Passengers appreciate the three Cs of TNCs—convenience, customer service and cost, says Bob Swensen, airport operations manager of landside services for the City of San Jose Airport Department. “These three Cs are the reasons transportation network companies (TNCs), like Uber and Lyft, are so popular and why they are in such demand for air travelers,” he says.
Swensen says meeting passenger demand and boosting passenger experiences rank high among the reasons why airports in San Jose, San Francisco, Santa Ana and Nashville, Tenn. have partnered with rideshare companies.
But when you consider that Uber alone is in 290 cities and 55 countries across the globe, and only a handful of U.S. airports work with these companies today, such partnerships have a distance to go. “Most airports have yet to develop a workable approach to the unique legal and logistical challenges presented by car sharing and ridesharing services,” writes Paul J. Fraidenburgh, an attorney in Buchalter Nemer’s Aviation and Aerospace Practice Group, in a blog titled, “Sustainable Airport Policies for Car Sharing and Ride Sharing Companies.”
As ridesharing services change the game in ground transportation, airports will need to pick up new skills to compete. Technological limitations, insurance liability concerns, permitting issues, trip tracking and fees, payments and airport access are all issues that must be hammered out before TNCs become a regular fixture at the airport curb.
Instead, some airports have opted to prohibit these companies from operating on airport grounds. In fact, just last fall, Uber suspended pickups at Pittsburgh International Airport after receiving reports that authorities were ticketing its drivers.
But the tide is turning. Nashville International Airport officially added rideshare companies to its ground transportation policy in September. San Jose and Santa Ana airports gave TNCs the green light in February. And, San Francisco International Airport recently launched a pilot program to work out the kinks before making TNCs a permanent fixture.
Fraidenburgh reports non-airport regulators are also beginning to appreciate that ridesharing services differ from taxi companies and as such should not be subject to the same regulations. In September 2013, California became the first state to provide a regulatory framework for TNCs, defined by the California Public Utilities Commission (CPUC) as any organization that “provides prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles.” The Illinois House of Representatives followed suit in March when it passed HB 4075, which will implement a set of regulations specific to ridesharing services.
It appears the regulatory framework set forth by California and Illinois was exactly the impetuous some airports needed to wade into TNC waters. “What really allowed us to move forward was the regulatory framework provided by the State of California,” says Doug Yakel, public information officer for San Francisco International Airport.
Jenny Wedge, spokesperson for John Wayne Airport, agrees. When this California airport first considered working with TNCs, they found six companies operating locally with permits from the CPUC. The airport also requires these firms to obtain an additional permit. “We were able to create a permit that speaks specifically to the way TNCs operate,” she says. “We addressed it because we wanted to be able to safely and fairly allow these operations at John Wayne Airport.”
These trendsetters, who are paving the way for other airports to foster similar partnerships, have found that by developing practical sustainable policies addressing issues such as permitting, service monitoring, insurance and revenue sharing, they’ve added a new non-aeronautical revenue stream. During the first month of its pilot program, San Francisco recorded 140,000 rideshare trips with the TNCs paying an estimated $2 to $4 a trip. At the low end that’s $280,000 in non-aeronautical revenue in a single month.
“There is a definite revenue stream that will be generated by TNCs operating with authorization from the airport,” says Swensen.
Rideshares have arrived at the airport, Yakel stresses, noting airports have two options: They can prohibit operations and ticket drivers operating at the airport without permission or find a way to partner with them. “We saw there will always be some number of folks who attempt this, even if it’s not permitted,” he says. “We were motivated to recover the fees that are necessary to maintain and manage our roadways through this activity.”
SUBHEAD: Trip Tracking Technology
At the heart of the TNC debate is a physical piece of equipment known as an automatic vehicle identification (AVI) system. “There were issues with how you service it, who is responsible for it, how you get new vehicles outfitted with it, and how do you replace the AVI transponders,” says Lane Kasselman, a spokesperson for Uber.
Many airports, such as Ronald Reagan National Airport, utilize AVI transponders, which are equipped radio frequency identification, to queue vehicles as needed and record trips to collect trip fees. However, this technology--while it works very well—did not make sense to rideshare companies who may have four times the number of drivers on the road as a taxi company. “TNCs are a different animal,” says Swensen. “They’ve got thousands of drivers out there. We as an airport decided we were not going to issue AVI tags to thousands of drivers.”
Shannon Sumrall, spokesperson for Nashville International Airport, which became the first airport in the nation to begin permitting TNCs back in September 2014, agrees the transponder issue became major sticking point in initial negotiations. “AVI transponders are expensive, and companies have to pay for them,” she says.
Forrest Swonsen, Associate Vice President for TransCore's Airport Systems & Services, a Nashville-based firm that provides high-end tracking technology for airports and tollways, adds that just from an operational perspective there are challenges. Let’s say, a limosine company is enrolled at the airport, but its drivers also do Uber trips, and the airport negotiated a different fee structure for Uber trips. “We’re going to get an AVI read, whether it’s an Uber trip or a regular trip,” Swonsen says.
