Lyft Takes Legal Action Against San Francisco Over $100 Million Tax Dispute
In a significant legal move, Lyft has filed a lawsuit against the city of San Francisco, claiming it has been unjustly charged more than $100 million in taxes, according to Bloomberg. The heart of the lawsuit revolves around how San Francisco has categorized the money earned by Lyft drivers, which Lyft argues has been mistakenly counted as company revenue.
- The dispute spans over a five-year period.
- Lyft insists its drivers are customers, not employees.
- Revenue is recognized from fees paid by drivers to Lyft, not from rider charges.
“Accordingly, Lyft recognizes revenue from rideshare as being comprised of fees paid to Lyft by drivers, not charges paid by riders to drivers,” reads the complaint.
{Lyft’s Legal Complaint}
This lawsuit adds another layer to the ongoing debate about how gig economy platforms should classify their drivers. The issue gained attention last summer when Lyft, along with Uber and DoorDash, celebrated a victory. The California Supreme Court upheld Proposition 22, allowing these companies to classify their drivers as independent contractors. This classification exempts them from providing full employee benefits.
As this legal battle unfolds, it highlights the complex dynamics between gig economy companies and regulatory frameworks. It’s a topic that continues to evolve and impact both businesses and workers alike.
