Transportation Network Companies: Challenges and Opportunities for Airport Operators (2017)

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17 This chapter describes how airports regulate TNCs operations. It describes (1) airport permits or agreements and the accompanying regulations in general; (2) the locations used for airline passenger drop-off and pickup; (3) vehicle staging; (4) the types and amounts of fees airports charge TNCs; (5) reporting of trip volumes by TNCs; and (6) enforcement of TNC operations by airport staff. 3.1 Permits/Agreements And regulAtions Airports regulate TNCs and other commercial ground transportation vehicles to ensure the safety of their passengers and maintain a secure environment. Airports charge TNCs and other commercial ground transportation vehicles fees so that they may operate in a financially self-sustaining manner as required by FAA. Most airports require that all commercial ground transportation operators, including TNCs, doing business at the airport (i.e., picking up or dropping off passengers) enter into a formal business agree- ment with the airport. By signing a formal business agreement and obtaining an airport-issued permit, commercial ground transportation operators demonstrate that they possess insurance in the amounts and types required by the airport; possess the necessary state and local operating authority or license; and agree to comply with airport rules and regulations, including those related to vehicle safety, appearance, and operations; driver appearance, training, and behavior; and payment of required airport fees. When regulating TNCs, airports rely on the rules and regulations established by state and local juris- dictions, including the minimum standards for vehicles and drivers, but may supplement these regulations with airport-specific rules and regulations included in the airport permit. The airport-specific rules regu- late the operations of the TNC as well as the individual TNC drivers or other company representatives. TNCs, rather than the airports, (1) provide drivers with an electronic identification available at the request of police or other enforcement staff, and (2) if required, provide the airport with the license plate numbers of the vehicles that operated on the airport during the past month rather than all those that may serve the airport in the future. In contrast, airports require each commercial vehicle business (e.g., taxicabs and limousines) to provide the name and license plate number of each vehicle operating on the airport and that each vehicle and frequently each driver obtain a permit directly from the airport. The following paragraphs summarize the key contents of a typical airport TNC permit or agree- ment. Sections 3.2 through 3.6 of this chapter describe the key regulations contained in a typical airport TNC permit. Examples of airport TNC permits can be found at the ACI-NA Ride-Booking (TNCs) Resource Page (Airports Council International–North America 2016). Airport-specific regulations pertaining to TNCs include those requiring that the company: • Comply with regulations established by state or other local jurisdictions. • Maintain required liability insurance in the specified amounts and types, which may exceed the amounts required by the state or local jurisdiction licensing the TNC. • Pay required airport fees. As described in subsequent sections of this report, payment of such fees may involve monitoring and reporting the number of vehicle trips transporting customers chapter three How trAnsPortAtion network ComPAnies oPerAte At AirPorts

18 out of or into the airport, providing required supporting data (e.g., monthly trips as well as the vehicle identification/license plate number and driver identification number associated with these trips), and allowing the airport or its representative to audit the company’s records. • Establish a geofence—a virtual boundary around an airport defined by GPS coordinates— defined by the airport to monitor the number of vehicle trips made by the company’s drivers. • Train drivers in the required procedures to follow while operating on airport property, including the use of airport roadways and prescribed locations for passenger drop-off and pickup and vehicle staging. • Take remedial action upon notice by the airport staff of behavior or appearance of a TNC driver or other company representative who is not in accord with airport rules and regulations. • Comply with the airport’s general rules and regulations or any established by the FAA, including those regarding environmental rules and nondiscrimination. Airport-specific regulations pertaining to TNC drivers and other company representatives vary at different airports but may include those related to: • Operation of vehicles on airport roadways and obeying posted signs; • Designated locations for passenger drop-off and pickup and vehicle staging area; • Display of company trade dress (vehicle identification) and airport-issued placard or identifier; • Possession of driver identification/digital identification (e.g., a unique identifier for each TNC driver allows police or appropriate airport staff to confirm the driver’s identification and driver’s license number); • Payment of airport fees; • Compliance with the airport’s overall rules and regulations, which apply to all airport tenants and businesses and therefore may be an attachment to the TNC rules (e.g., requirement to behave in an orderly and proper manner while on the airport, display courtesy toward the public and airline staff, use of airport property, and so forth). The initiation of TNC service required many airports to revise their ground transportation rules and regulations to address the unique aspects of TNC operations. Some airports created a new permit or agreement incorporating specific rules for TNCs. Other airports modified their existing rules and regulations to recognize this new form of commercial ground transportation service. Because of the industry’s limited experience regulating TNCs, many of the airports issuing TNC agreements or permits in 2015 and 2016 did so as part of a pilot program or by issuing a temporary permit. These pilot programs enabled airport staff to modify, cancel, or extend the temporary permit as needed based on their increasing familiarity with TNC operations on their airport and the compa- nies providing these services. Typically, the term of these pilot programs was 6 to 12 months. More recently, airports are issuing TNC permits with terms of 2 years or more, reflecting the industry’s increasing knowledge of TNC operations. Some airports have also had difficulty modifying original pilot programs to include additional regulations or requirements. TNCs have signed agreements at 48 of the responding airports and are operating at the remainder without a permit. Of these 48 airports, 17 (35%) are large hubs, 17 (35%) are medium hubs, and 14 (29%) are small hubs. As shown in Figure 5, of the airports responding to the survey, five issued permits before 2015, 23 issued permits in 2015, and 15 issued permits in 2016 (five did not indicate in which year TNCs first signed a permit). As noted, most of the airports issuing permits in 2015 were medium hubs, whereas most issuing permits in 2016 were small hubs. 3.2 Customer droP-off And PiCkuP Many airports separate the commercial vehicle and private vehicle curbside areas to improve customer safety, traffic flow, and the ability of airport staff to better manage roadway operations. Airports often restrict where commercial ground transportation vehicles may drop off and pick up airline passengers to provide for safe and efficient roadway operations and allocate the available terminal curb space (or other designated passenger boarding/alighting areas) in a manner that reflects the policies of airport

