Phoenix agrees to delay disputed airport ride fees during legal challenge

PHOENIX – Facing a legal challenge and other opposition, the city of Phoenix decided Wednesday to hold off on implementing new fees on Uber and Lyft rides at Sky Harbor International Airport.

Earlier in the day, the City Council met in an executive session to discuss Arizona Attorney General Mark Brnovich’s challenge to the fees, which had been scheduled to go into effect Feb. 1.

“After today’s meeting, the city had a teleconference with the Arizona Supreme Court and the city voluntarily agreed to delay the effective date of the fees until after the Supreme Court makes its decision,” Phoenix spokeswoman Julie Watters said in a statement.

The about-face came a day after Brnovich filed a special action asking the Arizona Supreme Court to rule on whether the fees would violate the state constitution, as he believes is the case.

Brnovich also had requested an order preventing the city from implementing the fees until a ruling is made on their constitutionality. The request for a stay was rescinded after the city agreed to wait.

Brnovich called the city’s decision to reverse course “a win for consumers.”

“I think it maybe dawned on the mayor and other Council folks that this is really serious, and it was not only an unconstitutional tax, it was dumb,” he told KTAR News 92.3 FM’s Arizona’s Morning News on Thursday.

The city will file a response to Brnovich’s special action by Feb. 18, according to a letter from City Attorney Cris Meyer posted to social media by Councilman Sal DiCiccio, a vocal fee opponent. The state will reply to that response by March 3.

The Supreme Court will then decide whether to make its decision based on the briefs or wait to hear oral arguments, which probably wouldn’t occur until late April or May.

Last week, Brnovich issued a report saying he believes the fee plan “very likely” violates the state constitution, leading to this week’s court filings. He believes the fees violate a voter-approved amendment banning new taxes or tax increases on services.

“Obviously the city of Phoenix officials have agreed, at least internally, that this is a valid argument and they’re afraid to lose this case,” DiCiccio told KTAR News 92.3 FM on Wednesday. “Otherwise they never would have caved.”

DiCiccio said he recused himself from Wednesday’s executive session, and any other related “back-room discussions,” because he’s publicly stated he’d be willing to testify against the city in the case.

The city, meanwhile, continues to maintain that the plan approved by a 7-2 vote Dec. 18 is legal, saying the fees are a charge for property use, not taxes.

Mayor Kate Gallego, who’s been pushing for the fees, called the plan “smart” and “legal” in response to Brnovich’s report.

Brnovich has said Phoenix potentially could lose up to $20 million in state funding as a consequence for disregarding state law.

The city’s plan calls for implementing $4 charges for curbside pickups and drop-offs by “transportation network companies” such as Uber and Lyft. The rate would increase 25 cents a year until hitting $5 in 2024.

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

Uber and Lyft have been operating at the city-owned airport with $2.66 fees for pickups and no charge for drop-offs. It would be up to the companies whether to absorb higher costs or pass them on to riders.

The ride-hailing companies have been saying they would end Sky Harbor service if the fees went into effect.

In a letter made public earlier Wednesday, Uber gave official notice that it would cease operations at the airport Jan. 31 at 11:59 p.m. if the fee plan went into effect as scheduled.

After the controversial fees were approved, state Rep. Nancy Barto filed an SB 1487 complaint to Brnovich’s office. That impelled the attorney general to investigate the constitutionality of the fees, leading to last week’s report.

KTAR News 92.3 FM’s Peter Samore contributed to this report.

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