In response to a loss in revenue caused by ride-hailing services, some airports are trying to encourage people to drive and park. Boston’s Logan International guarantees parking in a special area, for joining its Passport Gold program.
For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?
Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.
But that’s not the case for airports. Travelers’ changing habits, in fact, have begun to shake the airports’ financial underpinnings.
Fewer people are parking cars at airports, using taxis or renting cars, according to a recent report from the National Academies Press (https://www.nap.edu/download/24867).
Those trend lines are hurting airports, which depend on fees from parking lots, rental car companies and taxis as their biggest source of revenue other than the fees paid by the airlines. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.
At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals, there’s more congestion. “Airports are expected to be self-sufficient and not be a drain on the public purse,” said Ray Mundy, director of the Center for Transportation Studies at the University of Missouri-St. Louis. “Airports have to find other sources of revenue.”
Henry Harteveldt, travel analyst for Atmosphere Research, said the current declines in income are just the tip of the iceberg. As autonomous cars gain traction, he said, “the airport parking gravy train is going to dry up.” The future, he said, could bring less ticket counter space and more retail and food and beverage offerings, as airports struggle to come up with revenue to replace what they have lost.
The Federal Aviation Administration reported in November that the $4 billion in fees collected last year for parking and ground transportation represented nearly 42 percent of the $9.6 billion in airport revenue from sources other than airline fees. Money collected from rental car companies, excluding the fees that airport operators charge rental car customers to help pay for the construction of new facilities, added an additional nearly $1.8 billion. The combination far exceeded the fees the airports collected from food and beverage outlets, stores and hotels.
To generate revenue, some airports have started to charge ride-hailing services to pick up or drop off passengers. But it’s an inconsistent patchwork. Although 48 states have passed legislation governing ride hailing, the laws in 43 of the states and Washington, D.C., cover operating permits and fees, background check requirements, operational standards and passenger protections. (The laws in the other five states are less comprehensive.) Only 23 of the states explicitly grant airports the authority to impose standards or fees for operations on airport property, said Maarit Moran, an associate transportation researcher at Texas A&M Transportation Institute.
Some airports ban ride-hailing companies or impose restrictions on where they may drop off or pick up passengers. The decision, Mr. Mundy said, is up to the airport owner or operator and subject to the state laws that govern ride-hailing companies. At the end of October, Lyft operated at about 300 airports nationwide. Uber estimates that it serves more than 150 airports in North America.
Fresno Yosemite International Airport in California is one airport that said it’s feeling an economic pinch. The airport is served by Lyft; Uber discontinued service this year rather than comply with an airport operating agreement, a Fresno Yosemite spokeswoman said. “Our parking revenue growth is no longer tracking our passenger growth,” said Kevin Meikle, director of aviation for the City of Fresno. The airport is looking at an estimated $250,000 in lost income this year.
Darren Perry, a managing director in the aviation and travel practice at L.E.K. Consulting in Boston, said the decline in fees for airports could become a major problem. “If that were to persist it would be difficult for the airports,” he said. Pat Kinsel, chief executive of an electronic notary company, is one traveler who has switched to a ride-hailing service. He says that when he travels from his home in Boston to Logan International Airport, he usually takes Uber. “I gave up driving to increase time and efficiency,” he said.
Another frequent traveler, Mark Lowenstein, a telecommunications consultant based in Boston, said he switched after reserved taxis stood him up. Airports, in the meantime, are finding ways to make parking if not more appealing, then more easily navigable. While frequent parking clubs have existed in some places for a decade, these programs at airports now have new relevance.
For $200 a month prepaid, for example, passengers can join Premier Parking at Jacksonville International Airport and get a guaranteed parking space within 200 feet of the terminal. They also get a preferred passenger card that allows them to join an often-shorter security lane also used by airport employees and military personnel in uniform. The program currently has a small waiting list. At Seattle-Tacoma International Airport, frequent travelers who belong to Passport Parking pay $350 a month to get unlimited access to the airport garage on the Terminal Direct
- Airports are losing money as ride-hailing services grow