Uber backs off threat to stop Phoenix airport service when fees start May 1

PHOENIX – Joining ride-hailing counterpart Lyft, Uber reversed course from previous statements and said it will continue serving Phoenix Sky Harbor International Airport after new fees go into effect next week.

An Uber spokesperson confirmed the decision to KTAR News 92.3 FM on Friday but declined further comment, saying the company would discuss the situation further at a later time.

On Monday, Lyft acknowledged that it would continue serving Sky Harbor after the new fee structure begins May 1.

Both companies threatened to stop doing pickups and drop-offs at Arizona’s largest airport after the Phoenix City Council approved a rate hike for transportation network companies – better known ridesharing or ride-hailing services.

Despite vocal opposition from some quarters, the City Council voted 7-2 on Dec. 18 to impose the fees.

The fees were initially scheduled to go into effect Feb. 1, but the city agreed to delay them until legal challenges were resolved.

On April 2, the Arizona Supreme Court issued a unanimous ruling that the plan did not violate the state constitution.

The state’s highest court rejected state Attorney General Mark Brnovich’s argument that the fees were prohibited under a voter-approved amendment banning new taxes or tax increases on services.

The city maintained all along that the fees are a charge for property use, not a form of taxation.

The plan will start by charging ride-hailing companies $4 for curbside pickups and drop-offs. The rate would increase 25 cents a year until hitting $5 in 2024.

It 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. As they’ve done with the existing fees, the companies are expected to pass the expense along to riders.

All fees in the plan will apply at a 30% lower rate to pickups and drop-offs at the 44th Street PHX Sky Train station and the 24th Street station under construction.

The city has said the plan was designed in part to reduce the number of vehicles at the terminals and encourage use of the free Sky Train. It’s also intended to cover transportation infrastructure costs at the airport.

When the plan was first approved, the Phoenix aviation department said Uber and Lyft made up 70% of Sky Harbor’s ground traffic.

The City Council actually voted in favor of the plan twice. A revote was required because of an administrative error before an Oct. 16 passage.

In January, Uber sent the airport a letter saying the company would cease Sky Harbor service if the fees were imposed as initially planned in February.

Lyft sent a letter with a similar threat in November but announced an about face earlier this week.

“While we remain concerned about parity across ground transportation modes and affordability, particularly during this challenging time, our full focus is on the safety of our riders, drivers, and team members,” Lyft said in a statement to KTAR News on Monday.

“We will continue to operate at Phoenix Sky Harbor Airport to provide travelers with access to reliable transportation and earning opportunities for drivers.”

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

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