Uber and Lyft said they are prepared to leave Sky Harbor International Airport after the Phoenix City Council voted 7 to 2 on Wednesday to approve an increase in ride-share fees for dropping off and picking up passengers, though neither company will say when.
The new fee of $4 per trip will go into effect on Feb. 1. The fee will increase by 25 cents each year, reaching $5 each way in 2024.
“The city of Phoenix will be driving out ride sharing from our airport. This is what is going to happen today,” said Councilman Sal DiCiccio, who opposed the proposal. He and Councilman Jim Warring were the two no votes on the measure.
“For a long time we have been subsidizing these corporations. They’ve been using our roads. They’ve been using our facilities,” said Councilman Carlos Garcia, who voted in favor of the measure.
“It’s time these corporations pay their fair share,” he said.
It was the second vote on the fees
This vote comes after a botched vote during the Oct. 16 meeting where the council also voted 7 to 2 to raise the fees. That vote was voided once it was discovered that the city did not post the proposed fee on its website for the amount of time required under state law.
The city blamed the mistake on a clerical error, reposted the proposal and scheduled a new vote for Dec. 18.
In the weeks following the first vote, both Lyft and Uber sent letters to the airport, the mayor and city council threatening to leave if the increase takes effect.
Piper Overstreet, representing Uber, reiterated that the company would leave Sky Harbor and urged the council to vote against the measure.
“We are and always have been supportive of paying our fair share. However, this proposal far exceeds what it costs the airport,” said Overstreet, who said Uber would still operate in Phoenix but not at the airport.
That spurred a contentious back and forth with Mayor Kate Gallego and council members who support the increase.
“Do you pay this fee at other airports,” Councilwoman Thelda Williams asked.
Overstreet said there were differences between the fees and cautioned against an apples to oranges comparison.
Gallego went through a list of nine airports that charge fees and asked Uber if serves those airports. Overstreet responded yes to each one.
How the fees will work
Currently, Uber and Lyft users pay a $2.66 fee to be picked up at Sky Harbor. There is no charge to be dropped off. Starting Feb. 1, the fee will be $4 per drop-off and pick-up.
The fee will increase annually:
- $4.25 in 2021.
- $4.50 in 2022.
- $4.75 in 2023.
- $5 in 2024.
You’ll pay less if your ride-share driver picks you up or drops you off at the PHX Sky Train station at 44th and Washington streets. If you opt for that you’ll pay $2.80 each way and ride the Sky Train shuttle to the terminals. Shuttles come every three to five minutes. The airport hopes offering this option will reduce congestion at the terminals.
What happens now?
Overstreet expressed disappointment in the vote.
“We were hoping that the city council would consider a more equitable fee increase. But they didn’t, as evidenced today,” Overstreet said.
She said Uber is prepared to stop serving Sky Harbor in January but she did not provide a date.
Lyft did not address the council before the vote but in an emailed statement, Lyft spokeswoman Lauren Alexander said:
“We are disappointed in the outcome of today’s City Council vote. Despite our best attempts to negotiate a more equitable solution Airport leadership has been opposed to reason. Given today’s vote, we plan to cease operations at Sky Harbor ahead of the fee implementation in order to prevent the unfair penalization of our drivers and riders. They should not have to shoulder the burden of the city’s budget shortcomings.”
Alexander said Lyft is still considering what date it would stop serving the airport.
Jon Riches from the Goldwater Institute told the council he believes the fee increase violates Prop.126, which was approved by Arizona voters last year.
Prop. 126 prohibits cities fromtaxing services. DiCiccio said the institute was looking at whether it could sue over the issue, and he is prepared to support that action as well as state legislation to address the fees.
City attorney Cris Meyer said he had conferred with outside counsel and did not believe the vote violated Prop. 126.
Fee on taxis, shuttles and buses
Taxis, shuttles and buses also currently pay fees to pick up passengers at to the airport. The vote will require them to pay a drop-off fee as well, but it reduces their fees overall. The new charge for a taxi is $1.75 each way, $2.25 for a shuttle and $5 for a charter bus. These services also face additional regulations that Uber and Lyft do not.
During the meeting, Aviation Director Jim Bennett said taxi companies bid competitively on contracts to serve the airport. In addition to the fees, those contracts require:
- Transportation operators can’t pass the fees on to customers.
- They must have a letter of credit.
- They must provide service 24 hours a day, seven days a week, 365 days a year.
- No one can wait longer than 5 minutes for pick-up.
- Fares are set by city code and surge pricing is not allowed.
- Rules for how quickly lost items are returned to riders.
- Vehicles must undergo inspections and meet age requirements.
- The use of alternative fuel vehicles.
- Drivers must pass a written test, an FBI check and a TSA threat assessment.
- The companies must be able accommodate passengers under the Americans with Disability Act.