Arizona AG: Uber/Lyft fee at airport ‘very likely’ violates state constitution

PHOENIX — Phoenix City Council hit a roadblock Thursday when it comes to charging higher fees on ride-hailing pickups and drop-offs at Sky Harbor Airport, but it’s not over yet.

Arizona Attorney General Mark Brnovich issued a report saying he believes the Council’s plan “very likely” violates an amendment to the state constitution.

He told KTAR News 92.3 FM’s Bruce St. James & Pamela Hughes Show on Friday that his office will file a special action with the Arizona Supreme Court on Tuesday to strike down the plan.

Brnovich said his office will also will seek a stay on the plan to stop any fees from being collected until the court can review it.

“We want the court to not only declare it unconstitutional … but we also want the court to stop it from going into effect on Feb. 1,” he said.

Mayor Kate Gallego, who’s been pushing the fee proposal, issued the following statement, calling the plan “smart” and “legal” and implying that Brnovich succumbed to “political pressure”:

The Phoenix approach of ensuring that companies profiting from the airport pay their fair share is smart – and legal. This fee is no different from the fee every other vendor has paid at our airport since its creation. Lyft and Uber have been paying access fees since they began operations at Sky Harbor, the same fees they pay at most every other airport of our size. As our response demonstrated, and as AG Brnovich’s report acknowledges, Arizona state law gives cities the right to condition commercial access to airports with the payment of a fee.

Despite this being the law of the land, political pressure has led the AG to punt this issue to the Arizona Supreme Court. Phoenix Sky Harbor is one of the best airports in the nation and an incredible economic driver for our entire state. We refuse to allow state officials playing politics to condemn its success.

Critics of the fee plan have said it violates a constitutional amendment approved by voters in 2018 that bans new taxes or tax increases on services.

“When Arizona voters clearly spoke and said that they didn’t want cities passing anymore fees … onto people doing business, they spoke loudly,” Brnovich said.

“Until a court determines otherwise, you’re not going to get any sort of changes.”

Councilman Sal DiCiccio, a staunch opponent of the proposal throughout the process, praised Brnovich for his decision.

“What the City Council did was an aberration, it was wrong, it was an attack on the middle class,” DiCiccio told KTAR News.

The city, however, isn’t backing down.

J. Cabou, Phoenix legal counsel, said the city has the constitutional right to charge for use of its property.

“There shouldn’t be a free ride for ride-share companies or for anybody else, and if restaurants have to pay to do business at the airport, and other concessionaires and shops have to pay to sell their goods at the airport, then there’s no reason why the ride-share companies shouldn’t have to pay that access and that use fee as well,” he told Gaydos in the Afternoon.

After the controversial fees were approved in December, state Rep. Nancy Barto filed an SB 1487 complaint to Brnovich’s office.

The north Phoenix Republican’s complaint required the attorney general to investigate the constitutionality of the fees and make a determination within 30 days.

Barto was pleased with Thursday’s developments.

“The attorney general’s thorough report makes clear that the ride-share fees that Phoenix intends to impose at Sky Harbor Airport violate the constitutional prohibition on new or increased service fees and taxes,” she said in a press release. “I am confident that the Arizona Supreme Court will agree.”

The Goldwater Institute, which has also urged the city to drop the plan due to conflict with the constitution, called Brnovich’s report an “excellent outcome outcome for ride-sharing drivers, passengers, and the many visitors to this state.”

Brnovich said the city could lose up to $20 million in state funding if it attempts to move forward with the fees despite the legal challenge.

“If you are a city and you thumb your nose at state law … there has to be consequences,” he said.

“And so the mechanism that was put into place was that if cities blatantly violate or disregard state law, they lose their share of state revenue.”

Uber and Lyft have threatened to pull service from the airport if the fees went into effect, and there’s been no indication they’d change course.

Under the plan, ride-hailing companies would be charged $4 for curbside pickups and drop-offs beginning Feb. 1, 2020. The rate will increase 25 cents a year until hitting $5 in 2024.

Uber and Lyft have been operating at the airport with $2.66 fees for pickups and no charge for drop-offs.

The new plan also raises fees for other modes of commercial ground transportation at the airport.

KTAR News 92.3 FM’s Ashley Flood contributed to this report.

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