Get All Access for $5/mo

San Francisco Demands Uber and Lyft Drivers Get Business Licenses Not only are these licenses not free, but you'll be charged for years you previously drove without one.

By David Murphy

This story originally appeared on PCMag

Robert Gauthier | Getty Images

Time to set aside a little extra cash if you're an Uber or Lyft driver in San Francisco. For reasons unknown, the city has now decided to crack down on those who make a living (or even part of a living) driving other people around on either of the two big mobile ride-hailing services.

If you work in the city for seven days or more each year, which likely covers most of the drivers, then you'll have to pay a $91 fee for an annual business license (if you pull in $100,000 or less for your driving). Even better, when you get a notification in the mail telling you to pay up, you'll also be charged retroactively for any previous years that you didn't pay for a business license -- including penalties and interest.

"We have a very broad and comprehensive business registration requirement. 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. If they missed that requirement, they are still obligated to do that," San Francisco City Treasurer Jose Cisneros told SFGate.

Though Cisneros didn't indicate a specific reason why now, of all times, the city is cracking down on license-free drivers, San Francisco did finally get an online business registration system operational last month. That likely makes the registration process much, much easier than having to submit raw paperwork in person at City Hall.

Additionally, San Francisco is likely cracking down now since it finally -- via methods Cisneros didn't share -- has a list of many of the Uber and Lyft drivers who have been operating in the city. Cisneros' office mailed out slightly over 37,000 letters yesterday to drivers who will now have to register as a business and pay up or tell the city that they haven't been ferrying passengers around at any point in the past 30 days.

As you might expect, the ride-hailing companies aren't taking the announcements very well.

"We have serious concerns with the city's plan to collect and display Lyft drivers' personal information in a publicly available database. 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," a lift spokesperson told The Los Angeles Times.

Uber was a bit more matter-of-fact in its response.

However, San Francisco's move does give both services a bit of an unexpected boost to their own arguments that their drivers are independent contractors, not employees. If they were the latter, they wouldn't have to pay any kind of fee for a business license. However, both ride-hailing companies would have to shell out quite a bit more in benefits and pay for their new employees, and these drivers would gain additional legal protections."Uber partners with entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements," said a spokesperson in a statement sent to SFGate.

If all of the drivers San Francisco is targeting end up paying up, it'll generate more than $3.37 annually for city coffers.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Growing a Business

5 Strategies to Know As You Scale Your Business

Scaling a service-based company requires a comprehensive approach that goes beyond simply increasing revenue. It requires careful planning, strategic decision-making and a deep understanding of market dynamics.

Business Solutions

How to Build Trust and Transparency With Your Customers While Taking Their Data

In this article, we'll explore why businesses must prioritize customer data security and privacy when embracing innovation and provide guidance on navigating the complex landscape to mitigate inherent risks.

Business News

Their Million-Dollar Home Was Listed 'For Sale By Owner' on Zillow for $10,200 — and Not By Them: 'Zero Help'

A Kansas couple has no intention of selling their five-bedroom home, but people keep knocking on their door.

Business News

Elon Musk Isn't Suing ChatGPT-Maker OpenAI Anymore

His decision comes one day after criticizing OpenAI's new partnership with Apple.

Business News

This U.S. Summer Hotspot Will Now Require Beachgoers to Make a Reservation

If you want to visit Sand Harbor State Park in Nevada, there's a list.

Growing a Business

A 10-Acre Plant Store, 'Once Worn' Wedding Dresses, and a James Baldwin-Inspired Bookstore: America's 15 Most Beloved Mom and Pop Shops

If you're looking to buy local, these independent businesses offer a thoughtful curation of items that makes shopping a true experience.