Decision Coming In Uber, Lyft Vs. Phoenix Sky Harbor Airport
A decision is expected this week that could impact the future of Uber and Lyft operations at Phoenix Sky Harbor International Airport.
Arizona’s attorney general has until Friday to issue a decision about a complaint filed by State Rep. Nancy Barto. She alleges city-approved fees for picking up and dropping off airport passengers violates a provision in the state constitution that bars new taxes and fees on services.
In a Dec. 17, 2019, media release Barto said, “I've filed a SB 1487 complaint to have the Arizona Attorney General’s Office investigate this disregard of the voter-approved constitutional amendment prohibiting cities from imposing new fees or taxes on services or increasing existing ones.”
The SB 1487 complaint requires the attorney general to investigate alleged violations of the Arizona Constitution or state law. In 2018, Arizona voters approved Proposition 126, which amended the constitution to ban cities from imposing new or increased fees and taxes on services.
Phoenix argues the Arizona Constitution does not prohibit fees on businesses using the airport. The airport does not receive tax revenue and is considered self-sustaining meaning its bills are covered by rent and fees paid by airport users.
The city says the fees cover the use and maintenance of city property and just as the city charges airlines, retailers and restaurants to use airport space, it also charges ridesharing companies. According to Sky Harbor, when rideshares began operating at the airport in June of 2016, they represented 9.3% of the commercial business. Today, they represent 70% of the commercial traffic.
In the past, Uber and Lyft have criticized the new fees as an unfair burden on ridesharing companies paying for a train. PHX Sky Train operations currently eliminate buses that move people between terminals and take people to the economy parking lot. In the future, the train will eliminate more buses when it is able to take people to a new rental car facility. Airport officials have said reducing and removing buses alleviates congestion for curbside transportation companies.
Uber and Lyft previously said they would cease operations in January. The new fees, which are part of an overhaul of fees for all commercial ground transportation, kick in Feb. 1, 2020. The new fees offer two options for rideshare providers:
A $2.80 drop-off and pick-up fee at the PHX Sky Train
- A $4 drop-off and pick-up fee at the terminal curb.
Below is a Jan. 14, 2020, statement from city of Phoenix along with its full letter submitted to the Arizona Attorney General's Office.
As requested by the Arizona attorney general, the city of Phoenix has provided additional information and background on its decision to increase the fee for rideshare companies who make a profit by using Phoenix Sky Harbor International Airport. A summary of the city's position includes:
First, "trip fees" are not a tax on services. Second, the proposed trip fees to be paid when rideshare vehicles pick up or drop off passengers at Sky Harbor are not unconstitutional. Arizona's constitution has always protected the rights of cities like Phoenix to own and manage property. The airport is city property, and trip fees are charged to commercial businesses to use the city's property to conduct business for profit using Sky Harbor. All companies who use Sky Harbor to conduct business for profit, including airlines, restaurants and retail, must pay to do so, and rideshare companies are no different.
Finally, Prop 126 says that cities can't create certain new taxes; it doesn’t say cities can't charge fees to those who access and use their property. It is important to remember, these fees do not apply anywhere other than the city-owned airport; they apply only to rideshare companies who choose to do business at Sky Harbor. The city believes if rideshare companies want to profit from their use of the airport's valuable infrastructure and from their access to the airport's property, it is only fair that these companies pay their share of the costs required to maintain it, just like airlines do.
The city respects the attorney general’s process and awaits a response.