Lyft Accuses San Francisco of $100 Million Tax Overcharge

[BumRushDaShow]

Source: Bloomberg

December 24, 2024 at 1:04 PM EST
Updated on December 24, 2024 at 7:38 PM EST


Lyft Inc. accused the city of San Francisco in a lawsuit of overcharging it $100 million for taxes over five years by unfairly characterizing the compensation earned by drivers who use its app as company revenue.

The company said its hometown calculated its taxes from 2019 to 2023 based on the total amount of money that passengers paid for rides. But Lyft said that isn’t how its business model works.

“Lyft considers drivers as its customers,” the company said in the complaint filed in state court. “Accordingly, Lyft recognizes revenue from rideshare as being comprised of fees paid to Lyft by drivers, not charges paid by riders to drivers. Lyft does not treat drivers as employees for any purpose.”

The tax dispute points to a broader, yearslong controversy around how Lyft, Uber Technologies Inc. and other so-called gig economy firms rely on contractors and avoid having to provide employment benefits. The companies have collectively spent hundreds of millions of dollars to settle claims in the US and abroad that they have misclassified workers without reaching a permanent global resolution. In California, drivers were deemed independent contractors under a 2020 initiative that the companies funded and voters approved in 2020.

Read more: https://www.bloomberg.com/news/articles/2024-12-24/lyft-accuses-san-francisco-of-overcharging-100-million-in-taxes

---

No paywall (gift)

[LisaM]

1. Ugh.

I rarely use rideshares, but when I do I have chosen Lyft as being slightly better. But these gig companies are messing around with the tax bases of cities and municipalities and here is one more example.

[jimfields33]

2. They must be making a huge revenue,

If San Francisco is charging 100 million in taxes.

[Bengus81]

3. So they're not your employee's but WHO sets the price of a ride?

If the drivers don't then in many ways they ARE your employee's. I've been through this work place scenario decades ago. The Company wants to control every aspect of your working life with them and then claim your a sub contractor to get out of withholding and then paying taxes, paying into unemployment matching social security etc,etc.

[Jacson6]

4. A flawed argument.

“Lyft considers drivers as its customers,” the company said

Yes they are. But you receive the revenue and income and then you gift it to your customers.

See how that works.

[FakeNoose]

5. It sounds like they're saying the Lyft "app" is the problem

If you don't use their "app" you don't get overcharged, am I right? Why aren't they working on getting their "app" revised and get the flaws out? Instead they sue the city of Sn Francisco for the flaws in their own app.

[DallasNE]

6. Should Be Easy To Clear Up

Who has the power to hire and fire? Do the drivers pay quarterly income and Social Security taxes or is that handled by Lyft? State law does not override Federal law. How is the dispatcher function handled?

Years ago, when working as a computer consultant, I chose to be an independent contractor because my wife had health insurance with her employer. Sure, it meant I had no sick or vacation days but my take-home was larger by several hundred a month. My employer handled my Social Security and Income Tax withholding, not me.

This puts traditional cab companies at a huge disadvantage. Indeed, this will drive them out of business. Plus, the government still needs the tax revenue so that means you and I will be picking up what Lyft doesn't pay.