January 23, 2020 / 4:37 PM / a month ago

Phoenix delays airport ride-hailing fee hike as Arizona court weighs in

(Reuters) - The U.S. city of Phoenix will delay a planned fee hike for pickup and dropoff ride-hailing services at its Sky Harbor International Airport over which Uber Technologies Inc had threatened to leave, saying it would await a court decision.

The Arizona city said late on Wednesday its council members had agreed to delay the increase in ground transportation fees scheduled to come into effect on Feb. 1, after conferring with the state’s supreme court.

Arizona’s Attorney General Mark Brnovich on Tuesday asked the Arizona Supreme Court to block the rise in airport ride-hailing fees, arguing it was unconstitutional.

The city’s decision to halt the increase was a “win for consumers,” he said in a statement.

Uber, in a letter to Sky Harbor’s director and the Phoenix mayor on Tuesday, said it would cease operations at the airport from Feb. 1 unless the fee hike was suspended.

The company in the past has said its riders and drivers “should not be treated as a piggybank to fill the airport’s budget holes.”

Uber on Thursday did not immediately respond to a request for comment on the city’s decision.

Sky Harbor International is one of the largest commercial airports in the United States and among the busiest in the world, serving nearly 45 million passengers a year, according to data from trade group Airports Council International.

Airport trips are some of the most lucrative to ride-hailing companies like Uber and its smaller rival Lyft Inc, with many business travelers willing to spend more on rides.

Under the proposed Phoenix fee structure, charges for curbside pickup and dropoff would increase to $4 from $2.66, making it one of the highest airport fees in the country.

A fee of $2.80 would be applied to all trips beginning at a nearby train station connected to the airport by shuttle train.

Phoenix’s move follows that of other U.S. cities that are raising fees on airport ride-hailing trips and cracking down on chaotic curbside traffic as demand for ride-hailing has surged.

A regulator in September approved additional fees for New York City area airport trips, imposing a $2.50 fee on ride-hailing services.

Los Angeles International Airport ended curbside pickups for ride-hailing and taxi services in October, redirecting passengers to a new pickup area. San Francisco and Boston have implemented similar designated pickup zones.

Reporting by Tina Bellon in New York; Editing by Bernadette Baum

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