Lyft Threatens To Pull Out Of Phoenix Airport Over $26M Fee Hike

PHOENIX, AZ — Rideshare company Lyft has threatened it will discontinue its services at the Phoenix Sky Harbor International Airport because of a $26 million fee hike imposed by the city of Phoenix. The rate hike was approved at the Phoenix City Council meeting on Oct. 16, and Lyft will be required to come up with its assigned share of the $26 million if a Dec. 18 revote confirms the measure.

Lyft’s Senior Director of Business Bakari Brock wrote a letter on Nov. 4 to James Bennett, the City of Phoenix’s Aviation Department director, addressing the rate hike and Lyft’s intentions to stop service at Sky Harbor Airport in January because of it. The letter’s intention, Brock wrote, is to bring up points about the vote “because the Lyft passengers and drivers who attended the hearing were prohibited from providing public comments prior to the vote.”

Brock wrote in his letter that Lyft has collaborated with the City of Phoenix in “a common objective of improving people’s lives by improving transportation” since it began services at the airport in 2016.

The letter continues, “Given this history of collaboration and our common objective to positively impact this community, we were extremely disappointed that the mayor and city council voted on Oct. 16 to adopt a proposal that singles out ridesharing companies and unfairly burdens our passengers and drivers with budget shortcomings for operating and maintaining the Phoenix Sky Train.”

Brock said the measure would increase Lyft’s fees from a pick-up only rate of $2.66 to $4 for pickup and $4 for drop-off service. The fees would further rise by 25 cents per year to $5 for pickup and $5 for drop-off by 2024 according to news reports. Lyft said that some Phoenix area residents can afford to pay more, “but there are many price-sensitive passengers who will not.”

Brock also wrote that $10 to and from the airport is Lyft's average fare, but 44 percent of rides originate or stop at low-income areas.

“This tax punishes riders who rely on Lyft for affordable and convenient transportation to and from the airport, and unfairly burdens them with a $26 million price tag tied to the Phoenix Sky Train — a capital improvement project that is unrelated to their choice of transportation,” Brock wrote. “We have reviewed our options at Sky Harbor and, without an alternative path forward, we are obligated to prevent the unfair penalization of our drivers and riders by ceasing operations at the airport beginning January 2020.”

Lyft’s letter concludes by mentioning that the ordinance will be voted on again at the Dec. 18 Council meeting, and the company requests the chance to discuss alternative options with city officials before then.

“[We] are hopeful that we can arrive at a mutually beneficial resolution for all parties,” the letter, copied to Mayor Kate Gallego and Phoenix Aviation Advisory Board Chair Leezie Kim, concludes.

On Nov. 6, city aviation director Bennett wrote a letter, posted by news station KTAR in response to Brock’s letter two days before. Bennett wrote the city has held meetings with Lyft several times and that city officials are open to meeting with Lyft officials again. But Bennett states that his letter’s intention is to “set the record straight on several claims made in your letter.”

One claim of Brock’s that Bennett refutes is that Lyft drivers and passengers weren’t allowed to make public comments on Oct. 16 before the council voted. Bennett says five people offered 50 minutes of comment by people speaking on behalf of rideshare companies on Oct. 16.

“Lyft was also in attendance, and had the opportunity to comment three other times where this item was addressed,” Bennett continued. Those other three times were the Sept. 12 Phoenix Aviation Advisory Board subcommittee meeting, the Sept. 19 full board meeting and the Oct. 2 Phoenix City Council subcommittee meeting.

Bennett also clarified the fees cited in Brock’s letter were partially inaccurate concerning the 44th Street Sky Train station, which would keep a $2.80 fee only. However, the $4 fee hike Brock mentioned would be in place for premium curb service.

Bennett also disputed Brock's assertion that some Lyft riders won’t be able to pay higher rates.

“Saying this is misguided as the business fee increase is intended for the transportation companies," Bennett wrote. "It will be up to Lyft to determine if the increase is passed on to customers.”

Bennett went on to explain that Lyft’s share of the $26 million to be collected is about $6 million, and that it is a business fee and not a tax. The $26 million would go toward signage, roadway maintenance, staffing, and technology to increase rider and driver safety.

“Just like the shops, restaurants and services at the airport pay rent at market rate for the privilege of making a profit from airport customers, so should ridsehare companies,” he explained.

And, Bennett said, the Phoenix Sky Train does benefit rideshare companies by keeping the roadways and curbs clear of traffic congestion.

“If you choose to cease operations at Sky Harbor, we will do our utmost to assist in directing passengers to other services available. Again, we are happy to meet again and explain further if necessary,” Bennett concluded.

Councilman Sal DiCiccio, who posted Lyft's letter to the City on his Facebook page, issued a statement Monday about Lyft’s announcement.

“Phoenix politicians are about to stick it to the public once again," DiCiccio wrote. "They need to realize that this is going to hurt the City of Phoenix at a national level, it will hurt the public, and it will hurt small business owners that rely on rideshare.

“Last month the council voted to tax every rideshare trip to/from Sky Harbor an extra $5 each way! This bad policy will directly hurt working and middle class families who rely on rideshare in Phoenix. Now Lyft has announced they will not cooperate with this targeted attack …

“There is still time to stop all this from happening. The City failed to follow state law the first time this horrible tax was voted on, so it is scheduled for a new vote on December 18. I strongly urge the other members of the Council to think about what they are doing and pull back on this enormous tax on the public,” DiCiccio concluded.