Uber threatens to leave Phoenix airport if city hikes ridesharing fees

Rideshare operators represent 70 percent of the commercial traffic at the airport

Uber joined Lyft in threatening to pull its services at Phoenix's Sky Harbor International Airport if the city council approves tax hikes on ridesharing operations there.

Continue Reading Below

The rideshare giant issued a letter on Dec. 13 to Phoenix Aviation Department director James Bennett ahead of the Wednesday city council vote that would approve for a second time the rate hikes recommended by the airport.

City council members already voted 7-2 in October to charge ridesharing companies a $4 fee for each ride to and from the airport starting in 2020. With the fee increasing by 25 cents annually, it will reach $5 in 2024.

In the letter, Uber said they will base their decision to cease operations based on that vote.

"If the Phoenix City Council approves the ground transportation fee structure currently recommended by PHX, Uber will be forced to cease operations at Phoenix Sky Harbor Airport effective January 2020," the letter said.

The City of Phoenix opposes the new fees, saying they would make the airport the first to "literally drive out ridesharing companies."

UBER'S LOSSES SHRINK AS CEO PROMISES PROFITABILITY FOR 2021

Sky Harbor officials say the fee changes were designed in part to reduce the number of vehicles at the terminals and encourage use of the free PHX Sky Train. When rideshare operators began in June 2016 at Sky Harbor, they represented only 9.3 percent of the commercial business.

Airport officials say rideshare operators now represent 70 percent of the commercial traffic.

CLICK HERE TO READ MORE ON FOX BUSINESS

After the initial vote, Lyft announced it would be ceasing operations at the airport once the tax was imposed in January.

"We have reviewed our options at Sky Harbor and believe we are obligated to prevent the unfair penalization of our drivers and riders. They should not have to shoulder the burden of the city's budget shortcomings," a Lyft spokesperson told FOX Business Monday.

Stocks in this Article

UBERUBER TECHNOLOGIES INC.
$35.13
+0.45 (+1.30%)
LYFTLYFT INC.
$46.52
-0.31 (-0.66%)

UBER COMMENDED FOR NEW SAFETY REPORT

Following Lyft's decision in November, Bennett wrote to the company that the fees aren't necessarily a burden to users but intended to be absorbed by the companies, KTAR News reported.

Phoenix Sky Harbor International Airport declined FOX Business' request for comment.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Uber announced it is willing to work with the aviation department to find a "better" solution.

"I am writing to you to once again reiterate our willingness to work with you and your staff to identify a better solution that does not unfairly target those who rely on ridesharing," Uber global airport partnerships manager Chris Garcia said.

The Associated Press contributed to this report.