Government tranportation organizations have a hard time working with for profit competitors. In my writings on creating integrated transportation associations at the metropolitan and regional scale ("The answer is: Create a single multi-state/regional multi-modal transit planning, management, and operations authority association," 2017), linking the providers in an area in terms of planning, fares, schedules, and operations, like the German (or London and Paris) model, I have mentioned that most areas have problems integrating for profit providers, because they may compete with some of the government providers, such as with bike share ("Another example of the need to reconfigure transpo planning and operations at the metropolitan scale: Boston is seizing dockless bike share bikes, which compete with their dock-based system," 2018).
Regulation may be an additional barrier, focused on revenue or applying inappropriate business models, rather than providing the best service possible to citizen-customers. The problem extends to regulation, such as treating car sharing more like traditional car rental ("Calif. Superior Court: Turo Is a Car Rental Company," Auto Rental News), or looking at it as a revenue source rather than as a fulcrum for transportation demand management ("Another example of DC's failures in transportation planning: carsharing," 2011).
Of course, there is also the lobbying by special interests ought to protect their businesses from the threat of change.
Airports are losing revenues because of ride hailing. With airports, because revenues from concession fees from rental car companies, access fees from taxis, and parking are so high, they see ride hailing and car sharing services not as services that the customers of the airlines use, or that the flyers are the airport's customers, and should be accommodated, but as competitors for revenue ("Airport transportation demand management in flux," 2019, "Revisiting stories: ground transportation at airports (DCA/Logan)," 2017).
Ride hailing also put national airport shuttle transportation firms out of business ("Say goodbye to those blue-and-yellow airport vans: SuperShuttle is going out of business," USA Today). So now airports have one less source of concession revenue. And a warning about the impacts of change and innovation on legacy businesses.
Airports are accommodating ride hailing, even though they're losing revenue. For the most part, airports have figured out how to accommodate ride hailing although it comes at a revenue cost. Usually there is a per ride cost, but some rides may evade a per trip fee.
Airports and car rental firms don't like car sharing either. Car rental firms, which pay a lot of money to airports for access, and airports, aren't pleased about the potential loss of revenue from cheaper car sharing options ("Airbnb for cars is here. And the rental car giants are not happy," Washington Post).
There are a number of lawsuits between airports and Turo, another company operating in this space ("Hillsborough aviation authority sues rental car company Turo over nauthorized use of Tampa International Airport," Tampa Bay Times).
A counter example is how the Montreal airport is a leader in this area, having provided space to the now shuttered Car2Go service ("Car2Go agreement with Montreal's Trudeau Airport could be a model for other jurisdictions").
Salt Lake International Airport and Avail. The Salt Lake airport dropped the Avail "car sharing" service a few days ago ("City airport slams the brakes on car-sharing business," Salt Lake Tribune). From the article:
Launched in Utah in 2019, the company quickly became a disruptor of the car rental industry nationwide. Travelers flying out of the airport can park their car with Avail for free while they’re gone, and passengers flying into Utah can borrow the car for less than a traditional rental. The person loaning out the car either makes a few bucks on the side, or at least comes home to a sparkling clean vehicle and no parking fee.
Avail partners with a commercial airport parking and shuttle company to make everything work. But the Salt Lake City airport put an end to Avail’s business May 23, when it required that partner to stop working with third parties, including peer-to-peer services.
By taking the car out of the parking structure, the airport makes less money, especially as one car can support multiple trips.
Like how New Jersey regulates car sharing firms as more traditional car rental outfits ("Car sharing as a method for managing the demand for on-street parking: Hoboken, New Jersey," 2013), making the cost much greater, which defeats the purpose of car sharing as simple to do, the Airport wants to treat the car sharing program as a car rental firm, significantly increasing the cost to users.
Car sharing accommodation at other airports. What Car2Go did in Montreal was to have a $7.50 trip upcharge (not unlike how BART assesses an upcharge for trips to the SFO Airport). They also had airport access in Seattle, with a $5 upcharge ("Car2Go arrives at Sea-Tac airport," Seattle Times).