19 management. Often commercial vehicle curb space is allocated to encourage the use of public transit/ scheduled buses, reflect customer level of service expectations, provide for required vehicle maneu- verability (e.g., large buses require larger spaces), provide equivalent access to competing businesses, or prioritize businesses contributing to airport revenues (e.g., rental car and airport-operated parking shuttles). At most airports, TNCs drop off customers at the same location as do private vehicles (e.g., the departures curbside adjacent to the ticketing lobby/baggage drop area). Table 1 indicates the distribu- tion of TNC pickup locations based on the survey results. At some airports, access to the commercial vehicle boarding areas is controlled by barrier gates, and only authorized commercial vehicles (i.e., those with airport permits) can gain access to such areas. At these airports, authorized commercial vehicle operators are issued automatic vehicle iden- tification (AVI) tags or proximity cards by the airport to enable the drivers to active the gate arms. Although TNCs are considered commercial vehicles, it is not possible to issue AVI tags or proximity cards to individual TNC drivers or vehicles because of the large number of drivers and their high turnover rate. Thus, TNCs must use the private vehicle boarding areas or another location (e.g., a parking structure) at airports with gate-controlled commercial vehicle boarding zones. Airports that require TNCs to pick up passengers at the commercial vehicle curbside boarding area frequently reserve a specific curbside pickup zone or curbside area for TNCs. At these air- ports, TNCs may pick up passengers only while the vehicles are stopped in the designated zones. Designated TNC passenger boarding zones may be located at the arrivals/bag claim area or at the departures/ticketing area. Figure 6 depicts the designated loading zone at Portland International Airport. The lengths of the designated TNC pickup zones vary, but typically they are large enough to accom- modate one to five TNC vehicles. The demand for curb space at an airport frequently exceeds the available capacity, with the capacity limited by the roadway length and other physical constraints. As noted, when allocating the limited curb space to private and commercial vehicles, including TNCs, airport staff consider the demand for each transportation service and other goals of the airport (e.g., encouraging the use of transit). Recognizing the increased demand for TNCs and reduced demand for other services, several airports have or are considering increasing the space allocated to TNCs. FIGURE 5 Distribution of TNC permit start year at airports. Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016).

20 Airports often designate alternative boarding areas for TNC customers, particularly when there is insufficient curbside capacity to accommodate TNC vehicles or if the adjacent curbside roadways are frequently congested. To supplement the traditional curbside boarding areas, at some airports spaces in adjacent parking facilities are reserved for TNCs picking up passengers. Passenger pickup occurs in the parking structures (or ground transportation centers) at the airports serving Harrisburg, Las Vegas, New Orleans, and Seattle; in surface parking lots at the airports serving Cleveland and San Diego (Terminal 1 only); and adjacent to the rental car facility at Tucson International Airport. It is anticipated that as demand for TNCs increases, additional airports will provide alternative boarding areas, such as in a parking facility. 3.3 VeHiCle stAging And Holding In urban centers and other locations, TNC customers requesting a ride are assigned to the nearest driver. Initially, TNC drivers followed this same operating procedure at airports when responding to requests from arriving airline passengers. This procedure led to concerns about vehicles contributing to roadway congestion and causing unsafe conditions as TNC drivers drove slowly past the curbsides waiting for arriving passengers or improperly parked on roadway shoulders near the terminals or in cellphone waiting areas (intended for the sole use of private motorists picking up airline passengers). To address these concerns, in coordination with the TNCs, airports established waiting areas for TNC FIGURE 6 Commercial vehicle boarding zones at Portland International Airport. Source: Portland International Airport (September 2015). Commercial Roadway Entrances Scheduled Services TNC Boarding Zone Transportation Network Companies Courtesy Shuttles Charter Buses On-Demand Shuttle Services On-Demand Executive Cars Info Booth Taxis

21 drivers (i.e., vehicle staging or holding lots) and required that only drivers parked in such areas could be assigned a customer. With input from airport staff, the TNCs defined a geofence around the airport and around the designated staging area, allowing only drivers parked in this area to receive requests, with drivers parked in other airport locations “blacked out” by the company on their app. Most airports (97% of those responding to the question) define the geographic coordinates of a geo- fence around the entire airport property or just its terminal area. Of the reporting airports that have a geofence, 44% define a supplemental geofence around their TNC vehicle staging area to ensure that only drivers waiting in the staging area receive customer requests. A sample geofence as defined in the Cincinnati/Northern Kentucky International Airport (CVG) permit is shown in Figure 7. CVG also has a separate geofence around its staging area. FIGURE 7 Sample geofence boundary surrounding the entire airport. Source: Cincinnati/Northern Kentucky International Airport (April 2015).

