Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide (2020)

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3 1.1 Problem Statement The objective of this research was to develop a Reference Guide for airport operators that identifies strategies for adapting airport landside access programs to reflect the evolution of ground transportation modes (e.g., transportation network companies [TNCs] and auto- nomous vehicles) and their impacts on other airport revenues and operations (e.g., parking and rental cars) for both a current time frame and a projected 5-year outlook.3 The Reference Guide addresses the following topics: • Strategies for creating long-term sustainable revenue models, supported by a comprehensive analysis of landside revenue changes (e.g., trip fees, parking, rental car, roadway access fees). • Responses to curbside and roadway vehicle congestion. • Customer service impacts (i.e., location of drop-off/pick-up areas, wayfinding terminology, and displays). • Strategies to forecast shifts of customer preferences and demand, including the impact of technology and socioeconomic factors on mode choice. • Use of technology and access to data (i.e., tracking vehicle location; compiling transaction data; collecting vehicle dwell time, volume, and speed data). • Shifts in ground transportation business models, started by TNCs, being reflected in long- range facility design and capital planning. • Operational considerations and common business terms to include in sample documents for adopting new ground transportation agreements. • Ground transportation policy enforcement and staffing. • Achievement of airport sustainability initiatives in the use of fuel-efficient vehicles or alternative-fuel vehicles. • Achievement of community or accessibility standards or initiatives, particularly compliance with ADA regulations. The research conducted under this project was coordinated with the research performed for ACRP Project 03-47, “Rethinking Airport Parking Facilities to Protect and Enhance Non-Aeronautical Revenue.” To avoid duplication of work, principal investigators for both projects conferred regularly to discuss preliminary findings and the direction of their research. This TNC effort focuses on policy planning, landside operations, and financial impacts. ACRP 03-47 focuses on the design elements of the adaptive reuse or repurposing of on-airport parking structures. S E C T I O N 1 Introduction 3 ACRP Project 01-35: Amplified Work Plan, April 2018.

4 Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide 1.2 Purpose of the Reference Guide TNCs provide on-demand transportation services in most U.S. metropolitan areas. As of June 2019, TNCs also operate in the ground transportation markets at all major domestic commercial airports. The rapid emergence of TNCs has presented multiple challenges to air- port operators, states, regional transit authorities, and city governments. The regional and metropolitan context is important to acknowledge, because TNCs are one example of a service provided in a shared economy—a service that has been broadly embraced by customers but has proven resistant to control, regulation, analysis, and integration into transportation policies, plans, and operations. Airport operators have traditionally had a high level of control over commercial transporta- tion providers that enter their properties, and also over how these services operate on airport roadways and terminal curbs. This is partly because, unlike cities, airports are treated as private property with controlled access. In addition, airports are highly lucrative sources of business for ground transportation operators, and thus commercial operators are generally responsive to airport requirements. Ground transportation managers can usually rely on this relatively high level of control over services and facilities. At the same time, managers have always had limited resources available to address customer service issues and adherence to rules and regulations. With the entry of TNCs into the commercial ground transportation landscape, airport opera- tors may find themselves struggling to maintain efficient, cost-effective, and safe operations in a dynamic environment. Now that TNCs have evolved to reach critical mass in airport com- mercial ground transportation operations, their continued use presents airport operators with multiple challenges. The purpose of this Reference Guide is to provide airport operators with information, best practices, and tools that will assist with managing TNCs within the airport ground access system. Specifically, this Reference Guide is intended to • Provide the basis for integrating TNCs into commercial ground transportation operations. • Compile effective approaches to managing TNC operations. • Present tools for estimating the impacts of changes in fee structure and mode share. • Present empirical data on the impact of TNCs on ground access revenue and capital programs. • Outline a strategic approach to managing change and new technologies in airport ground access services. 1.3 Approach to Developing the Reference Guide Five principles informed the development of the Reference Guide: • Be broad enough to encompass a variety of topics and themes of importance to airport operators. • Recognize that airports are at different levels of policy development and analysis. • Offer practical and proven practices that have been used with success. • Support strategic planning, as well as tactical actions. • Recognize the rapid change in commercial ground transportation. The research comprised nine tasks, as shown in Exhibit 1-1. The work was conducted to document how airport operators • Develop permitting procedures and enforce regulations. • Locate passenger drop-off and pick-up areas within the overall context of ground access operations. • Manage vehicle staging and holding areas.

