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 or Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.
But that’s not the case for airports in many parts of the country. 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.
Those trends 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 collect from ride-hailing services does 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.
Henry Harteveldt, travel analyst for Atmosphere Research, said the 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 nearly $1.8 billion. The combination far exceeded the fees the airports collected from food and beverage outlets, retail stores and hotels.
To generate revenue, some airports charge ride-hailing services to pick up or drop off passengers.
That’s the case in the Bay Area, where airports report that the impact of ride-hailing is nuanced, and somewhat offset by growth in passenger volume.
San Francisco International Airport charges Uber, Lyft and Wingz $3.80 per ride and took in $21.8 million from the three in 2016. In October, ride-hailing fees amounted to $2.9 million, compared with $579,425 in taxi revenue. (Taxis pay a $5 fee for pickups only; ride-hailing companies pay for both directions.) Taxi revenues slid 3.4 percent in fiscal year 2016-17 from the prior year.
SFO continues to see increases in passenger volume overall. While it’s seen a slight revenue reduction in some categories such as parking, that’s not strictly related to ride-hailing, according to SFO spokesman Doug Yakel. “In the case of parking, for example, current construction activity has reduced the available capacity in our Long-Term Lot, which will change in 2019 with the opening of a second long-term parking facility,” he said in an email.
SFO created its own GPS tracking system for ride-hailing cars and licenses it to other airports, but that wasn’t intended as a revenue generator, he said. With 14 airports nationwide using it, SFO has collected $11,000 in total as of mid-2017.
At Oakland International Airport, “The rise of (ride-hailing companies) has caused volume and revenue from all other airport access modes to decline,” airport spokeswoman Keonnis Taylor said in an email.
Ride-hailing company fees bring in about half a million dollars a month, she said. The per-ride fee will be $3.70 in January. Taxi and limo fees for fiscal year 2017 were $460,000, a 30 percent decline from recent years. Taxis pay $3.50 per ride.
While overall parking revenues have increased with more passengers, per-passenger transaction volume is down 10 percent. “We estimate that car rentals per passenger have declined 12 percent to 15 percent,” she said. Taxi volume is down 40 percent, and shuttle van volume is down by 60 percent since ride-hailing was introduced, she said.
Ride-hailing companies got permission to operate at the two Bay Area airports in late 2014 and early 2015, but were unofficially giving rides before then.
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 is one California 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 an Uber. “I gave up driving to increase time and efficiency,” he said.
Airports 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.
Airport parking also faces competition from off-airport hotels. “Hotels can forecast very accurately how much parking capacity is available on any given day,” said Bjorn Hanson, clinical professor at the Jonathan M. Tisch Center for Hospitality and Tourism at New York University. They can gain revenue, he said, for little additional expense.
As complex as airport parking rates are now, Perry said, airports could be more creative. “Parking is one of the most underutilized resources,” he said, and with technology, parking prices can be adjusted by the day of the week, time of day, location and level of service.
Some airport economists say it’s only a matter of time before fees for ride-hailing companies approach those of traditional taxi companies. Ray Mundy, director of the Center for Transportation Studies at the University of Missouri-St. Louis, said he did not expect ride-hailing companies “to continue to expand at the same rate” once fares rise to cover costs. And, he said, airports may also impose new fees.
Kinsel, the ride-hailing enthusiast, is staying the course. On a recent trip to Ronald Reagan Washington National Airport, he said, he ordered a car from Uber as the plane pulled up to the gate. He was downtown in less than 15 minutes after the plane landed. “It was the equivalent of having a private car,” he said.
