Lyft Sues San Francisco Over $100 Million Tax Bill, Says Payments To Drivers By Passengers Misclassified

Lyft Inc. LYFT filed a lawsuit against San Francisco, accusing the city of overcharging the ride-hailing services company by $100 million in taxes from 2019 to 2023.

Lyft argues that the city has misclassified the payments made by passengers to drivers as company revenue, which is not how Lyft operates, reported Bloomberg on Tuesday.

According to the company, Lyft generates revenue through fees paid by the drivers, not passenger payments, aligning with the U.S. Securities and Exchange Commission’s treatment of driver compensation.

The dispute highlights ongoing challenges within the gig economy, as companies like Lyft and Uber Technologies Inc. UBER face scrutiny over their contractor models. Lyft seeks refunds, including penalties and interest, for the overcharged taxes.

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