22 Typically, the TNC staging area consists of a surface parking lot dedicated solely for use by TNC drivers. Of the airports surveyed, 82% provided a dedicated staging area—a surface lot (55%), an area within a parking structure (20%), or an area also used by taxicab, limousine, and other commercial ground transportation drivers (7%). Many airports provide dedicated staging areas for TNC drivers, distinct from those provided taxicab and other commercial vehicle drivers because of the number of waiting drivers and the competition among them. These staging areas can be two distinct parking lots, or a single lot with fences or barriers separating the individual ground transportation services. The size of the TNC staging area varies reflecting the size of the airport and volume of TNC customers but typically provides 40 to more than 200 spaces (e.g., the TNC staging area at Denver International Airport provides 146 marked parking spaces, with room for future expansion). About 82% of the airports surveyed provide a staging area for TNC drivers. The lack of a staging area may reflect a management policy requiring TNC drivers to stage off of the airport (e.g., Salt Lake City International Airport), a lack of available space on the airport (e.g., John Wayne Airport), or the absence of a TNC permit (e.g., TNCs are not permitted to legally pick up airline passengers). At airports, TNC drivers are often assigned customers on a first-in, first-out basis rather than the proximity basis used elsewhere. Drivers working for some companies can see how many TNC drivers are ahead of them in the queue and decide, based on the expected waiting time, whether to seek customers elsewhere. TNC drivers rarely wait more than an hour or two for a customer at the airport. As noted, airports provide staging areas for other commercial ground transportation vehicles, including taxicabs, limousines, shared-ride vans, and charter buses. The drivers of such vehicles are required to park in these lots and remain with their vehicle until they are summoned or dispatched to the terminal to pick up an arriving passenger. Taxicab drivers may wait in the staging lot for 2 to 4 hours or even longer at many airports. To accommodate the needs of these waiting taxicab drivers, airports provide enclosed lounges for drivers; the lounges contain seating, restrooms, vending machines, and other amenities. Equivalent facilities are generally not provided for TNC drivers because of their shorter wait times. Typically, the amenities provided TNC drivers are limited to portable toilets. At airports, customers requesting TNC service may wait longer than they do in an urban environ- ment, depending on the airport’s layout and rules. To reduce customer waiting times, TNC staging areas are located as close as possible but ideally no more than a 5-minute drive from the passenger pickup area at the terminal. This location enables TNC drivers to respond promptly to customer requests and provide expected levels of service. However, occasionally roadway congestion or other factors delay drivers and increase customer wait times. To improve customer service, both Uber and Lyft are testing “dynamic dispatching” procedures. Using these procedures, TNCs can direct a driver to exit the staging area and proceed to the terminal curbside before receiving a customer request, based on the company’s analysis of historical passenger demand patterns and airline schedules. The TNCs are also testing procedures to allow a driver who is dropping off a passenger to immediately be paired with a deplaning passenger for pick up without the driver having to return to the staging area. The goal of these procedures is to minimize congestion, vehicle miles traveled, and customer wait times. 3.4 AirPort trAnsPortAtion network ComPAny fees Airports are required to be financially self-sustaining. They rely on the fees and charges paid by the airlines and other tenants, including commercial ground transportation and rental car businesses as well as revenues from public parking, to fund required capital improvements and pay operating and maintenance expenses. Airports do not obtain direct financial support from local taxpayers. As such, airports require that all companies doing business on the airport contribute to the costs of providing, operating, and maintaining airport facilities. Accordingly, 46 of the 47 surveyed airports where TNCs are operating with an airport permit require that TNCs pay one or more of the follow- ing fees.

