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San Francisco to Require Business Licenses for Uber and Lyft Drivers

App Car Service Startups Continue To Irk Traditional Cab Companies And RegulatorsApp Car Service Startups Continue To Irk Traditional Cab Companies And Regulators
An Uber car.Photograph by Justin Sullivan — Getty Images

The ride is over for Uber and Lyft drivers in San Francisco who lack a business license.

Drivers of those ride-hailing services who work seven or more days in San Francisco will now have to get a business license to comply with city regulations, as the San Francisco Chronicle first reported and Fortune later confirmed. The license costs $91 annually for drivers who collect less than $100,000 a year in fares.

City’s Treasurer Jose Cisneros is acting now despite Lyft and Uber operating in San Francisco, their hometown, for several years. One reason for this sudden interest, according to the Chronicle, is that the treasurer now says he has the names of Uber and Lyft drivers, although he declined to share with the newspaper how he obtained them. Another reason may be that the city opened an online business license registration system last month.

According to a spokeswoman, the treasurer’s office has received information about a number of San Francisco businesses and their operations by using subpoenas and other tools. She declined to share more specifics, citing taxpayer confidentiality laws, including about whether any information came from Uber and Lyft.

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The treasurer will send a letter to roughly 37,000 drivers in three batches over the next few days, according to the report. Drivers will have 30 days to respond by either submitting a business license application or an explanation about why they don’t need one.

Uber, which often opposes regulations, is putting up no fight for now. “Uber partners with entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements,” an Uber spokeswoman told Fortune.

Lyft, on the other hand, is not so supportive.

“We have serious concerns with the City’s plan to collect and display Lyft drivers’ personal information in a publicly available database. People in San Francisco, who are choosing to drive with Lyft to help make ends meet, shouldn’t have to compromise their privacy in order to share a ride,” a Lyft spokeswoman told Fortune, adding that the company will be putting together resources to help drivers with the business license issue.

 

Both Uber and Lyft are fighting off high-profile lawsuits that allege they have misclassified their drivers as independent contractors rather than employee. The independent contractor classification helps the companies avoid extra costs including certain benefits and wage requirements.

The city is using that classification to justify its current push. If drivers are independent contractors, the city’s argument goes, they must register for business licenses.

San Francisco’s treasurer has also gone after home-sharing company Airbnb, another startup headquartered in San Francisco, and forced it to pay taxes on behalf of its hosts.