Arizona Attorney General: New Sky Harbor rideshare fee structure may violate state constitution

PHOENIX - Arizona's Attorney General is asking the state's Supreme Court to weigh in on the new rideshare fee structure at Phoenix Sky Harbor Airport that was approved by the Phoenix City Council in December.

In documents obtained by FOX 10, Mark Brnovich argues the new city ordinance "very likely" violates a provision in the state constitution that was approved by voters in 2018 as Proposition 126, but also notes that Proposition 126 has not been interpreted by Arizona courts yet.

Officials with the Attorney General's Office say two actions will be filed with the State Supreme Court to strike down the rideshare fee, and prevent it from taking effect.

Arizona Attorney General Mark Brnovich

According to documents released in 2018, Proposition 126 bans the state and any government entities within Arizona from imposing or increasing any tax, fee, stamp requirement or other assessment on services performed in the state.

The proposition does not, however, repeal any such taxes and fees that were already in effect before 2018.

In a series of tweets on Thursday, Brnovich accused officials with the City of Phoenix of seeking to "rewrite the Constitution" and place the powers of government above the rights of the people.

"This is a new provision in our Constitution. It hasn't been litigated. There's no case law. Maybe that's what the city is doing, because there is no case law they're trying to pull one over and trick us," said Brnovich.

Phoenix City Council originally approved the rideshare fee increase in October 2019, but due to an administrative error, councilmembers voted again to approve it in December.

According to city officials, the new fee structure, which is set to kick in on February 1, calls for rideshare operators to pay a $2.80 pick-up and drop-off fee for non-zero emission vehicles at the PHX Sky Train Station. Zero-emission vehicles will pay a $2.40 pick-up and drop-off fee instead.

For pick-ups and drop-offs at the terminal curb, a $4 fee will be imposed, which will increase to $4.25 in 2021, $4.50 in 2022, $4.75 in 2023, and to $5 in 2024. Starting in 2025, the rate will increase by either the inflation rate of 3%, whichever is greater.

There was already a $2.66 pick-up fee for rideshare operators prior to the new fee structure's approval.

The City Council's approval of the new fee structure led to a complaint being filed to the State Attorney General's Office. In response, city officials say Proposition 126 does not prevent communities "from conditioning access to the property on the payment of such fees".

"We've got shops. We've got restaurants. Among them, we have rideshare companies that are also profiting from the city's property at the airport, and just like eveyrone else is paying a fee to access that property, the rideshare companies should pay as well," said Phoenix legal counsel J. Cabou.
 

Phoenix Sky Harbor Airport

In the aftermath of the plan's approval, officials with Lyft and Uber say they will stop all operations at Sky Harbor.

In a statement obtained by FOX 10, Lyft officials say they will cease operations at the airport ahead of the fee's 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," read a portion of the statement.

"We're pulling out of the airport, I want to be clear about that," said Piper Overstreet with Uber. "We'll still be a transportation option around the Valley and state."

As drivers like Giles Patten get word of Uber's decision to cease operations at Sky Harbor, they started thinking of a Plan B.

"I started thinking maybe I should get a nine-to-five job, but I love this one," said Patten.