Phoenix’s New Rideshare Fees Are Headed Straight to the Arizona Supreme Court

The rate hike would nearly double pick-up fees at Sky Harbor.

Arizona Attorney General Mark Brnovich announced plans Thursday to take the Phoenix City Council’s new rideshare fees at Sky Harbor International Airport to the Arizona Supreme Court. He cited a 2018 law that prohibits cities from creating service-based taxes.

The fees have been a source of controversy since they were first approved last October. Rideshare companies Uber and Lyft have vehemently opposed the fees, and have threatened to pull their fleets from Sky Harbor completely once the fees take effect on Feb. 1, 2020.

Currently, riders who get picked up from the airport are charged a fee of $2.66. The charge will increase to $4.00 next month, along with a new $4.00 fee for those who get dropped off at Sky Harbor.

Brnovich has been investigating the legality of the increase since State Rep. Nancy Barto, R-Phoenix, filed a formal complaint with his office in December. The complaint cites Proposition 126, a 2018 ballot initiative that forbids cities from imposing additional taxes on services by way of constitutional amendment.

“This action by the City of Phoenix would constitute both a violation of the Arizona Constitution and a harmful and unnecessary government overreach,” Barto said in a prepared statement. “The citizens of Arizona must have a government that is limited in its reach and held accountable to its purpose.”

City officials deny the claim that the fees violate Prop 126, saying in a statement to Brnovich’s office that trip fees don’t qualify as a tax on services. The City’s argument went on to compare the new fees to other fees currently on the books for restaurant and retail businesses that operate at Sky Harbor.

“The City believes if rideshare companies want to profit from their use of the airport’s valuable infrastructure and from their access to the airport’s property,” the statement concluded, “it is only fair that these companies pay their share of the costs required to maintain it, just like airlines do.”

But Brnovich disagreed, and said he will be filing actions with the Arizona Supreme Court to weigh in on the matter. 

“The Phoenix City Council is placing its policy preferences above the rights of the people to whom the government must always answer,” Brnovich said in his announcement. “We will now take this matter to the Arizona Supreme Court and seek an expedited ruling.”

Gov. Doug Ducey, who has been a long and vocal supporter of Uber, also mentioned the fees in his State of the State address on Monday.

“Here you can brew beer, churn ice cream, and make an honest living,” Ducey said. “Now, all we need is Uber and Lyft back at Sky Harbor.”

Ducey also issued a warning to any other efforts to raise taxes during his time in office: “No new taxes; not this session – not next session; not here in this chamber – not at the ballot box; not on my watch.” 

Once Brnovich files his actions with the courts, Arizona justices will weigh in on whether or not Phoenix’s rideshare fee can be considered a tax. Should the courts side with Brnovich, the City would be required to remove the fees with no option to appeal.