On Wednesday, December 18, 2019, the Phoenix City Council approved an amendment to the City Code which will allow Phoenix Sky Harbor International Airport to adjust fees for ground transportation.
Phoenix Sky Harbor International Airport does not receive any tax revenue and is supported only by rent and fees paid by those who use its facilities. Commercial ground transportation businesses have been paying only a fraction of what it costs to operate the ground transportation program at Sky Harbor that supports their operation and are currently being subsidized by other Airport businesses. With the changes approved by City Council, the commercial ground transportation providers will be treated similarly to the other companies doing business at Sky Harbor.
Beginning February 1, 2020, new ground transportation fees will offer two options for rideshare providers: A $2.80 drop-off and pick-up fee at the PHX Sky Train Station or a $4.00 drop-off and pick-up fee for service at the terminal curb. When rideshare operators began in June of 2016, they represented only 9.3 percent of the commercial business. Today they represent 70 percent of the commercial traffic. While certain regulated providers, like taxis, are not allowed to pass fees onto the drivers or to their customers, other unregulated providers such as rideshare operators can choose whether to pass the fees to their customers or drivers.
Ridesharing companies like Uber and Lyft have made their stance known if this amendment passed. Last month, they sent letters expressing that if Phoenix imposes this tax increase, they will leave the airport. If they put their pedal to the metal, this would make Phoenix the first airport in the nation to literally drive out ridesharing companies.
Phoenix City Councilman Sal DiCiccio has been very vocal about his disapproval of this tax increase, and after the approval he released a statement reading, “Despite learning that it is in direct violation of the Arizona constitution, the politicians at City Hall voted once again to pass this horrible new tax on rideshare. This will absolutely be overturned by the courts, and what the politicians did today is just take more money out of your pocket to pay for a futile lawsuit and screw over everyone who uses Uber and Lyft to get to the airport.”
Uber has reiterated their “willingness to work with you and your staff to identify a better solution that does not unfairly target those who rely on ridesharing.” But also stands firm on their ultimatum: “If the Phoenix City Council approves the ground transportation fee structure currently recommended by PHX, Uber will be forced to cease operations at Phoenix Sky Harbor effective January 2020,” Chris Garcia, Global Airport Partnerships Manager for Uber wrote in a letter addressing City of Phoenix Aviation Department Director Jim Bennett. The letter also calls out the “millions of Arizonans and visitors” that Uber has helped move around the valley since their launch in Phoenix in 2012, during “a period of remarkable economic growth and expansion” and points to the company’s heavy investment in the Phoenix community.
The new fee structure will also encourage the use of the 44th Street PHX Sky Train Station, reducing the number of vehicles in the Airport core. The PHX Sky Train was built for and continues to dramatically reduce congestion on airport roadways, allowing for ground transportation businesses to utilize curb space. Incentivizing PHX Sky Train pick-up and drop-off will help ease traffic congestion and improve air quality by reducing the number of idling vehicles at Airport curbs. While many other major airports are forcing rideshare providers off their curbs to remote locations, Phoenix Sky Harbor is continuing to allow premium curbside service while offering a green incentive to use a remote location. The Council also provided for a 40 percent green discount for all commercial ground transportation providers using zero emission vehicles.
Now the keys are in the hands of Uber and Lyft — will they rev the engine on their threats to leave Sky Harbor? At time of press, there had been no statement from either rideshare company on their next move.