23 3.4.1 Annual Permit fee At some airports, the permit fee is intended to compensate the airport for its associated administrative costs. Of the airports surveyed, ten charge TNCs an annual permit fee—six charge each company less than $2,000 per year, three charge $2,000 to $4,000 per year, and one (Pittsburgh International) charges $12,000 per year. Three airports require that TNCs pay only an annual permit fee, whereas the remaining seven airports also charge a per-trip fee. 3.4.2 Per-trip fee More than 50 U.S. airports require commercial ground transportation businesses to pay fees that are calculated based on a commercial vehicle operator’s volume of airport-related business as indicated by the number of vehicle trips. Consequently, these airport fees are frequently referred to as per-trip fees. To monitor and record the volume of vehicles trips made by most traditional commercial ground transportation business, many airports, particularly large- and medium-hub airports, use vehicle- mounted AVI tags. Airports cannot use vehicle-mounted AVI tags to monitor TNC trips because of (1) the high turnover rate of TNC drivers and vehicles, (2) the use of personally owned and leased vehicles by drivers, and (3) the companies being unwilling to provide a list of all vehicles affiliated with the company that could serve the airport. Thus, it is not feasible for airports to issue AVI tags to TNC vehicles or use an AVI system to monitor the volume of vehicle trips. Instead, airports use GPS-based geofence(s) to monitor the volume of TNC trips, as described in subsequent paragraphs. Of the surveyed airports, 87% require that TNCs pay a per-trip fee either alone or in combina- tion with another fee. Some airports charge a per-trip fee only for passenger pickup (59% of those charging per-trip fees), whereas the remaining 41% do so for both passenger drop-off and pickup. Table 2 presents the amount of the per-trip fees airports reported charging TNCs. The fees charged for pickup only ranged from $1.00 to $5.00 per trip, whereas those charged for drop-off and pickup ranged from $1.00 to $4.00. The largest percentage of surveyed airports (35%) charge between $2.00 and $2.99 for either passenger pickup only or passenger drop-off and pickup. One airport (Harrisburg International) charges a $3.40 fee for passenger pickup as well as a separate fee per trip for access to the designated passenger pickup area in a parking structure. Figure 8 presents the reported per-trip fees by airport size. The per-trip fees were established (1) to be consistent with the fees charged taxicabs and/or limousines—the primary basis used by about 52% of the reporting airports, (2) considering the fees FIGURE 8 TNC per-trip fee amounts by airport size. Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016).

24 charged by peer airports (15% of reporting airports), (3) through negotiations with the TNCs (13% of reporting airports), and/or (4) to allow the airport to recover its estimated costs (20% of report- ing airports). Many airports based their fees on more than one of these factors. The decision as to whether to charge for passenger pickup only or for both drop-off and pickup appears to reflect these same considerations. 3.4.3 Activation fee Some airports require TNCs to pay an activation fee in recognition that the companies were conduct- ing business on the airport before signing a permit with the airport and to compensate the airport for the fees the TNC would have paid were it operating with a permit. At airports that have charged activation fees, the TNCs were often presented with a choice: (1) pay the amount of per-trip fees the company would owe the airport for the trips taken to and/or from the airport before signing the airport permit, or (2) pay a fixed fee amount established by the airport. Eight airports reported charging TNCs an activation fee at the time they signed the airport permit. The amount of the activation fee charged varied considerably from airport to airport, with one airport charging between $1,000 and $2,000, one airport charging between $5,000 and $10,000, two airports charging between $50,000 and $100,000, and one airport charging $100,000 (San Francisco Inter- national Airport). 3.4.4 minimum Annual guarantee Amount Los Angeles International Airport reported charging TNCs the higher of either a per-trip fee or a mini- mum annual guarantee (MAG) amount. Other airports (e.g., Oakland and Savannah International Air- port) included the MAG amounts in their initial pilot program permits but removed the MAG in the following version of the permit because the revenues received from per-trip fees were higher than the agreed-upon MAG. For example, Los Angeles International Airport requires each TNC to pay the higher of the per-trip fee (currently $4.00 per trip) or the MAG, which is $25,000 per month—an amount that equates to 6,250 trips per month. As of December 2016, both Uber and Lyft were making more than 6,250 trips per month at Los Angeles International and thus paying the actual per-trip fee amount. 3.5 rePorting of trAnsPortAtion network ComPAny triP Volumes At airports that charge TNCs a per-trip fee, each TNC is required to report the number of airport trips its drivers made during the prior month. This process, referred to as “self-reporting” requires that, at a minimum, each TNC report the monthly volume of airport trips made by their drivers—either for pickup only or for drop-off and pickup—as required by airport regulations. Based on these trip vol- umes, the TNC is required to calculate the fees due to the airport and pay that amount on a monthly basis. Some airports require that the TNCs provide additional information to support the reported number of monthly trips and the fees due. This additional information may include, for each individ- ual trip, the time and date of the trip, the driver’s ID, vehicle ID (e.g., license plate number or airport placard number), and whether the driver was dropping off a passenger, picking up, or both. An airport’s TNC permit defines the information that TNCs are required to submit, the schedule or frequency for submitting this information, and the format to be used when submitting the required information. The airport TNC permit also defines what is considered an airport trip and how the trip is to be recorded by the TNC. Depending on the agreement, an airport trip is defined as a TNC vehicle entering and/or exiting either the entire airport or its terminal area. In their TNC permits, many airports also require that each TNC incorporate the defined geofence in their platform and monitor when a driver using their platform crosses the geofence. Using the GPS-based signals generated by a driver’s smartphone, TNCs can record (1) when and where a driver using the TNC’s app enters and exits the airport, and (2) whether or not the driver has a passenger in

