Uber planning to pull services at PHX if City Council approves rate hikes

PHOENIX — Rideshare giant Uber told Phoenix City Council they will cease operations at Phoenix Sky Harbor if recommended ground transportation increases for the airport are approved.

In a letter sent by Uber to Phoenix Aviation Department director James Bennett, the company said they will make their decision based off a re-vote scheduled for Dec. 18 that would approve rate hikes on rideshare companies.

“If the Phoenix City Council approves the ground transportation fee structure currently recommended by PHX, Uber will be forced to cease operations at Phoenix Sky Harbor Airport effective January 2020,” the letter said.

Rate hikes for Uber and Lyft were set in a 7-2 vote by the City Council in October. In November, Lyft announced plans to cease operations at the airport beginning in January as well.

“In what can only be described as a Waterloo moment for Phoenix politicians, Phoenix is about to be known as an anti-business city,” Councilman Sal DiCiccio tweeted on Saturday.

Based on the proposal voted on in October, the $4 fee would increase by a quarter each year, reaching $5 in 2024.

The new fees were designed in part to reduce the number of vehicles at the terminals and encourage use of the free Sky Train.

Ride-hailing services now represent 70% of the commercial traffic at the airport, according to an aviation department press release sent out after the October vote, up from 9.3% in 2016.

In a Nov. 6 letter to Lyft, following the company’s decision, Bennett wrote that the fees aren’t necessarily a burden to customers because they were intended to be absorbed by the companies, not passed on.

The Oct. 16 vote was 7-2 in favor of the rate hikes. Vice Mayor Jim Waring and DiCiccio gave the two no votes.

A chart outlining the yearly progression of the recommended hikes can be seen below:

In the letter, Uber asks for another opportunity to negotiate with the city to continue the seven-year partnership Uber has shared with Sky Harbor, with four days remaining until the decisive City Council vote.

“I am writing to you to once again reiterate our willingness to work with you and your staff to identify a better solution that does not unfairly target those who rely on ridesharing,” Uber global airport partnerships manager, Chris Garcia said.

The October vote included several other provisions concerning airport transportation.

All commercial transportation using zero-emissions vehicles would receive a 40% discount in airport fees.

Additionally, the maximum fine for leaving a vehicle at an airport curb was raised to $250 plus a $500 public nuisance penalty.

Ride-hailing operators, which have been using designated areas at the airport since 2016, would be able to use remote locations if they want to avoid the new fees.

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