PHOENIX — The Phoenix City Council said Wednesday it will raise fees charged to ride-hailing companies at the airport in the nation's fifth-largest city, and Uber said it will stop operations there over the increase.
"Phoenix is a global city," said Mayor Kate Gallego, who backed the measure. "We want to invest in a first-class airport."
Under the measure, the current fee of $2.66 per curbside pickup at Phoenix Sky Harbor International Airport will increase to $4 on Feb. 1.
It also will create a new drop-off fee, set at $4. The pickup and drop-off fees to the ride-hailing companies would gradually increase to $4.25 in 2021, $4.50 in 2022, $4.75 in 2023 and $5 in 2024.
Uber said in a statement that it was disappointed and would halt its service at the airport next month. "Our riders and drivers should not be treated as a piggybank to fill the airport's budget holes," the statement said. "On behalf of the riders and drivers who rely on Uber, we cannot accept a partnership that unfairly burdens our shared passengers."
Sky Harbor has said it will not directly charge drivers or passengers, but Uber and Lyft have indicated the fees could be passed on to customers.
It's not the first time Uber has stopped service over increased fees or additional regulations. It halted trips to and from Ontario International Airport in September, a few months after the airport east of Los Angeles raised fees for drop-offs or pickups from $3 to $4.
Representatives for Lyft did not immediately respond to messages seeking comment after the 7-2 council vote.
Bakari Brock, senior director of Lyft Business in San Francisco, suggested in a Nov. 4 letter to Phoenix that the increase would "unfairly burden" people who live in low-income areas, many of whom lack easy access to public transportation.
A city aviation commission had recommended the fee increase after a study showed airports in many other cities charge ride-hailing companies more to drop off and pick up passengers.
Several speakers at the meeting said people used many other transportation services to get to the airport long before ride-hailing companies, including rides from family and friends, taxis, shuttles and light rail, which brings people to the 44th Street station to catch the PHX Sky Train into the airport.
The measure also included a second option for ride-sharing, a $2.80 fee for the companies to pick up or drop off people at the 44th Street station. To make up for the higher fees, Sky Harbor has offered to increase curb space inside the airport for ride-hailing customers and improve Wi-Fi services so passengers can find drivers more easily.
The council initially voted in October to raise the fees for ride-hailing companies, but the decision was declared void because of a clerical error in posting the measure for the amount of time required by Arizona law.
Jenna Bentley, director of government affairs for the Phoenix-based Goldwater Institute, said in a recent online post that the move will leave tens of thousands of people without one of the most affordable and convenient ways to get to the airport.
“It’s unfair to treat us as a piggy bank.”— Zach Crenshaw (@ZachCrenshaw) December 18, 2019
Uber not happy - says they’re ‘prepared’ to pull out of Sky Harbor in January. Not sure of date. pic.twitter.com/AAJwbG4o8W
The fees apply to anywhere that is the property of Phoenix Sky Harbor, including the Sky Train Station, terminals and the Rental Car Center. The remote Sky Train Center on 44th Street and Washington Street will only have a surcharge of $2.80.
However, any land or businesses located near Sky Harbor do not require the surcharge fee of four dollars. So a rider could be dropped off at the Circle K near 44th and Washington, then use the crosswalk to take the airport's Sky Train for free, saving a few bucks, but adding time to travel.
Sky Harbor Airport issued the following statement immediately following the vote:
"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 today, the commercial ground transportation providers will be treated similarly to the other companies doing business at Sky Harbor."
"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," said Councilman Sal Diciccio.