25 the vehicle. (Trips made by drivers on personal business whose app is turned off are not recorded.) The resulting trip data can be summarized to indicate the number of trips that are drop-offs, pickups, or linked trips (i.e., a drop-off followed immediately by a pickup without the driver returning to the staging area, if linked trips are allowed by the airport). 3.6 enforCement of trAnsPortAtion network ComPAny oPerAtions Airports seek to ensure that TNCs and their drivers are operating in compliance with airport rules and regulations, and accurately paying the required airport fees. Airports strictly enforce their rules and regulations, as described in the airport permit, to ensure the safety of the traveling public and the efficient use of airport roadways. The following paragraphs summarize the airport staff responsible for enforcement of TNCs and the challenges they face. These enforcement responsibilities are in addition to those associated with enforcing the use of curbside roadways by TNCs and other vehicles. 3.6.1 enforcement responsibilities Most airports (87% of those responding) rely on curbside traffic officers or airport operations staff to enforce TNC rules and regulations, with police either supporting these traffic officers or being solely responsible at nearly half of the responding airports. As shown in Table 3, the use of traffic control officers and police is the most prevalent method of enforcement. Vehicle tracking systems and soft- ware used to support these personnel are described in Section 3.6.4. During the interviews of airport staff, those who indicated that additional enforcement staff had been retained were asked about the number of staff and their responsibilities. Most (74%) of the air- ports responding to the survey indicated they had not hired additional staff to assist with enforcement of TNCs. Typically, these airports indicated that enforcement of TNCs represented an additional responsibility of existing traffic control, police, or airport operations staff and that no new staff had been hired. Only nine airports reported increasing the number of operations staff or enforcement offi- cers or reassigning staff as the result of the presence of TNCs. Other airports had requested additional staff but not yet had the funding approved. 3.6.2 enforcing Airport rules Concerning tnC drivers The challenge most frequently cited by airports with respect to enforcement of TNC operations is ensuring that TNC drivers, especially new drivers, comply with airport rules and regulations. New TNC drivers may be unfamiliar with airport rules and regulations and use of airport roads, possibly because of the high driver turnover rate. This leads to drivers dropping off or picking up passengers at incorrect locations, failing to display the required trade dress, or not using the staging area as required. TABLE 3 ENFORCEMENT RESPONSIBILITIES AND TOOLS Enforcement Procedures Used Large Hubs Medium Hubs Small Hubs Total Responses Percentage Curbside traffic control (nonbadged) 13 11 9 33 34 Licensed enforcement officer/police officers 8 7 7 22 22 Regular audits 9 2 1 12 12 Spot checks 9 8 2 19 19 TNC tracking system/software 4 3 3 10 10 Other 0 2 1 3 3 Total responsesa 43 33 23 99 100 a Total is greater than the number of responding airports because some airports use multiple enforcement procedures. Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016).

26 Drivers found by the airport to be improperly operating (e.g., picking up passengers in an incor- rect location) may be given a warning or cited, and the TNC may be fined. At most airports when one of their drivers is cited, the TNC is notified and required to pay the resulting fine (because the airport does not have a direct connection with any of the TNC drivers at most airports). At the company’s discretion, the driver can be warned, suspended, or kicked off the platform. Several airport operators, particularly those at large airports with a complex roadway network, reported that the major TNCs require that new drivers watch a company-prepared video explain- ing how and where to drop off and pick up passengers on the airport and the required use of the staging area. The staffs of several airports were provided an opportunity to review and critique the training video for their airport. Other airports required that the TNCs prepare such videos and have them reviewed and approved by the airport. Some airport staff have expressed concerns that a few authorized TNC drivers share their smart- phone with nonauthorized individuals and allow those individuals to improperly operate the autho- rized driver’s TNC vehicle at an airport or other location. The concern was that these individuals were not qualified to be TNC drivers because they may not have received training or had their background checked. However, these concerns appear to be unfounded based on surveys conducted by InterVISTAS at Los Angeles International Airport; the surveys indicated that instances of such improper activities are rare (i.e., fewer than two examples in the 1,900 vehicles surveyed) (Inter VISTAS Consulting May 2016). Although some drivers work for more than one TNC at the same time (i.e., log onto and monitor two platforms at once), there is no information suggesting that drivers who do so operate improperly on an airport. 3.6.3 enforcing Airport rules Concerning tnCs The challenge most frequently cited by airports with regard to TNC operations at the company level was preventing a company from operating at the airport when the company does not have an airport permit or agree to comply with airport regulations. The failure to obtain an airport permit was some- times a result of (1) a state or local jurisdiction not yet establishing rules for TNCs, or (2) the TNCs not accepting the rules established by a state or local jurisdiction. Airports cite and fine an individual driver when he or she is found to be picking up or dropping off passengers and the company for which the driver works has not obtained an airport permit. 3.6.4 Confirmation of Correct Payment of required Airport fees An airport TNC permit specifies the type and amounts of fees to be paid, when the fees must be paid (typically on a monthly basis), and the supporting information that must accompany the fee payment. The required supporting information varies by airports—some airports require the TNC to report only the number of total trips made by their affiliated drivers, whereas other airports require the TNC to submit more detailed information including, for each trip, the driver’s ID number, the vehicle ID, the time and location the vehicle entered and exited the airport, and whether the vehicle was transporting a passenger. That is, airports rely on information reported by each TNC (i.e., the self-reported number of total trips) to determine if the TNC has paid the required fees. More than 35 (approximately 80%) of those airports surveyed rely on self-reported trip data to confirm payment of the correct fees. More than 20 airports, including ten of those surveyed, use one of several TNC vehicle-tracking tools to confirm the self-reported trip data and support enforcement of TNC operations. These tracking tools include software packages offered by Gatekeeper Systems and the AAAE, the latter of which was developed by San Francisco International Airport. The staff of Minneapolis–St. Paul, Portland, and Seattle–Tacoma International Airports have or are developing their own, similar tracking systems.

