Legally Speaking: Uber/Lyft airport fees decision still up in the air
The battle is on.
Arizona Attorney General Mark Brnovich has spoken and believes the Phoenix City Council’s decision to impose fees on pick up and drop offs at the airport by all transportation network companies, such as Uber and Lyft, “may violate the Arizona Constitution…” and Brnovich will “expeditiously seek relief from the Arizona Supreme Court…” because “it is the Arizona Supreme Court’s ‘responsibility ‘to resolve the issue.’’
Previously, I explained why the Phoenix City Council believes it has the power to impose fees on Uber and Lyft and why it believes it does not violate the Constitution and the voter approved Prop 126.
Here I will explain the AG’s opinion, which is just the opposite.
The AG starts his argument by explaining there are issues with the interpretation of Proposition 126, its inclusion in the Constitution and the definition of words within it. Since it is a new amendment to our Constitution there hasn’t yet been any judicial interpretation of it so the Court needs to do so.
Article IX, Section 25 of the Arizona Constitution (formerly Prop 126) “states, in relevant part, that ‘any…city…created by law with authority to impose any tax, fee,…or other assessment, shall not impose or increase any…transaction-based…fee…on the privilege to engage in…any service performed in this state.’” The amendment also states that no city can trump this power.
The AG first argues the Phoenix city ordinance here defines the charge as a “drop-off” and “pick-up” fees. As such, Phoenix itself calls the charges “fees.” In addition, the fees are “transaction based.”
Under the Constitution, no new fees are allowed and “transaction-based” fees are not allowed.
Second, the trip fees are, in fact, “imposed” and are not voluntary. The Phoenix ordinance mandates that every TNC that goes or leaves the airport with a client pay the fees.
So, even if Uber and Lyft had to obtain a permit from the airport and by doing so they “agreed” to the fees, the fees are still mandatory just like the permit is.
There is no voluntary part involved. If they want to operate at the airport, they need the permit and they need to pay the fees.
Third, the Phoenix ordinance not only imposes fees but it also increases the fees. The Constitutional amendment, added by the people as Prop 126, prohibits increases as well.
Fourth, Phoenix argues the fees are appropriate because Uber and Lyft use the curb space and the airport roads, which are very valuable pieces of property. The AG argues the Phoenix ordinance itself “does not support a conclusion that the ‘trip fees’ are based on the companies’ “use” of curb space.
Nothing in the ext of the ordinance suggests that the trip fees are “use” or facility-related fees. To the contrary, they are “pick-up” and “drop-off” fees, two categories of “trip fees” — that are imposed when passengers are transported to and from the airport.
Lastly, Phoenix argues it is allowed to charge the fees under its authority given by law to “set fees for companies to access and use the city-owned airport.” The AG points out the plain language of Phoenix’s ordinance itself states “trip fees” are not imposed for access or use, instead they are based on “drop-offs” and “pick-ups.”
The city of Phoenix, through its city council, passed a law imposing the trip fees against TNCs such as Uber and Lyft. It has explained, quite well, why it believes it’s action is legal and does not violate the Constitution.
The city has made some very strong legal arguments that it is not willing to back down on.
In response, the Arizona Attorney General has fired back with all the reasons why Phoenix is wrong. The AG has also made some very strong legal arguments.
This is the exact reason why we have the Arizona Supreme Court. Since the Arizona Constitutional Amendment (Prop 126) is new and the Phoenix ordinance is new, and there is no consensus on what they each mean, our Supreme Court must make the decision. This is why they are paid the big bucks is what I like to say.
#LegallySpeaking my crystal ball is murky on this one. I believe it could go either way. I, like most residents, want the fees to go away. The citizens have spoken, both with Prop 126 and the outrage that came with the passing of the ordinance. Now we just have to wait to see what our Supreme Court says.