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9 Survey Information To make this document more useful to the average reader, a brief discussion of the basic systems for airport commercial ground transportation regulation has been included. AIRPORT REGULATORY SCHEME REVIEW An airportâs system for regulating commercial ground transportation can be described as closed, open, or semi-closed. This section addresses each type of scheme as each system has distinguishing characteristics, costs, and benefits. Closed System Characteristics and Trademarks of a Closed System A closed commercial ground transportation system is one where the right to serve the airportâs passengers is limited to certain companies. Typically, a commercial operator wins a bidding process and is allowed to provide ground transportation for a set period of time. The contract is usually very detailed and requires the operator to meet numerous service and quality obligations. In addition, the contracting authority almost always sets fares. The operator may or may not have exclusive rights to provide service. Larger airports require more types of transportation services, and may award several contracts to meet their needs. Benefits and Costs Benefits: ⢠Direct airport control. The airport can easily mandate that service be provided to certain areas, at certain times, and with acceptable quality. Proper contracting gives the airport significant control over contractor operations. ⢠Easier enforcement. When only authorized operators are permitted, rule enforcement is easier because there are only a limited and identified number of operators, and operators have contractual incentives to comply with airport rules. Costs: ⢠System overhead. To implement a closed system, an authority must invest human resources to develop the system, work with operators, and enforce agreement terms. ⢠Lack of competition. Once an operator has locked in the right to serve an airport, new entrants are not permitted. This creates an additional barrier to entry, potentially alters cost structures, and new operators will have a more difficult time during subsequent bids and negotiations. Examples of Airports Washington-Dulles International Airport (IAD) Albuquerque International Sunport (ABQ)
10 Open Systems Characteristics and Trademarks of an Open System Open systems allow any operator to pick up passengers. This does not mean that taxicabs unlicensed by the appropriate city or state body are permitted, but rather that the airport itself does not limit which operators may serve its passengers. Open systems still regulate commercial ground transportation. These systems almost always restrict how and where transportation is offered. Many systems charge fees or require the operator to notify the airport before serving passengers. The hallmark of an open system, however, is that it does not restrict the number of operators as long as they comply with airport rules. Benefits and Costs Benefits: ⢠Easy and inexpensive to maintain. With fewer rules and restrictions, an airport does not need to invest significant resources into developing agreements or overseeing commercial operators. Costs: ⢠Lack of control. Operators have less incentive to comply with airport rules if they do not risk losing the right to service the airport. Fines and penalties are more difficult to impose without the strong oversight system of a more closed system. ⢠Service and availability may suffer. Open system airports cannot require operators to serve the airport at less profitable times or in less profitable manners. Therefore, open systems tend to have more problems with short-trip refusals and late-night/off-peak services. Examples of Airports Philadelphia International Airport (PHL) Chicago OâHare International Airport (ORD) Semi-Closed Systems Characteristics and Trademarks of a Semi-Closed System A semi-closed system is one where operators may only serve the airport after complying with numerous airport requirements. The number of operators is not limited. Authorized users are usually afforded more freedom than under a purely closed system. Typical requirements include: 1. Proof of insurance. 2. Driver background checks. 3. Vehicle inspections.