27 Although each tracking system is unique, they operate similarly: each time a TNC vehicle crosses the airport’s geofence to drop off or pick up a passenger, the TNC transmits data about the transac- tion (e.g., vehicle and driver ID and vehicle location) on a real-time basis to the airport’s software provider, who in turn transmits the data to the airport and its enforcement staff. Using these data and a mobile curbside application, airport enforcement staff can confirm that a TNC vehicle and its driver are permitted to operate on the airport, view the volume of hourly trips by company, and verify that the transaction data are later reported to the airport. The resulting transaction data can also help an airport confirm that each TNC is paying the correct monthly amount. 3.6.5 enforcement responsibilities Airports reported conducting regular audits (12% of the participating airports) and spot checks (19% of the responding airports) in addition to using vehicle-tracking systems. In addition to the tools described, two airports reported using unique enforcement procedures: • At McCarran International Airport (Las Vegas), the Clark County Department of Aviation (CCDOA) Audit Team observed and interviewed a sample of approximately 100 TNC drivers to review vehicle license plate numbers, use of trade dresses, and whether passengers were being dropped off or picked up. The CCDOA Audit Team compared these data with the TNC’s monthly reports to determine the accuracy of the reported data. • At Los Angeles International Airport, all TNCs are required to display an airport-issued plac- ard (see Figure 9) in their windshield containing a Quick Response (QR) code. Airport staff developed a smartphone app that searches the vehicle registration database for a match when a QR code is scanned. Using the app, airport staff and police can scan a QR code to identify a TNC vehicle, determine if it is registered to operate at the airport, and document violations. 3.7 reVenues from trAnsPortAtion network ComPAnies The annual revenue an airport receives from TNCs depends on the type and amount of the fees that TNCs are required to pay, the size of the passenger market (i.e., number of originating and terminat- ing passengers using the airport), and maturity of the market (i.e., length of time that TNCs have been serving the airport and the adjacent community). At airports that had permitted TNCs for more than 1 year, airport staff responding to the survey frequently reported that the number of passengers using TNCs and the volume of TNC trips had increased year by year. Since TNCs had been permitted to operate at most of the reporting airports for 18 months or less, it is expected that the volume of TNC trips (and fees paid at those airports charging per-trip fees) will continue to increase from those pre- sented in this report. Figure 10 presents the estimated annual revenues received from TNCs at 31 reporting airports. At 13 of these airports, TNCs have been permitted to operate for less than 1 year or the revenues for FIGURE 9 Sample Los Angeles International Airport–issued placard. Source: Los Angeles International Airport (May 2016).

28 the most recent quarter reported were substantially higher than past quarters (reflecting an increas- ing market share). As a result, the best available data were annualized to represent estimated annual revenues. As shown, of the airports reporting TNC revenues, seven (all small-hub airports) received annual revenues of less than $100,000, ten airports received between $100,000 and $1 million, ten received between $1 million and $5 million, and four (all large-hub airports) received more than $5 million, with two of these receiving more than $20 million. As noted, it is estimated that the annual revenues received from TNCs will increase, reflecting the growing popularity of this transportation service among airline passengers. 3.8 CHAnges in ground trAnsPortAtion ConCession fees Many airports have concession agreements with one or more taxicab or shared-ride van operator that award the ground transportation operator the exclusive or semiexclusive right to serve airport passengers seeking on-demand transportation at the airport. In turn, these agreements require the operator (i.e., the concessionaire) to pay the airport the higher of a MAG amount or an activity-based fee (e.g., fee per outbound trip with a passenger). When TNCs were permitted to operate at these airports, the taxicab and/or shared-ride van concessionaire frequently claimed that they no longer had an exclusive right to serve on-demand airport passengers and therefore should not be required to pay the MAG and/or the activity-based fees called for in their contracts. At 15 of the reporting airports, airport staff stated that they had eliminated the MAG for the taxicab and/or shared-ride con- cessionaire, adjusted the per-trip fees these concessionaires were required to pay, or were evaluating the need to do so. 3.9 trAnsPortAtion network ComPAny terminology And wAyfinding used by AirPorts Many states and local jurisdictions as well as airports have adopted the name first used by the California Public Utilities Commission: “transportation network company” or TNC. However, this terminology is not widely used by or familiar to the traveling public. As a result, there is no single, commonly accepted term that is used to guide airport passengers to TNC pickup areas. Airport staff, particularly those at airports for which TNC passenger pickup occurs in a nearby parking structure or lot, reported that wayfinding was one of the key challenges. Several airports also mentioned the need to budget for new or updated signage when beginning TNC service. FIGURE 10 Estimated annual TNC revenues by airport size. Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016).

