By Recker McDowell —
The Phoenix City Council is scheduled to vote next week on proposed hikes to fees charged for Lyft and Uber rides to and from Phoenix Sky Harbor International Airport.
The peril for Phoenix are the messages the higher rideshare fees convey to innovative and creative companies, workers and entrepreneurs. The issue could go well beyond airport fees and revenue. The higher fees could send discouraging messages about the city and region when it comes to the sharing economy, innovation and welcoming new business models.
The increased fees, which could eventually go up to $10 round trip, have sparked threats from Lyft to stop service at Sky Harbor. GOP State Rep. Nancy Barto and the libertarian Goldwater Institute have warned Phoenix’s higher rideshare fees to the airport could run afoul of Proposition 126, a voter approved measure restricting cities impose new and higher fees on services. Rideshare trips to the airport currently get charged a $2.66 fee to get picked up at the airport. There are currently no fees for Uber and Lyft drop-offs.
The city of Phoenix owns and operates Sky Harbor. Proponents of the higher rideshare fees see the need for revenue to operate the airport. More and more passengers opt to use Lyft and Uber instead of parking at airports or even renting cars.
That is leaving airport operators (in this case the city of Phoenix) with less parking revenue. So, it is not surprising the City Council is eyeing higher fees. They are estimated to bring in $18 million and would go toward maintaining the PHX SkyTrain people mover as well as other operational costs at the airport.
The fees might make sense to the city from a bottom-line perspective for airport operations.
The problems are in the optics. Phoenix and other cities want to tout themselves as being innovative, in tune with the new sharing economy and changes in the marketplace.
On that front, higher fees on Uber and Lyft hurt Phoenix’s economic development and competitive image.