Lyft's lawsuit contends San Francisco's $100 million tax calculation misrepresents their revenue by including passenger payments, which inflate the actual receipts from their business model.
Lyft argues that its business draws revenue from driver payments, not passenger fares, stating that 70% of passenger payments go to the drivers, highlighting a fundamental misunderstanding in the city’s tax assessment.
According to Lyft's filing, drivers are regarded as customers, and thus their fees should not be included in determining Lyft's taxable receipts; this represents a significant legal and financial distinction.
The lawsuit underscores broader controversies surrounding the gig economy, particularly in relation to how driver classification affects taxation and operational costs for companies like Lyft.
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