Some Ride-Share Service Drivers Owe Hefty Fees For Business Licenses
SAN FRANCISCO (CBS SF) -- Drivers for Uber and Lyft in San Francisco say they're being blind-sided by a demand from the San Francisco's treasurer's office that they obtain city business licenses. Some drivers say the fees, which can run into the hundreds of dollars, could drive them out of business.
In mid-April, San Francisco sent out notices to approximately 37,000 Uber and Lyft drivers telling them: they must register for a business license because they are independent contractors. Many didn't realize they would also have to pay penalties and fees for every year they've worked unregistered.
Driver Michael Sicard learned about the requirements last week. "If I knew this was going to happen, I would have planned for it," Sicard told Consumerwatch reporter Julie Watts. "Uber and Lyft said that this is a new rule."
However, when he contacted the treasurer's office, Sicard says he was told the only thing that's new is that both companies finally handed over a list of all their drivers. "We're being charged penalties interest and fees for last year and this year," Sicard said. Since the 2017 fiscal year begins in June, drivers must also pay for next year's registration now too.
At $91 a year, plus $155 in fees and penalties every year past due, drivers like Michael have to pay more than $500 by May 15th, "I just can't come up with the money that quick and I won't be able to drive anymore," Sicard said.
Many drivers blame the ride-share companies for leaving them in the dark. "I even emailed inquiries asking if there are any other permits or licenses that I'll need and they said no," complained Sincard.
However, under Prop E (passed back in 2012), anyone working more 7 days a year in San Francisco, including driving on city streets, must register and pay an annual fee.
In a statement, Uber says "as independent contractors, drivers are responsible to follow appropriate local laws." Lyft echoed the sentiment and insists the rules are new," …we do not believe the city had made a decision about how to treat ridesharing drivers for business license purposes until very recently."
However the treasurer's office points to a press release and media blitz nearly a year ago reminding drivers and rideshare companies that they are required to register. The press release, widely covered by local media, stated in part "This notice to drivers follows nearly two years of enforcement work, including multiple requests for information and subpoenas to get sufficient data about business operations from TNC's domiciled in San Francisco"
Representatives with the treasurer's office say they are now "most concerned" that drivers register moving forward. For those who can't afford the penalties and fees, they can pay in increments, however they will be charged interest on the balance.
Both Uber and Lyft say they are disappointed the city is treating drivers as small businesses. Business licenses are public information, which may include a divers home address.
Drivers like Sicard are calling on the ride share companies to step in and help them cover the unexpected penalties and late fees. "I don't have that money and without the business license, I can't make ends meet. So my car will get repossessed and I'll go into bankruptcy," Sicard said.
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