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Uber Technologies Inc. is suing the San Francisco Treasurer & Tax Collector’s office, arguing their subpoena for the names of thousands of drivers on city streets violates privacy rights.
Business license taxes are due when a vehicle-for-hire drives San Francisco streets for seven days a year. San Francisco in February sent Uber a subpoena to discover who’s behind the wheel to ensure the drivers have business licenses.
The city seeks information about trips made in San Francisco from July 2016 to March 31. But the transportation network company argues the demand for drivers’ names, addresses, license numbers and locations driven within San Francisco is “improper and unreasonable” ( Uber Tech., Inc. v. City and Cnty. of San Francisco Office of the Treasurer-Tax Collector , Cal. Super. Ct., petition to quash subpoena filed 5/2/17 ).
The request exceeds the tax collector’s authority, violates the Fifth Amendment takings principles and violates drivers’ privacy rights, the company said in a May 2 petition in California Superior Court.
Generally speaking, states and localities still are in the nascent stage of adapting their regulations, and tax laws, to the growing transportation network company market. For ride-hailing services such as Uber and Lyft, only eight states require sales tax collection from the vendors.
The petition is the latest in an ongoing fight with San Francisco over its regulation of ride sharing companies, and was filed one day before a California legislative committee approved a bill that would allow drivers to obtain a single business license to operate anywhere in California. S.B 182, which passed the Senate Governance & Finance Committee May 3 and now heads to the Senate Judiciary Committee, prohibits disclosing personal information, including posting the information online.
“We need to be able to enforce our tax laws fairly, and if they’re going to have 50,000 independent contractors using our streets, we need the information” just as with every other business, Amanda Fried, policy and legislative manager in the Treasurer & Tax Collector’s office, told Bloomberg BNA.
Uber agrees with San Francisco’s assessment that drivers are independent contractors, Wayne Ting, Uber’s San Francisco general manager, said in a statement.
“But the Tax Collector’s office is asking us to give them personal information of drivers—including their home address—without their consent and will put that information on a public website. We’ve asked the city to allow us to get the consent of drivers and to remove their personal information from the public website, but they have refused.”
California cities and counties, preempted by the state from regulating TNCs such as Uber and Lyft Inc., are turning to the humble business license tax to assert control.
“Uber’s suit is nothing but an attempt to circumvent tax laws that apply to all businesses,” San Francisco Treasurer José Cisneros said in a tweet.
“We have all the enforcement power we need in the charter, and we’re using it,” Fried said May 2.
A Lyft representative didn’t immediately respond to a request for comment.
“Of course it’s not surprising that Uber decided to sue its hometown of San Francisco. Apparently that seems to be the trend lately as we saw with the lawsuit that Airbnb brought against the city” for an ordinance regulating Airbnb Inc. and other short-term rental platforms, Supervisor Aaron Peskin said during the board’s May 2 meeting.
“But I think corporations should take note of the writing that is on the wall—you cannot circumvent laws that are designed to protect the public safety and ensure a fair marketplace,” he said.
Peskin commended Cisneros “for standing up to the legendary bullying tactics of Uber,” which he said “asked for special treatment at every step of the process.”
The board April 4 approved a resolution urging the Legislature to amend the California Vehicle Code and Public Utilities Code to enable local jurisdictions to access TNC trip data. The unanimously adopted resolution urged state lawmakers to permit local enforcement “to ensure safety and disability access, and manage congestion.”
Supervisors unanimously approved March 14 a resolution calling on the District Attorney to investigate ride-hailing companies for programs that circumvent enforcement and more broadly unfair business practices.
To contact the reporter on this story: Joyce E. Cutler in San Francisco at JCutler@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
Text of Uber's petition is at http://src.bna.com/osW.
Copyright © 2017 Tax Management Inc. All Rights Reserved.
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