Ride-hailing giant Lyft has filed a lawsuit against the city of San Francisco, claiming it was unfairly charged over $100 million in taxes over a five-year period. According to a report by Bloomberg, the lawsuit centers around the city's classification of money earned by Lyft drivers as company revenue, which Lyft argues is incorrect.

In its complaint, Lyft maintains that its drivers are not employees, but rather customers who use the platform to offer ride-hailing services. As such, the company claims that its revenue comes from fees paid by drivers, not from charges paid by riders to drivers. This distinction is crucial, as it determines how Lyft's income is taxed.

This lawsuit is the latest development in a long-running debate over how gig economy companies like Lyft, Uber, and DoorDash should classify their drivers. The issue has significant implications for the companies' tax liabilities, as well as their obligations to provide benefits to drivers. Last summer, the companies scored a major victory when the California Supreme Court upheld Proposition 22, which allows them to classify drivers as independent contractors rather than employees.

By classifying drivers as independent contractors, gig economy companies are not required to provide them with full employee benefits, such as health insurance, paid time off, and minimum wage guarantees. This has sparked controversy and criticism from labor advocates, who argue that the companies are exploiting their drivers by denying them these basic rights.

The lawsuit against San Francisco has significant implications for the gig economy as a whole. If Lyft is successful in its claim, it could set a precedent for how cities and states tax gig economy companies. On the other hand, if the city prevails, it could lead to a re-evaluation of how these companies classify their drivers and their tax obligations.

The outcome of this lawsuit will be closely watched by the tech industry, labor advocates, and policymakers alike. As the gig economy continues to grow and evolve, the question of how to classify and tax these companies will remain a contentious issue. Lyft's lawsuit against San Francisco is just the latest chapter in this ongoing debate.