Guidebook for Developing and Managing Airport Contracts (2010)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

44 Ground transportation, a substantial customer service component for airports, involves the coordination of baggage delivery services, chartered transportation, courier services, courtesy vehicles, shuttles, taxicabs, and public transportation. 5.1 Trends in Ground Transportation Agreements Trends in ground transportation agreements are as follows: • Management of ground transportation • Technology advances • Compliance with local regulations • Taxicabs—open or closed systems • Airport access fees • Rules for solicitation • Public transportation agreements • Forms of ground transportation agreements 5.1.1 Management of Ground Transportation Historically, airports have included the management of ground transportation with parking. Best-practice airports have split the management function and assigned the ground transportation responsibilities to separate staff or contract with a third-party management company to provide coordination. 5.1.2 Technology Advances Installation of automated vehicle identifications (AVI) systems has significantly improved the ability of airports to manage the ground transportation flow and capture the associated revenues due the airport. As airports install AVI systems, airports may consider contracting the management and operation of the system as well as overall ground transportation coordination to a third-party contractor. 5.1.3 Compliance with Local Regulations The requirements and contractual issues for each component of ground transportation must comply with local regulations and ordinances, particularly with regard to taxicabs, limousines, and public transportation. Often local ordinances govern where and how passengers can be picked up and dropped off and may also dictate the fares that can charged. C H A P T E R 5 Ground Transportation Agreements

5.1.4 Taxicabs—Open or Closed System Taxicabs may operate under an open system where any legitimate taxicab operator can pick up a fare at the airport. Under a closed system, the airport restricts the entities that can pick up pas- sengers from the airport. Large urban areas such as New York and Chicago have medallion systems that taxicab owners purchase and lease to the taxicab drivers. The medallion fees have a significant economic impact on the operating costs for taxicab drivers as well as controlling the availability of taxicabs in a locale. Washington’s Dulles International Airport (IAD) is an example of an airport having a closed taxi system because of the long distance between IAD and downtown Washington, D.C. As a result, the Washington Flyer has exclusive rights to pick up fares at IAD. The airport takes the position that the distance from downtown would be an economic deterrent to keeping the nec- essary supply of taxicabs at IAD under an open system. 5.1.5 Airport Access Fees Airport access for ground transportation providers most often requires a permit for a specified fee. Airports may set forth requirements and applications for permits in contractual agreements or through local ordinances. Designated areas for passenger pick-up and drop-off should be assigned and properly identified with signage. For larger airports, commercial vehicle staging areas may be utilized. 5.1.6 Rules for Solicitation Airports may create rules for solicitation of passengers and/or have designated agents or points of contact to arrange ground transportation. Typically, ground transportation pro- viders have representation in centralized areas inside and outside of terminal areas. Appro- priate wayfinding is critical to direct passengers to the appropriate ground transportation provider. 5.1.7 Public Transportation Agreements Public transportation may require a contractual agreement between the airport and the pub- lic transportation agency. These agreements may arise from extensions of public transportation routes to the airport property, construction of multimodal facilities/shelters/transit stations, extension of service hours and transport of airport employees. The agreement may involve pay- ment of compensation from one party such as the airport to/from the public transportation agency. 5.1.8 Forms of Ground Transportation Agreements For the purposes of this chapter, the terms “contract” and “agreement” may refer to actual contract instruments, but in many cases will refer to “permits,” which are the preferred method of regulating ground transportation providers. These permits are much easier to put in place with a group of operators that come and go frequently and, even more frequently, add and remove vehicles from their fleets. The permits will typically refer to a much more comprehen- sive set of rules and regulations that govern ground transportation functions. References to lan- guage for contracts might instead be in a rules and regulations document; for this chapter, however, the discussion of contract language may refer to either a contract or rules/regulations document. Ground Transportation Agreements 45

