Legally Speaking: Phoenix City Council has viable argument for rideshare fee

Jan 13, 2020, 8:17 AM | Updated: 8:25 am

(AP Photo)...

(AP Photo)

(AP Photo)

I hate to say it, but I think they will win.

Since October, KTAR News 92.3 FM’s Larry Gaydos and I have been railing against what he calls the “evil Phoenix City Council” about its decision to charge a fee on all Uber and Lyft rides to and from the airport.

Unfortunately, after reading the letter written by attorney Jean-Jacques Cabou to Attorney General Mark Brnovich, I believe the council has a leg to stand on.

Back in October 2019, the Phoenix City Council voted 7-2 to impose pickup and drop-off fees on all rideshare trips to and from Sky Harbor.

After the vote, Lyft threatened it would no longer operate at the airport if the fees were actually imposed.

The public found out the vote had to be redone because some technical requirements were not met with the vote. As such, the revote was scheduled for December.

For two months, Lyft, and eventually Uber, tried to negotiate with the council and others tried to convince the council not to vote for the increase.

The Goldwater Institute even informed the council the fee would be unconstitutional and a lawsuit could result. Nothing worked.

The Phoenix City Council stood its ground. At the December vote it again approved the fees 7-2.

Opponents claim the fee is really an illegal “tax” or surcharge and cite to Proposition 126.

Passed in November 2018, Proposition 126 added language to the Arizona Constitution and, according to the letter, “prohibits cities from imposing or increasing (1) ‘any sales tax,’ (2)’transaction privilege tax,’ (3) ‘luxury tax,’ (4) ‘excise tax,’ and (5) ‘use tax.’”

It also states that cities “shall not impose or increase any…other transaction-based tax’ or ‘fee’ … on the privilege to engage in … any service performed in this state.”

The letter makes numerous arguments that attempt to show the action taken by the council is legal.

Here, I address the two most influential ones.

First, it points out the city is entitled to operate the airport as a private business. Just like a private business, it is allowed to make money off of others using its property.

In other words, it is allowed to take a cut.

Rideshare companies like Uber and Lyft use the airport roads and curbs to make money and the airport is entitled to have a share of that income.

Just like every restaurant and store in the airport has to pay rent to use the airport property, the rideshare companies should have to pay rent for the time they use the roads and curbs.

This amounts to a substantial amount of money since they account for two-thirds of all ground transportation pick-ups at the airport.

Second, Uber and Lyft agreed to pay the fees. “Like all other transportation providers, [Uber and Lyft] are required to have permits to operate at the [a]irport.”

As part of obtaining that permit, they contractually agreed to pay the fees. So, it would be a breach of contract to now refuse to make that payment.

Regardless of the two strong legal arguments above, I, like many, do not like the fees.

It will be a $4 fee per drop-off and per pickup at the airport. No, not $4 total, but $4 each way.

This is more than what cabs and buses have to pay for the same roads and curbs and I think they should all be the same. Unfortunately, #legallyspeaking, the arguments in this letter are strong and will be hard to overcome.


Monica Lindstrom

(AP Photo/Eric Gay, File)...

Monica Lindstrom

Legally Speaking: Arizona remains in state of confusion regarding abortions

Eventually, Arizona will have clarity on abortion law. For now, KTAR legal expert Monica Lindstrom says it is in a state of confusion.

2 years ago

(AP Photo/Jose Luis Magana)...

Monica Lindstrom

Legally Speaking: Abortion no longer a constitutional right, states to make decision

Roe and Casey are overturned. There is no longer a constitutional right to abortion. However, the question of whether an abortion is legal has reverted back to the states for each of them to decide on their own.

2 years ago

(AP Photo/Jose Luis Magana)...

Monica Lindstrom

Legally Speaking: It will come down to the states, not Supreme Court, to rule on abortion legality

The issue of whether an abortion will be legal and any rules regarding it will revert back to the states, not the Supreme Court, for each of them to decide on their own, writes Monica Lindstrom.

2 years ago

Arizona State Courts Building (Arizona Governor's Office Photo)...

Monica Lindstrom

Legally Speaking: Brnovich appeal to Arizona Supreme Court makes sense

KTAR legal analyst Monica Lindstrom thinks it's a good move by Attorney General Mark Brnovich to petition the Arizona Supreme Court to hear his appeal in a case about laws that were ruled unconstitutional.

3 years ago

(File Photo by Matthew Hatcher/Getty Images)...

Monica Lindstrom

Legally Speaking: Why judge rejected Arizona ban on mask mandates

KTAR legal expert Monica Lindstrom explains the reasons behind a judge's decision to strike down Arizona's ban on face mask mandates.

3 years ago

(Facebook File Photo/Phoenix Police Department)...

Monica Lindstrom

Legally Speaking: Police may need to be part of Phoenix oversight office

Phoenix's requirement that no current or former law enforcement be part of a new police oversight office appears to be in direct conflict with recently signed Arizona laws, writes KTAR News legal expert Monica Lindstrom.

3 years ago

Sponsored Articles


Day & Night Air Conditioning, Heating and Plumbing

Beat the heat, ensure your AC unit is summer-ready

With temperatures starting to rise across the Valley, now is a great time to be sure your AC unit is ready to withstand the sweltering summer heat.


Midwestern University

Midwestern University Clinics: transforming health care in the valley

Midwestern University, long a fixture of comprehensive health care education in the West Valley, is also a recognized leader in community health care.


Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

Legally Speaking: Phoenix City Council has viable argument for rideshare fee