29 Airports participating in the survey reported using one or more of the terminologies shown in Table 4 in their wayfinding signs. “Ride share” (“ride sharing”) is the term used most frequently (about 32% of the reporting airports that have permitted TNCs), with “transportation network company” (TNC) ranked second (about 27% of the reported airports). About 20% of the responding airports did not provide passengers or TNC drivers any directional signage. Some airports originally used “Uber” or “Lyft” in their signage but were required to remove these brand names as a result of the opposition from shared-ride van or taxicab companies, who are required to use generic names for their services. Examples of signage at various airports are included in Figure 11. 3.10 imPACts of trAnsPortAtion network ComPAnies on tHe use of otHer AirPort ACCess modes San Francisco and Oakland International Airports are among the few that have conducted surveys to determine the access modes previously used by TNC passengers. The results of these surveys, which were conducted in 2014 and 2015, are summarized in Figure 12. As shown, most (50%) of the TNC passengers reported having previously used taxicabs for their trip to the airport, with 22% having previously used public transit [i.e., Bay Area Rapid Transit (BART) or other public buses], and 18% having previously used private vehicles. The research team estimated that roughly half of the TNC TABLE 4 TNC TERMINOLOGy AT AIRPORTS Terminology Percentage of Responding Airports Ride share, ride sharing 32 Transportation network company/TNC 27 None, no signage provided 20 Uber pickup/Lyft pickup 10 App-based ride share 7 Smartphone app rides 2 Ride service 2 Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016). FIGURE 11 Examples of TNC signage at airports. Source: InterVISTAS Consulting (2016). Los Angeles CharlotteOakland

30 passengers who previously used private vehicles had been dropped off or picked up by friends or rela- tives with the remainder having parked at the airport for the duration of their trip. (The proportion of passengers diverting from parking to TNCs will vary, reflecting the differential between a passenger’s cost of parking at the airport and the cost of travel in a TNC.) Based on the surveys conducted at San Francisco International Airport and data from other airports, it is estimated that as a result of TNCs: • Taxicab trips from airports have decreased by between 5% and 20%—There has been a larger decrease in taxicab trips to the airport than trips from airports. As a result of the decline in taxi- cab customers in many downtown areas, an increasing number of taxicab drivers choose to wait at airports for potential customers, increasing the need for space to stage waiting vehicles and taxicab driver wait times. • Fewer shared-ride van trips—Shared-ride van businesses appear to be operating slightly fewer trips but with fewer customers per vehicle and, at some airports, replacing eight-passenger vans with smaller vehicles. • Little change in prearranged limousine trips—The availability of Lyft and UberX has not affected the number of luxury limousine trips. 3.11 imPACts on otHer ground trAnsPortAtion reVenues As noted, airports receive substantial revenues from TNCs. Some revenue can be classified as new revenue, whereas other revenue may be diverted or foregone revenue. At most airports, private vehi- cles and public transit vehicles dropping off or picking up airport passengers do not pay airport fees, so any fees received from TNCs transporting passengers who previously used these travel modes can be considered new revenue. Conversely, the revenue received from TNCs transporting passengers who previously used taxicabs, shared-ride vans, rental cars, or who parked at the airport may not be entirely new revenue at airports that receive fees from the operators of these transportation services. Anecdotally in the survey responses, the staff at airports where TNCs had been operating for at least 1 year reported: • Less taxicab revenue—The majority of respondents (61%) indicated that taxicab revenue had decreased. Figure 13 depicts the responses by airport size. Half of the small-hub airports reported FIGURE 12 Mode choice before TNCs were permitted at San Francisco International Airport. Source: InterVISTAS Consulting, based on Ground Access Study 2014–2015 San Francisco and Oakland International Airports; data prepared by Corey, Canapary & Galanis Research 2015.

31 that revenue had remained constant, whereas half reported that it had decreased: this is because the airports that reported revenue remained constant charge only a flat permit fee, not a per-trip fee. • Fewer shared-ride van passengers—The availability of nonstop, door-to-door TNC services at fares comparable to or only slightly higher than those charged by shared-ride vans was estimated to have led to a 20% to 25% reduction in the proportion of customers choosing door-to-door van ser- vices during the prior year. In addition, 57% of the respondents indicated that shared-ride van rev- enue had decreased from the prior year. There was insufficient data to determine if the availability of LyftLine or UberPOOL services had affected shared-ride van passenger volumes or revenues. • Little change in prearranged limousines—The majority of respondents (61%) indicated that revenue from prearranged limousines had remained constant. It was reported that customers who use prearranged, luxury limousines are more likely to request UberBlack or similar services (which are also considered prearranged limousines) than a TNC such as UberX or Lyft. • Mixed change in the use of rental cars—The response to changes in rental car usage varied by airport size, with 48% overall stating that rental car revenue had remained constant. Figure 14 FIGURE 13 Reported change in annual taxicab revenue by airport size. Source: InterVISTAS Consulting, based on data reported by individual airports (December 2016). FIGURE 14 Reported change in annual rental car revenue by airport size. Source: InterVISTAS Consulting, based on data received from individual airports (December 2016).

