Lyft's lawsuit argues that San Francisco’s tax model assesses taxes based on rider payments instead of driver fees, leading to excessive tax liability for the company. "For each of the tax years in issue (2019, 2020, 2021, 2022 and 2023), either the City erroneously assessed or Lyft overreported Lyft's [gross receipts tax] and [homelessness gross receipts tax] based on the amounts the Rider pays to the Driver for transportation services."
Lyft claims the city taxed the total ride payments, which inflated its tax bill significantly. "... Driver compensation should not be included in Lyft's taxable gross receipts under the City's GRT and HGRT."
In a recent statement, Lyft reiterated its commitment to San Francisco while stressing the need for fair tax practices. "We don't take operating in San Francisco for granted and will continue to connect riders and drivers there, but the company filed the lawsuit to rectify what it views as an incorrect tax calculation."
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