Golden Gate bridge

Photo via Leonardo Pallotta (CC-BY 2.0)

San Francisco could earn $3.37 million a year with this new regulation.

Looks like Uber and Lyft's home of San Francisco may be the one city the ride-hailing companies can't pull out of.

On Friday, the San Francisco Chronicle reported more than 37,000 Uber and Lyft drivers who work in San Francisco for more than six days a year are now required to obtain a business license in the city as "independent contractors."

Previously drivers were not required to have the license, but City Treasurer Jose Cisneros cited the city's launch of a new online business registration system for one reason why he's suddenly requiring the change.

The Chronicle reports the new license will cost drivers $91 each year if they earn $100,000 or less in gross receipts. If a driver worked in previous years, they are also required to pay a registration fee for the years they weren't registered. If all 37,018 drivers register, it will generate $3.37 million a year for San Francisco.

Having obtained the names and addresses of drivers in San Francisco, Cisneros is notifying drivers of the requirement by mail.

The correspondence states that the recipient has been identified as a driver for a transportation network company, and must obtain a business registration certificate within 30 days. The letter states that failure to respond may result in penalties and payment obligations.

"This has been a law that has been around for many years. It's very clearly spelled out on our website—the law here in San Francisco requires you to register your business with the city," Cisneros told the Chronicle. "If they missed that requirement, they are still obligated to do that."

The change comes amid Uber and Lyft's strict insistence that their drivers are independent contractors, not employees.

In January, Lyft agreed to settle a 2013 class-action lawsuit regarding the employment status of California drivers, though the settlement proposal was rejected in April by a San Francisco federal judge for being too low. A similar class-action lawsuit against Uber is still ongoing.

Despite Uber's continual pushback when facing city regulations such as the requirement to conduct fingerprint-based background checks, often threatening to leave the city and following through, Uber had no such reaction to the new driver regulation, and indicated it would not challenge San Francisco.

"Uber partners with entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements," Uber spokeswoman Laura Zapata wrote in an email to the Chronicle.

Lyft spokesperson Chelsea Wilson, however, said the TNC does take issue with the new regulation.

"We have serious concerns with the city's plan to collect and display Lyft drivers' personal information in a publicly available database," Wilson wrote in an email to the Chronicle. "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."

H/T San Francisco Chronicle

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