5.2 Definitions Because ground transportation regulations must apply to various providers with different types of operations, a definitions section must be as detailed and complete as possible. Sponsors should define as many relevant terms as possible, even those which may be considered slang or colloquial. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for definitions in the PIT Ground Transportation Rules & Regulations. 5.3 Critical Issues in Ground Transportation Issues critical for airport managers to consider when developing ground transportation con- tracts are as follows: • Define purpose and areas served • Compliance with local licensing • Vehicle safety requirements and inspection • Vehicle condition and appearance • Driver requirements and appearance • Permitting • Compensation • Enforcement • Customer services • Insurance 5.3.1 Define Purposes and Areas Served All modes of ground transportation may need to have a defined service area on-airport that restricts their movements to areas approved by airport management. These restrictions help an airport control vehicle traffic flow, as well as count trips made by these vehicles if their rate struc- ture includes a per trip fee. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the PIT Ground Transportation Rules & Regulations designating the curb area for loading and unloading passengers. 5.3.2 Compliance with Local Licensing Operators of all transportation modes must comply with local ordinances with regard to driver’s licenses, vehicle registrations, providing public transportation or transportation for hire, and permits. In some cases, licensing may be complicated in that multiple jurisdictions are served. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for an excerpt from the PIT Ground Transportation Rules & Regulations addressing intrastate and interstate regulations. 5.3.3 Vehicle Safety Requirements and Inspection State or local regulations may control; otherwise the contract may set forth maintenance schedules or may provide for periodic inspections. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for an excerpt from the SMF Ground Transportation Rules & Regulations regarding vehicle inspections. 46 Guidebook for Developing and Managing Airport Contracts

5.3.4 Vehicle Condition and Appearance Airport managers understand that for many deplaning passengers, the ground transportation system is one of the first opportunities for a visitor to form an impression of the airport and its community. To help ensure a positive impression, airports are now adopting more restrictive language regarding vehicle condition and appearance. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the SMF Ground Transportation Rules & Regulations regarding vehicle appear- ance and vehicle standards. Another way to ensure good vehicle condition is to prohibit vehicles beyond a certain age from operating at the airport. Although it is difficult to place restrictions on the age of very large fleets, such as taxis, it is possible with small fleets such as those providing on-demand van service. Some airports have strict restrictions that vehicles be no more than a certain age. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the JAX On-Demand Service Agreement requiring that the vehicles be no less than 3 years old. 5.3.5 Driver Requirements and Appearance Requirements for ground transportation drivers accessing the airport are also becoming more stringent. Some airports specify requirements for licensing and compliance with laws as well as customer service standards such as the following: • Require drivers to comply with local laws and regulations as well as airport rules and regulations • Require drivers to obey lawful orders and directions of airport law enforcement personnel and other airport officials • Possess a valid state driver’s license • Be registered with the airport operation • Understand the airport rules and regulations • Be knowledgeable of local geography • Be able to communicate with passengers • Be courteous to the public at all times • Solicitation of passengers • Sale of other products • No unattended vehicles • No deception of the public • Provide receipts • Display schedule and rate information • Credit card acceptance • No solicitation of gratuities 5.3.6 Permitting For permit applications, the focus should be on obtaining as much information as reason- ably possible about the companies that would be operating on the airport. In addition to a busi- ness name, corporate officers, owners, and managers must be provided. Attached to a permit application should be all required insurance forms, driver and vehicle information forms, AVI forms, and government certification forms (as required). If the application is accompanied by a Route Sheet describing the proposed hours of service route scheduled for each day of the week, the sponsor can work with an operator to arrive at a schedule that can be accommodated at the airport. Ground Transportation Agreements 47

Also, requiring credit card information for billing purposes ensures a more consistent cash flow and allows regular billing of the operator for all AVI trips recorded. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the CMH Permit Package and Ground Transportation Regulations. 5.3.7 Compensation Airports may receive compensation in the form of concession fees, permit fees, space rents, and/or percentages of revenues. Whenever possible, airports should incorporate technology in the form of an AVI or similar system, because it has been shown that the presence of these reveals significantly more trips to the ground transportation center occurring at the airport than are reported without one. The compensation system requires precise language in order to eliminate confusion for the operator as to how fees are calculated. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the BWI Pre-Arranged Shuttle Agreement regarding reporting of gross revenues and the payment of percentage concession fees. 5.3.8 Enforcement Defining violations and enforcing mitigation and penalties can be very difficult without detailed language. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the PIT Ground Transportation Rules and Regulations defining acts constitut- ing violations, procedures for issuance of notices of violation, hearings procedures, and penalties. 5.3.9 Customer Service Regardless of the type of service provided, there are various ways to use language in the regu- lations or a contract to ensure superior customer service. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for excerpts from the JAX On-Demand Van Services Agreement defining service expectations. 5.3.10 Insurance Ground transportation operations present numerous possibilities for accidents or other events that require the involvement of insurance policies. It is critical that airports require every operator to maintain sufficient coverage. See CRP-CD-81 (enclosed herein), Appendix to Chapter 5, Ground Transportation Agreements, for an excerpt from the SMF Ground Transportation Rules & Regulations regarding insurance requirements. 48 Guidebook for Developing and Managing Airport Contracts