City of Las Vegas, ride-hailing companies reach settlement over per-driver fees

The city of Las Vegas has reached a settlement with Lyft and Uber after the ride-hailing companies filed lawsuits over a per-driver fee the city imposed earlier this year.

If the City Council approves the settlement deal next week, each ride-hailing company will pay a flat annual $17,500 license fee, and the $100-per-active driver fee would be wiped out.

Municipal and state governments across the country have grappled with how to regulate the new sharing economy. Services such as Lyft and Uber allow people to download a smartphone application to summon a ride and pay for it — no valet, cab or cash required.

The council enacted the per-driver fee by passing an ordinance by a 4-2 vote in January.

Delaware-based Lyft filed a lawsuit about a month later over the fee. A company spokeswoman in February called it “outrageously high” and an “illegal tax.”

About a week later, Rasier LLC, an Uber subsidiary, filed a similar complaint. The two cases were combined, and the city negotiated with the two companies to reach a compromise. In the meantime while the lawsuits were pending, the companies haven’t been required to pay the per-driver fees.

“As with any lawsuit, we try to sit down and see how we can resolve things,” City Attorney Brad Jerbic said. “We sat down with Uber and Lyft and negotiated this resolution.”

The District Court in July granted both companies’ motions for preliminary injunctions, finding that the city’s ordinance violated Nevada state statute and was “unconstitutionally vague,” according to the proposed settlement.

The proposed settlement agreement comes as the popularity of ride-hailing services as a way to get around the Las Vegas Valley continues to swell.

The 2015 Nevada Legislature approved regulations that allowed ride-hailing companies to begin operating. By September 2015, drivers for the companies were ferrying people around Southern Nevada, a few years after Uber launched service in many other major American cities.

“We’re pleased to have reached an agreement with the city to preserve the benefits Lyft’s affordable, reliable rides bring to Las Vegas residents and visitors,” Lyft spokeswoman Chelsea Harrison said in an emailed statement. “We urge the City Council to approve the settlement next week.”

In January, the council approved the $100 annual business licensing fee specifically for ride-hailing companies, which was set to be based on the average number of drivers operating over a six-month period. The settlement calls for the council to repeal and replace that ordinance no later than Feb. 1.

The companies agree not to challenge the replacement ordinance as it’s written right now, but if the city alters or amends it before or after it’s enacted without written consent by the companies, they’re not bound by the non-challenge clause. The terms also call for the companies to drop their lawsuits without prejudice and to cover their own attorneys’ fees and costs.

The council will consider the settlement agreement at its Wednesday meeting, which starts at 9 a.m. at City Hall.

Contact Jamie Munks at jmunks@reviewjournal.com or 702-383-0340. Find @JamieMunksRJ on Twitter.