Introduction 5 • Establish trip fees charged to TNCs and collect and confirm payment of such fees. • Monitor and respond to revenue impacts and their effects on airport finances. • Update capital plans to support evolving ground transportation operations. The first phase, “Investigation,” included the research panel’s approval of the amplified work plan, a literature review, interviews with airport landside managers, an online survey of the top 100 U.S. airports, and the initial development of ground access mode-choice models to analyze TNC impacts on mode share and revenue. The second phase, “Insights and Analysis,” included two tasks: (1) summarize the data and the impacts to revenue, and (2) write the interim report, which included an outline for the Reference Guide. The interim report compiled the results of the research conducted for Tasks 1 through 5, and it serves as the principal source for this Guide. Extensive supporting documentation (available on the TRB website by searching on “ACRP Research Report 215”) includes a searchable statistical database of the airport survey and the Airport Mode Choice and Ground Transportation Revenue Simulator Template, devel- oped using the R programming language, that shows how the mode-choice model is applied to estimate revenue impact. NOTE: TNC—transportation network company SOURCE: ACRP Project 01-35: Amplified Work Plan, April 2018. Exhibit 1-1. Research work plan.

6 Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide 1.4 Audience In general, the primary audience for this Guide encompasses operating, administrative, finance, and information technology professionals within an airport. Senior airport executives and their governing boards, who make decisions regarding fees, regulations, capital spending, and commercial ground transportation policy, are also part of the audience for this Guide. More specifically, the audiences are • Executive-level managers, chief financial officers, senior planners, and legal staff charged with developing ground access policy and managing their airport’s regulatory framework and finances. These managers review revenue trends and evaluate trade-offs as they develop recommendations for their policy boards. • Landside supervisors and law enforcement officers with day-to-day responsibility for ensur- ing the safe and efficient operation of ground transportation operations and facilities, and transportation engineers and planners responsible for analyzing curb operations and develop- ing capital improvements. This group of airport operators provides active curb management, enforcement, and security. The operators also collect data and perform traffic engineering analysis of terminal curbs, drives, and access roads. • Finance and business development analysts who track the relative contributions and trends of commercial ground transportation revenue and their impacts on airport finances and capital programs. This includes the management and administration of concessions. • Information technology staff responsible for implementing programs that track commercial ground transportation activities. These staff support financial and operating audits, as well as help landside supervisors track TNC activities for compliance with rules and regulations. 1.5 How to Use the Reference Guide: Overview and Organization Section 1 presents an outline of the research tasks and the intended audience. Section 2 serves as a concise narrative describing the development and evolution of the TNC business model; this discussion is followed by Sections 3 and 4, which describe TNC impacts on airport operations and revenue, respectively. Section 5 presents 24 practices, as well as tools and policies, which airport operators can reference to address challenges or issues in four broad areas: • Policy development, regulations, and permits. • TNC and ground access management, operations, and analysis. • Business and revenue analysis and capital programming. • Technology. Section 5 begins by defining “best practice,” then presents summary tables listing all 24 practices, with each practice accompanied by a brief description. This is followed by four sections corresponding to the four categories. For airport operators who need additional information, references to source material are also provided. The Airport Mode Choice and Ground Transportation Revenue Simulator Template, which shows how the mode-choice model is applied to estimate revenue impact (based on hypothetical policy changes at San Francisco International Airport [SFO]), is available on the TRB website by searching on “ACRP Research Report 215”.