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Arizona’s high court upholds new Phoenix airport Uber, Lyft fees

(Getty Images Photo/Scott Olson)

PHOENIX – The Arizona Supreme Court on Thursday issued a ruling upholding the implementation of controversial Uber and Lyft fees at Phoenix Sky Harbor International Airport.

The court unanimously ruled that the new rideshare fees do not violate the state constitution.

The fees were scheduled to go into effect Feb. 1, but the city agreed to delay their implementation until after the Supreme Court ruled. A city spokesperson said the fees would go into effect May 1.

Mayor Kate Gallego, a proponent of the increase, said she expected to win the case but wasn’t expecting a unanimous decision, which she called “a strong vote of confidence.”

“The law is very clear that cities do have the ability to set fees to access our properties,” she told KTAR News 92.3 FM.

“More than 1,000 companies operate at Sky Harbor Airport and pay fees, so it was important that rideshare companies also participate in this.”

Gallego said Sky Harbor had been the third busiest in the country, but traffic is down 85% as air travel has plummeted during the coronavirus outbreak.

“We need everyone who does business there to participate in the recovery at the airport from COVID-19,” she said. “The financial impact is devastating and we want people who are profiting off business at the airport to help us recover.”

On Jan. 21, Arizona Attorney General Mark Brnovich filed an action asking the state’s highest court for a ruling on the constitutionality of the fees. He argued the plan approved twice by the Phoenix City Council violated a voter-approved amendment banning new taxes or tax increases on services.

The city, meanwhile, maintained that the plan approved Dec. 18 is legal, saying the fees are a charge for property use, not taxes.

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, should they continue to serve the airport, do decide 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.

Councilman Sal DiCiccio, a staunch opponent of the plan that passed by a 7-2 vote (twice, after a procedural error the first time), called Thursday’s ruling “a major disappointment.”

“At the end of the day, this ruling and what the city of Phoenix is going to do with it is going to end up sticking it to the middle class and the ones that can barely afford it,” he told KTAR News’ The Mike Broomhead Show.

DiCiccio said he hopes the city reevaluates its intention to implement the fees at this time. He also said he’s reaching out to the rideshare companies in an effort to keep them serving the airport.

Council members Thelda Williams and Debra Stark released a joint statement calling Thursday’s ruling “good news,” and Michael Nowakowski said he was “pleased” with it.

KTAR News 92.3 FM’s Taylor Kinnerup contributed to this report.

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