The "new" Gig one way car sharing program in Seattle has an agreement with a parking lot provider adjacent to Sea-Tac Airport to provide trip access from the Home Zone in Seattle to the airport, with a $10 upcharge. Gig has an arrangement with the Oakland California airport too, with a $5 upcharge.
In Denver, Turo and presumably Avail, are paying $36,500 for one year access to 10 parking spaces, and have an agreement to share revenue. In Wilmington, North Carolina, Turo agreed to pay $3 per trip, with a $5,000 minimum ("San Francisco unicorn Turo lands first U.S. commercial airport permit," San Francisco Business Times).
What about the airport passenger as a customer and customer service? This is an example of legacy providers aiming to use regulations and inappropriate business models to fight off innovation and loss of revenue.
But ultimately it comes at the expense of the airport's customers, who lose out on a greater range of methods to serve their needs going to and from the airport. The airport should be thinking of its customers as not just airlines or car rental firms, but airport passengers.
-- "From Passengers To Airport Customers – How Should Airports Relate To Their Target Groups?," Romanian Economic Business Review, 2016
-- "Defining customer experience: How airports can own the passenger journey," ACI Insights, 2020
-- "Attracting and Retaining Airport and Airline Customers Through Stakeholder Collaboration, Aviation Pros, 2018
-- "Why should airports care about the passenger experience?," DKMA
Having car share services charge an upcharge and sharing it with an airport could be an inducement for the Salt Lake Airport. More revenue than strict car share, albeit less than if the car just sat there totting up daily parking charges.
There are some car sharing programs in Salt Lake and bike sharing in Salt Lake and Park City, but they aren't integrated into an overarching German style VV.
-- "Verkehrsverbund: The evolution and spread of fully integrated regional public transport in Germany, Austria, and Switzerland," Ralph Buehler, John Pucher & Oliver Dümmler, International Journal of Sustainable Transportation (2018)
I do think that it would be relatively easy for UTA to integrate the local GREEN Bike program into a linked transit program, like the Comet bus system in Columbia, SC ("Transit as a mobility integrator," Mass Transit).
Airports should be part of regional transport associations too. I hadn't thought of it til now, but airports should be participating members of regional transport associations too.
In many metropolitan areas, airports are inadequately integrated into the transportation planning system. This piece, "DC area airport planning" (2021) has links to past entries on that topic.
Comparable to most other metropolitan areas, as a planning entity, the Salt Lake International Airport is somewhat separate from the transportation planning side, included on some things like it being a hub in the regional transit network ("Manhattan Institute misses the point about the value of light rail transit connections to airports | Utility and the network effect: the transit network as a platform," 2020), but independent in other ways.
Their failure to be "fairer" when it comes to car sharing access or serving as a bike mobility hub ("Why not a bicycle hub at National Airport?, focused on capturing worker trips but open to all") are illustrations of why airports need to be part of the "transport association" mix, along the lines of an integrated sustainable mobility platform ("Further updates to the Sustainable Mobility Platform Framework") and transportation demand management planning.
=========================
From "Why should airports care about the passenger experience?,"
The secret benefits of focusing on the passenger
For some time I’ve wondered why some airports go to extreme lengths to provide a spectacular ambience and a unique experience. A couple of years ago, I started asking airports at the top of the ASQ rankings why they continued to focus on the passenger when some might say they are wasting money.
The responses I’ve received have shown very deep thought about the nature of how an airport works and how to create efficiency and pride in its culture.
1. Passengers who have a great airport experience are more relaxed, spend more and want to come back
2. Airports increasingly compete with each other and also with alternative transport modes for passengers, therefore developing customer loyalty is important right now – at the very least having a good reputation is vital before the competition arrives.
3. A great passenger experience makes a good impression / enhances the reputation of your city/state/country. (The airport is the first and last thing a visitor sees). Therefore from a tourism, business and economic point of view it makes sense to invest in the airport.
4. A great passenger experience makes it very difficult for governments/regulators to argue that the airport is doing a bad job – the airport is clearly serving the community.
5. Focusing on the customer binds the organisation together. It gives all staff a clear goal and a clear understanding of the aims of the airport – what types of behaviour are acceptable and to be encouraged.