Airports found they could solve these problems by tapping into the technological platforms TNCs already had in place, according to Swonsen. Rideshare companies connect with customers through an app on their smartphones. In every TNC transaction, there’s a driver for the vehicle, a passenger and a company that hosts the app. “The one thing that pulls all three of these pieces together is GPS,” says Swonsen. “Through GPS you know where the driver is, the vehicle they own that’s in the program, where the customer is located, and then the company pulls all of those pieces together and creates an electronic way-bill to create a transaction. Airports could get a summary of that trip through the electronic way-bill.”
Now add to that geofencing, which uses GPS to define geographical boundaries. This technology allows an airport to set up a virtual perimeter that triggers a notification (and corresponding fee payment) every time a TNC driver arrives to pick up or drop off a passenger. “This system sets up an ‘electronic’ fence around the airport,” Swensen explains. “Whenever a TNC accepts a ride and activates the cell phone app as they drive into the airport, the geofence picks up on it, tracks it, and later breaks the geofence as they leave.”
Sorting out the technology became one of the reasons San Francisco entered a 90-day pilot with Uber, Lyft and Sidecar. This pilot granted permits, during which time airport officials reviewed how many vehicles came in and out of the airport, whether the airport roadways and structure could support the business, and how trips would be counted and reported. Kasselman adds San Francisco International Airport quickly found that a solution was close at hand. Rideshare companies already collected the information they needed they simply needed to develop a means of transferring that information to the airport. “San Francisco had to develop technology that could receive that information and figure out what to do with it,” he says.
The pilot produced a system that tracks app-based ground transportation (ABT) transactions in the airport environment within a designated GPS "geo-fence" area for fee calculation, roadway planning and facility improvement efforts. San Francisco later partnered with the American Association of Airport Executives (AAAE) to license the product for use at airports across the country.
“There is now literally no need for any kind of equipment at the airport to physically register when a vehicle enters and exits because … through GPS tracking we’re able to determine exactly when a rideshare vehicle enters airport property on a trip and we communicate that information directly to the airport,” Kasselman says. “All of the infrastructure is already there, and there’s no additional cost for the airport, other than on the engineering side.”
Nashville airport uses a similar geofencing system to track rideshare trips. Sumrall says the airport set up the geofence parameters and charges drivers a trip fee once they enter this area. They have 20 minutes to pick up or drop off, or they will be charged again.
And, San Jose International Airport’s system even separates pickups from drop offs. Swensen explains this was key because the San Jose City Council recently voted to allow anyone to drop off at the airport free of charge. “Ground transportation companies only pay for pickups,” he says.
While the technology exists, TransCore’s Swonsen questions whether it is enough. Currently, the software provides a trip summary to airports. “Airports basically get a summary report and a check,” he says. “At the end of the day it would probably be best for everybody, certainly the airport, to have TNCs send electronic way-bill information instead. However, rideshares are hesitant to provide raw electronic way-bill information—they’d rather summarize it in a report for airports.”
But Bakari Brock, director of business development at Lyft, says current technology offers complete transparency. “With this technology, we’re able to monitor when drivers enter and exit the property, and accurately transmit all information back to the airport,” he says.
SUBHEAD: Name the Insured
Subhead: Set the Stage
Staging areas for rideshare vehicles also rears its head in talks with airports, admits Kasselman. Most airports let rideshare drivers mill around just outside the airport, which for a smaller airport works fine but at an airport the size of Los Angeles International Airport it becomes an issue. “If you’re at a mid-sized airport, there’s no large areas for queues, but there are not as many vehicles going to and from,” he says. “But at large airports, there needs to be holding areas for drivers to wait or the area becomes quite congested.”
The challenge becomes getting to passengers quickly in these cases because without a holding area, rideshare drivers get caught up in a traffic bottleneck at the ground transportation entrance. “Regulating flow becomes a real challenge for airports,” Kasselman says. And it doesn’t end once they get to the airport curb, Kasselman says the issue then becomes: “How do you reduce curbside churn and make that more efficient?”
Wait space is a significant challenge, agrees Yakel. Airports need to look at how to integrate a new form of ground transportation into an existing footprint. “Some airports have more real estate to grow than others,” he adds.
Nashville opted to provide rideshare companies a spot on its property by its maintenance facility. TNC drivers can sit there and wait for passengers, and they do not get charged. Uber and Lyft also rent parking spaces where drivers can wait. “We just didn’t want them hanging out on the roadway, and if they do, they will be charged multiple times,” Sumrall says.
San Jose has gone so far as to assign a pickup area for rideshare companies. Drivers direct passengers to that area for pickup. “Airports have been struggling with whether or not to provide a staging area for TNCs on airport property,” says Swensen. “We decided we don’t want to do that. We feel it’s a prearranged service where the TNC does not provide the service unless it’s requested by a customer. There is a definite difference between TNC operations being in a prearranged mode versus an on-demand mode like a taxi, therefore we are approaching them differently.”
At the same time, Yakel says “If you’re going to integrate a new form of transportation as a public agency, you’re obligated to hold everybody to the same standard.”
As airports in California and Tennessee have already learned, when airports and TNCs throw a few more Cs--cooperation, communication and collaboration-- into the mix, they level the ground transportation playing field and provide a service passengers want and appreciate for its convenience, customer service and cost.
