Though you might think of Uber and Lyft drivers as employees of those ridesharing services, the companies maintain that drivers are independent contractors who simply use the Uber or Lyft platforms to connect with passengers. That now means that several thousand of these independent operators in San Francisco must each obtain a business license.

The San Francisco Chronicle reports that the new requirement will affect about 37,000 Lyft and Uber drivers who work seven or more days per year in the city.

Under the system, drivers will pay $91 each year if they earn $100,000 or less from driving. Drivers who have been operating with the companies for multiple years will be required to pay a registration fee for the time period they didn’t obtain licenses.

City treasurer Jose Cisneros will send letters to drivers stating that they have been identified as an operator for Lyft and Uber and that they must obtain the registration certification within 30 days, the Chronicle reports.

Drivers who fail to obtain the license but continue to drive could face penalties.

“We have a very broad and comprehensive business registration requirement,” Cisneros tells the Chronicle. “This has been a law that has been around for many years. It’s very clearly spelled out on our website — the law here in San Francisco requires you to register your business with the city. If they missed that requirement, they are still obligated to do that.”

Cisneros says he doesn’t believe that all the drivers who will receive letters are still working for the company. However, if they are, he estimates the city will bring in $3.37 million annually in registration fees.

While the city — which is home to the headquarters of both Uber and Lyft — isn’t explaining its motivation to remind drivers of the business-licensing requirement, it likely involves the ongoing debate over whether or not these drivers are employees or independent contractors.

A spokesperson for Uber tells the Chronicle that it partners with “entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements.”

Lyft, on the other hand, says it opposes the city’s plan.

“People in San Francisco, who are choosing to drive with Lyft to help make ends meet, shouldn’t have to compromise their privacy in order to share a ride,” the company says of the city obtaining driver information.

SF to require Lyft, Uber drivers to obtain business licenses [The San Francisco Chronicle]

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