32 shows the breakdown by airport size, with an equal number of large- and small-hub airports reporting that revenue had increased as reporting it remained the same; however, no medium- hub airports reported an increase in rental car revenue, with 45% reporting a decrease from the prior year. At many airports, particularly small hubs, rental car companies are required to report their gross revenues but not the number of customers or rental car transactions. Changes in rental car revenue do not correlate directly with changes in the number of customers because the rev- enues resulting from increases in rental rates or transaction days (i.e., the length of time a car was rented) can mask decreases in the number of customers. At these airports, it is not possible to easily determine if there had been a change in the use of rental cars. • Less use of private vehicles—Approximately 10% to 20% of TNC customers previously trav- eled in private vehicles, some of which required parking. The number of parking transactions— entries and exits—per airline passenger has declined by 5% to 10% at some airports because TNCs were permitted to serve the airport. The operators of off-airport parking businesses also reported a 5% to 10% reduction in business, which they attribute to the popularity of TNCs. As part of this synthesis project, InterVISTAS attempted to confirm the anecdotal observations by quantifying if TNCs are affecting airport passenger use of taxicabs, shared-ride vans, limousines, rental cars, or airport parking. Unfortunately, it is difficult to do so at this time because: • There is a lack of before and after data because, as stated previously, TNCs have been permitted to operate at most airports for less than 18 months. Further, some airports, particularly those where only a single TNC is permitted to operate, are precluded from reporting TNC revenues. • Increases (or decreases) in the number of airline passengers directly affects the use of and revenues received from all transportation services. • Changes in public parking fees, rental car rates, or fees received from taxicab or shared-ride concessionaires directly affect reported revenues. • There is limited available data because some airports, particularly medium and small hubs, do not track or report the revenues or trips from individual transportation services. To compensate for these challenges, InterVISTAS requested that airports share monthly parking and rental transactions (the number of parking or rental car exits) rather than revenues, taxicab trips (rather than revenues), and shared-ride trips (recognizing that shared-ride van vehicle occupancy may have changed at a faster rate). Data were received from six airports for one or more of these transportation modes. The reported transaction data received from these airports were correlated to monthly terminating airline passengers to develop a ratio of monthly transactions per passenger. This metric compensates for possible changes in passenger activity. Terminating airline passengers were used as the basis for this analysis rather than deplaning passengers because deplaning passenger volumes include connecting passengers who are transferring between aircraft and do not use ground transportation services. As a result of this analysis of trips per passenger (or customers), it is estimated that as a result of TNCs there was (compared with the prior year): • A 10% to 30% decline in the use of taxicabs, with the decline increasing over time; • An 18% to 30% decline in the use of shared-ride vans. The shared-ride van industry is particu- larly affected by TNCs because the business model of most shared-ride van operators primarily depends on transporting passengers to and from an airport; • A 4% to 13% decline in rental car transactions, with lower declines in the months with greater nonbusiness activity (e.g., spring break and summer vacations); and • A 0% to 13% decline in public parking transactions. It is not known what proportion of these parking transaction are short-term durations (e.g., stays of 4 hours or less) compared with long- term durations (e.g., stays of 24 hours or more), which typically generate more than 80% of an airport’s public parking revenues.

33 As noted, these changes are based on a limited data sample, but they do appear to support the anecdotal experience of some airport staff interviewed. However, other staff reported experiencing little to no change in parking revenues or the use of other access modes. It is suggested that at the air- ports reporting little or no change, the actual changes were masked by increases in airline passenger volumes, parking rates, or other factors. Analyses prepared as part of this report indicate that, where data were available, there was a significant decline in parking transactions or trips by other modes on a per-passenger basis because TNCs were permitted to operate on the airport. A larger question, not addressed by this synthesis, is whether the “new” revenues received from TNCs exceeds the foregone revenues an airport would have received if TNCs were not permitted to operate. In particular, any decline in public parking or rental car revenues could adversely affect an airport’s finances because these revenues are the largest sources of nonairline revenues. A 2016 survey conducted by InterVISTAS in cooperation with the Airports Council International–North America and International Parking Institute indicated the median gross parking revenues were $63 million for large-hub airports, $23 million for medium-hub airports, and about $9 million for small-hub airports. Thus a 10% reduction in these parking revenues would equal or exceed the TNC revenues reported by all but two of the 31 airports shown in Figure 10. These foregone revenues do not include any fore- gone revenues that may result from a change in the use of rental cars, taxicabs, or other transportation services.