AG Brnovich: New Phoenix rideshare fee structure will not go into effect February 1

Arizona Attorney General Mark Brnovich announced Wednesday afternoon that a controversial Sky Harbor rideshare fee structure that is now at the center of a lawsuit between the state and Phoenix will not go into effect, at least for now.

According to Brnovich, the City of Phoenix has backed down from enforcing the rideshare fee. The decision by Phoenix came a day after Brnovich filed a lawsuit to the State Supreme Court to challenge the rideshare fee structure and stay the implementation of the new fee structure.

As a result of the decision by the City of Phoenix, the Arizona Attorney General's Office will also withdraw their motion for the court to stay the new fee's implementation as moot.

The new fee structure was approved in December 2019, and under the new fee structure, rideshare operators will 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 Sky Train Station.

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.

Currently, there is a fee of $2.66 that is only applied towards pick-ups.

Brnovich has asserted that the new city ordinance "very likely" violates a provision in the state constitution that was approved by voters in 2018 as Proposition 126. In response, city officials say Proposition 126 does not prevent communities "from conditioning access to the property on the payment of such fees".

City of Phoenix Communications Director, Julie Waters, said the city continues to stand by its ordinance and legal position, but the city voluntarily agreed to delay the effective day of the frees until after the State Supreme Court makes its decision.

Earlier on Wednesday, Uber announced that it will stop all services to Phoenix Sky Harbor Airport at the end of January, if the increased rideshare fees go into effect. 

The news came in a letter to the City of Phoenix's Director of the Aviation Department.

Please accept this letter as official notice from Uber Technologies Inc. that, in the event theAirport or City does not place a hold on the implementation of the proposed TNC fee increase,or a legal stay is not granted, we will be ceasing all operations at Phoenix Sky HarborInternational Airport effective 11:59pm on Friday, January 31st, 2020.

— Global Airport Partnerships Manager, Uber

Lyft has also threatened to stop services to the airport but has yet to announce a date.

Attorney General Brnovich said oral arguments for the rideshare fee structure lawsuit is scheduled for the afternoon of March 26.