Phoenix halts rail-hailing fee hike at airport until ruling

PHOENIX (AP) — The city has decided not to move ahead with higher fees for ride-hailing companies at Phoenix Sky Harbor International Airport until the Arizona Supreme Court rules on a petition challenging the constitutionality of the ordinance, the state attorney general said Wednesday.

The increased fees for pickups and drop-offs at the airport had been scheduled to take effect Feb. 1.

Phoenix's decision came after the Arizona attorney general's office sought to overturn the ordinance and requested the state's high court declare the fees unconstitutional.

Uber said Wednesday that it would stop serving Sky Harbor at the end of the day Jan. 31 if the fee wasn't repealed or blocked by the court. Lyft has also threatened to leave the airport but did not announced a date.

Attorney General Mark Brnovich called the city's decision “a win for consumers.”

Brnovich has said the $4 fee on Uber and Lyft rides to and from the airport that the Phoenix City Council approved last year is “very likely” unconstitutional and probably violated a 2018 ballot measure prohibiting higher taxes on services.

By law, Phoenix could lose its share of state revenue — a third of its general fund budget — if the fee hike is found to be illegal and the city doesn't repealed it.

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

Phoenix argues the fees are akin to rent and landing fees charged to restaurants and airlines.