Uber, Lyft to drop lawsuits after Las Vegas City Council votes to eliminate fee

Riders prepare to load their luggage into Ride-hailing company's Uber and Lyft car at McCarran International Airport at Terminal 1 onThursday, Oct. 20, 2016. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye

Arriving passengers at McCarran Airport wait for their ride at Ride Share pick up area Wednesday, Dec. 14, 2016, in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye

Riders wait for their ride at Ride Share pick up area at McCarran International Airport at Terminal 1 on Thursday, Oct. 20, 2016. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye

Ride-hailing company Uber driver, who refused to give his name, picks a rider up from McCarran International Airport at Terminal 1 on Thursday, Oct. 20, 2016. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye

The Las Vegas City Council on Wednesday agreed to settle a lawsuit with ride-sharing companies Uber and Lyft over a per-driver fee the city tried to impose this year.

The settlement wipes out the $100 per-driver fee and calls for the ride-sharing companies to drop their lawsuits against the city, contingent on the council approving a new ordinance, which will come back to the City Council at a future meeting. Each company will instead pay the city an annual flat $17,500 license fee.

The popularity of ride-sharing services such as Lyft and Uber, which allow people to download a smartphone application to order a ride and pay for it, has ballooned nationwide.

The council enacted the $100 per-driver fee, which was set to be based on the average number of drivers operating over a six-month period, with 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 cases were combined, and the city negotiated with the two companies to reach a compromise. While the lawsuits were pending, the companies haven’t been required to pay the per-driver fees.

A judge in July granted both companies’ motions for preliminary injunctions, finding that the city’s ordinance violated Nevada state statute and preventing the city from enforcing it ordinance. That triggered the settlement discussions.

As part of the settlement, the companies agree not to challenge the replacement ordinance as it’s now written, 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.

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