San Francisco’s treasury department was not kidding when it told Lyft and Uber drivers in April that it wanted to collect business fees from them.
Though it’s only $91 for an annual license to operate a business—which the city says applies to these drivers—some are getting bills as high as $780, according to a report from the SF Examiner. That’s because the city is also charging them for late registration penalties, interest, and annual license fees for previous years.
In mid-April, the treasurer’s office send out letters to 37,000 drivers, notifying them that they need to register for a business license. According to the treasury, this has long been the law, but wasn’t clear exactly why the treasurer’s office took so long to enforce the requirement.
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However, the department had recently created an online portal where businesses can file necessary paperwork. A spokeswoman for the department also said that it had recently obtained the names of Uber and Lyft drivers operating in San Francisco—necessary information in order to enforce this law—though she declined to share where the information came from, beyond stating that the office receives information about businesses through subpoenas and other tools.
The added costs may be enough to make some drivers rethink whether they want to continue driving for these ride-hailing services in San Francisco. “It’s really a deal killer,” San Francisco Uber and Lyft driver Dan Carrigan told the SF Examiner.
And given the ride-hailing companies’ aversion to covering employee costs like expenses and benefits for drivers, it’s unlikely they’ll volunteer to pay off the fines.
“We encourage the Treasurer to ease financial and bureaucratic burdens on independent contractors and hope the he will take steps to ensure their privacy and safety,” an Uber spokesman told Fortune in a statement. Fortune has also contacted Lyft and the office of the treasurer, and will update the story if we hear back.
Uber and Lyft Are Leaving This U.S. City
The treasury’s attempt to collect fees owed by Uber and Lyft drivers is only the latest move by San Francisco’s government to make a new generation of startups obey the city’s business laws. Airbnb (AIRBNB), also headquartered in San Francisco, has long been embattled with city regulators over its marketplace for home-sharing, which many say enables illegal hotels and takes housing units off the long-term rental market.
The story has been updated with a statement from Uber.