Growing dispute over ride-hailing apps and Phoenix airport

Phoenix airport

By BOB CHRISTIE Associated Press

PHOENIX (AP) — A dispute between ride-hailing companies and the city of Phoenix deepened on Monday, as Arizona state lawmakers introduced legislation that would bar raising fees on Uber and Lyft at Sky Harbor airport.

The latest salvo in the growing fight is an attempt by state lawmakers to keep a free-flow of ride-hailing companies serving the main airport in one of the U.S.’s largest cities.

Uber and Lyft have threatened to stop service at the airport if the new fees are imposed.

The legislation was introduced by a bipartisan group of House lawmakers, led by Republican Rep. Travis Grantham, aiming to prevent new fees Phoenix wants to impose even if the state Supreme Court rules that they are legal. Grantham cited the threat that ride-hailing companies will stop taking travelers to and from the airport as one of the reasons he pushed the proposal.

Phoenix wanted to add the fees on Feb. 1. But they are on hold after Arizona Attorney General Mark Brnovich found last month that they are “very likely” unconstitutional.

Airports around the nation inundated by new ride-hailing companies displacing traditional taxis are struggling to adjust and to determine how to replace revenue they previously received from taxis. Taxis made nearly 800,000 trips at the Phoenix airport in 2015. But last year, they made about half that number. Shared-ride vans like SuperShuttle have seen even deeper drops.

Meanwhile, ride-hailing company pickups from Sky Harbor went from 1.3 million in 2017, the first full year they operated there, to 2.3 million last year.

The new $4 pickup and drop-off fees won’t be imposed while the state Supreme Court considers whether they are legal under a 2018 constitutional amendment that banned new fees on services, as Brnovich determined. The city currently charges $2.66 for each pickup but doesn’t charge for rider drop-offs.

Lawyers for the city say the higher fees are not taxes on services, but rather permissible charges for businesses to use the city-owned Sky Harbor International Airport, one of the largest U.S. airports serving about 44 million passengers a year.

“When they’re going to so severely restrict our ability to use the services that are out there, I think the state has to step in and take a position,” Grantham said Monday. “And quite honestly, I hope the court rules the way I want them to rule, which would be similar to what this bill does.”

“But if they don’t, I felt that we needed something there to be ready,” he said.

Grantham got 39 out of 90 House and Senate members to co-sponsor his bill. But he said he believes there are many more supporters.

The proposal applies to any public airport in the state.

Phoenix runs the airport independently without state money. The city argues the fees are akin to rent and landing fees charged to restaurants and airlines.

“The Phoenix approach of ensuring that companies profiting from the airport pay their fair share is smart — and legal,” Mayor Kate Gallego, a Democrat, said in a statement after Brnovich acted last month. “This fee is no different from the fee every other vendor has paid at our airport since its creation.”

City spokesman Matthew Heil declined to comment, saying the city’s focus is on preparing for the Supreme Court’s March 26 hearing.

Republican Gov. Doug Ducey is an Uber supporter, making moves after taking office in 2015 to allow the company to operate with minimal regulations. He’s said he’s not happy with the airport’s new proposed fees,

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