A ride-hailing company is fighting back against Las Vegas after being told in January it would have to pay another fee to operate inside the city.
Lyft, the Delaware-based transportation network company, filed a lawsuit in Clark County District Court Thursday against the city that claims state law prevents it from collecting the fees the City Council approved Jan. 20.
The council voted 4-2 in favor of levying a $100 annual fee per “active driver,” twice a year, based on the average number of drivers operating over a six-month period. Those fees will go into effect in March.
In the lawsuit, Lyft states the fee is the “precise opposite of what was intended by the state legislature.”
“The City of Las Vegas is trying to levy an outrageously high tax on ridesharing that it doesn’t have the legal authority to collect,” Lyft spokeswoman Chelsea Wilson said in a statement. “When state leaders passed AB 176 last year, they prohibited singling out ridesharing with fees that restrict competition and limit consumer choice. As the City has refused to reconsider its illegal tax, we are forced to take action to preserve Lyft’s safe, affordable rides for people in Las Vegas.”
The 2015 Nevada Legislature paved the way for companies such as Lyft and Uber to operate in the state. By September, those companies were up and running in Southern Nevada, operating in Las Vegas on a temporary 6-month business license.
The city’s proposed fees would add another financial hurdle for the ride-hailing companies, who have to pay up to $75,000 for licenses in Clark County. Additionally, those companies have to pay an initial fee of up to $500,000 to the Nevada Transportation Authority that is good for two years. After that, it becomes a revenue-based fee, but the exact percentage has yet to be determined.
The lawsuit comes on the heels of a meeting last week between city officials and the state’s 12-member Legislative Commission where the city claimed the state law that regulates how municipalities can tax and assess fees to ride-hailing companies is ambiguous.
Lyft’s lawsuit echoes the remarks made by Uber and Lyft representatives, as well as commission Chairman state Sen. Michael Roberson, R-Henderson, saying the state law is clear and that the city’s fee is illegal under that law.
The commission is scheduled to meet on March 11 to consider whether additional regulations are needed to clarify the legislative intent.
Lyft’s biggest competitor, the significantly larger Uber, is closely eyeing how the lawsuit and commission hearings play out.
“We remain concerned about the City of Las Vegas Ordinance, which we believe directly conflicts with State law. We are closely reviewing Lyft’s complaint, and we are considering all of our options,” Uber spokeswoman Taylor Patterson said.
City spokesman Jace Radke said the city does not comment on pending lawsuits. Radke added that Lyft also filed an objection to the council’s vote, which will will be heard during the March 16 City Council meeting.
Review-Journal writer Richard N. Velotta contributed to this report.
Contact Colton Lochhead at email@example.com or 702-383-4638. Find him on Twitter: @ColtonLochhead