyft has serious concerns with how the city intends to implement the law.
People in San Francisco who want to earn additional income by driving at Lyft shouldn't sacrifice their privacy to share a ride, said a Lyft spokesperson.
The implementation of the new license is supported by an old law that requires all businesses operating in the city to register their business with the city.
"This has been a law that has been around for many years. It's very clearly spelled out on our website - the law here in San Francisco requires you to register your business with the city. If they missed that requirement, they are still obligated to do that," said SF City Treasurer Jose Cisneros.
Cisneros does not expect all the identified drivers to be still connected with either Uber or Lyft, but said that if all of them register, it would generate a potential $3.37 million in tax revenue for the city.
Uber And Lyft Are Split On The Issue
While Uber is exploring the impact of the new licenses on its on-demand ride services, the company is not putting up a fight for now.
"Uber partners with entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements," emailed Laura Zapata, a spokesperson for Uber.
The new licensing comes on the back of legal challenges Uber is facing. A class-action lawsuit has been filed by its drivers, claiming that the company improperly classifies them as independent contractors. While the trial is set to be heard in a California court in June, the licensing requirement may strengthen Uber's argument that the drivers are independent contractors and not employees.
Lyft, on the other hand, is taking a different stand. It is not supportive of how the license requirement will be implemented, asserting that protecting the privacy of its drivers is a priority.
Lyft has also been hit with lawsuits by drivers fighting for employee status. The company has agreed to a $12.25 million settlement, but a federal judge rejected the deal.