Ride-hailing company refusing to obey a law that every other business in San Francisco has to follow
SAN FRANCISCO (May 11, 2017) — City Attorney Dennis Herrera today filed a lawsuit seeking a court order to compel ride-hailing company Uber to provide business records to ensure its drivers are following the law.
“This case is straightforward,” Herrera said. “The law requires any business in San Francisco to register with the Treasurer and Tax Collector’s Office, whether they’re PG&E or a hairdresser. Uber and its drivers are no different. San Franciscans have a right to know who is behind the wheel when they’re being driven somewhere. Not surprisingly, Uber is thumbing its nose at the law. It’s time for that to stop. Their argument that this is about their drivers’ privacy is a complete red herring.”
Starting in August 2014, the Treasurer and Tax Collector’s Office periodically requested information from Uber about its drivers to investigate compliance with the city’s business and tax code. Uber provided that data until December 2016, when it abruptly refused. On Jan. 26, 2017, Treasurer José Cisneros and Tax Collector David Augustine issued a subpoena to obtain the information. The subpoena was modified on March 20, 2017 at Uber’s request, but the company refused to comply and instead went to court May 1, 2017 trying to quash the subpoena.
“Once again Uber believes they are above the law,” Cisneros said. “If Uber is so concerned about the financial well-being and privacy of their drivers, I recommend they raise wages, convert the contractors to employees, or push for their driver’s inclusion in statewide licensing like limousine drivers. In San Francisco, 130,000 businesses play by our Business Registration rules — including thousands of contractors, caterers and other businesses who cross city lines each day.”
The petition filed in San Francisco Superior Court seeks a court order compelling Uber to comply with a subpoena from Cisneros’ office seeking information about the company’s drivers who operate in San Francisco, including their names and addresses. That will help determine whether Uber drivers doing business in San Francisco have obtained a Business Registration Certificate from the Treasurer and Tax Collector’s Office, which is required of any business that operates in the city.
Uber says it is refusing to turn over the information to protect its drivers’ privacy, even though all non-public data submitted in response to a subpoena is treated as confidential taxpayer data. Uber has steadfastly maintained that its drivers are independent contractors, not employees. As contractors, drivers who operate more than seven days a year in San Francisco are independent businesses required to obtain a Business Registration Certificate. Drivers typically pay a $91 annual fee for the certificate. Once a business is registered, information like the name of its owner and its business address is posted on a Business Registration Certificate, which must be posted in the place of business. The City also makes that information available on a city website so the public has basic information about the business.
It is important for Uber drivers who do business in San Francisco to register here, just as all other businesses operating in San Francisco are required to do, Herrera said. By registering, business owners provide consumers with access to basic information about their businesses. This allows consumers to verify that a business is operating legally and to contact business owners in the event of a dispute. There is no requirement for a business owner to list a home address. They could list a P.O. Box, for example.
“Being able to look up someone’s name and address is crucial for consumers, and it’s not a revolutionary idea,” Herrera said. “There used to be something called a phone book that did that. We are in this situation because Uber insists that its drivers are not its employees. Forcing drivers to become independent contractors means each is their own business. That’s a consequence of Uber’s drive to fatten its bottom line at the expense of the people doing the work.”
Pattern of Obstruction
Uber’s refusal to comply with the law is the latest in a pattern of obstruction. The company has refused to share information with the San Francisco Municipal Transportation Agency about its operations, tested self-driving cars on the streets of San Francisco without a state permit, and has fought calls by the SFMTA and the San Francisco International Airport for stricter criminal background checks on its drivers.
Ride-hailing companies like Uber — which have been officially termed transportation network companies, or TNCs — are regulated by the California Public Utilities Commission. This has limited the ability of cities to provide oversight.
These companies, though, create a significant burden on the existing transportation infrastructure. An estimated 45,000 TNC drivers operate commercially on the streets of San Francisco. This driver activity adds to the wear and tear on city streets. It also burdens law enforcement and other on-street enforcement staff due to the high volume of driver infractions, such as illegal u-turns, double parking, transit only lane violations, and stopping in bus zones.
San Francisco has limited access to TNC data locally, but a recent report on TNC activity in New York City indicates that, “TNCs accounted for the addition of 600 million miles of vehicular travel to the city’s roadway network over the past three years, after accounting for declines in yellow cab mileage and mileage in personal vehicles.” Similar to New York City, San Francisco is densely populated. It is also the birthplace of TNCs and a significant regional trip generator.
“Despite requests for TNC data, these companies have refused to work with San Francisco in our efforts to better understand the scope of their operations and to explore options to reduce additional traffic and other impacts on city streets,” said Ed Reiskin, SFMTA Director of Transportation. “While some people might approve of their services, no one likes to sit in even more traffic.”
Uber is now pushing legislation in Sacramento, Senate Bill 182, that would circumvent local business license requirements for ride-hailing companies creating a different set of rules for them compared to every other business.
The Treasurer and Tax Collector’s Office has sent about 57,000 notices to drivers of ride hailing companies to notify them of the business registration requirement. More than 19,000 drivers registered. Another roughly 12,000 responded they are no longer driving in San Francisco, already registered, or consider themselves employees.
“San Francisco has over 130,000 registered businesses, and every one — large or small — that operates here has to play by the same rules,” Cisneros said. “Publishing information about a business’s registration status is a fundamental consumer protection service — people who use a business have the right to know if that business is operating legally.”
The case is: City and County of San Francisco v. Uber Technologies, San Francisco Superior Court, CPF-17-515663, filed May 11, 2017. Additional documentation from the case is available on the City Attorney’s website at: https://www.sfcityattorney.org/.
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