6. Staff who are committed to providing a great passenger experience tend to help their colleagues more making the airport more efficient and effective.
7. Staff, passengers and the local community who are proud of their airport look after it better, want to be associated with it and are less likely to litter or accept a shabby ambience.
8. A great passenger experience keeps media onside and helps marketing/publicity for the airport. Passengers often prejudge an airport based on its media profile. Given that media tend to publish negative issues more than positive ones, this can be a problem.
I think you're really short-changing how much airports in the US already do think about passenger experience.
ReplyDeleteLikewise, I don't think the introduction of new services is solely about revenue. Painting airports as solely focused on their fee revenue is misleading, IMO.
With ride-hail, the issue at airports isn't that these services are taking away revenue either from parking or from taxis (though that's true) but also that the model of using an app to match a specific rider to a specific car (rather than the more efficient taxi stand, first come, first serve model) imposed huge congestion costs on airports.
The biggest airports have needed to adopt new ride-hail infrastructure (staging and matching areas, etc) and that costs money, hence the fees. Plus, airports have the legal standing to impose such fees on commercial operators.
It's also important to know that the various car companies aren't just imposing these fees unilaterally, they are negotiating with the airports. Car2go didn't just charge a fee in Montreal, they negotiated an arrangement with the airport in exchange for access.
It's true that airports aren't exactly embracing innovation, but that's not what we want of them in general. Airports also have to manage existing relationships (including contracts) and recognize that the vast majority of passengers will still arrive via 'normal' means (usually via car - shared or not - , parking, or transit).
Airports don't have an obligation to engage with every single start-up, for example. Those services want to lease space, and that space costs money. It's absurd to think that a retail startup could go to an airport and demand they be allowed retail space in an airport rent-free.
I didn't specify in detail ride hailing. I've written pieces in the past about LAX and Logan and necessary TDM measures with ride hailing. At LAX myself, the congestion was so bad the Hertz bus was using the arrivals section to drop off departing passengers because the departures section was so congested.
ReplyDeletehttp://urbanplacesandspaces.blogspot.com/2019/03/transportation-demand-management.html?m=1
Wrt car share, the unwillingness to treat it differently from car rental indicates to me an unwillingness to consider its business model as significantly different from traditional car rental. The revenue and operation is much different. That to me seems intransigent and more concerned about protecting and prioritizing more profitable revenue streams than it is responding to customer preferences.
The car sharing firms are asking for access, not free access. And reasonable fees. Like how LA MTA's innovation unit is willing to work with new entrants, airports need to be more flexible wrt sustainable mobility options.
I think you're ascribing a motive (unwillingness to embrace innovation) without much evidence. The assertion that airports don't care about the customer experience is particularly baseless, I think. In my experience, airports are far more interested in the customer experience than lots of other transit players.
ReplyDeleteAt the same time, the failure to come to terms with a new car-share service like Avail or Turo can happen for a lot of reasons. I wouldn't assume there's not an openness to new ideas when those ideas had already started operation! At the same time, airports also have a mandate to fund their operations with revenue, and they have contracts with traditional car rental companies that often include a percentage of gross revenues.
There's nothing in the articles that indicate airports aren't responding to customer preferences at all. What kind of volume is Avail doing? If an option is so niche and small (and the business is demanding unreasonable terms), I don't see what the issue is.
In SLC, it appears Avail has a legal reason to not want to agree to be a 'rental car' company. And I can understand that. And the airport similarly probably has a legal reason why they must be called a 'rental car' company - and I can understand that, too. Contracts can be hard.
Anyway, the assumption in your piece seemed to be that the airports were being unreasonable by default, and I'm not sure that's actually true.
The airport seems to have not thought too much about intra-terminals transit either. The distances from some areas are about 2/3 of a mile, but they won't focus on a tram until the airport is built out, which they don't expect for 10-20 years. That's a long wait.
ReplyDeleteIn the old days, it was common to build a temporary railroad or streetcar route to support new construction projects.
I think that Salt Lake Airport could have figured something out.
Salt Lake Tribune: Accept it: SLC is a big-city airport now..
https://sltrib.com/news/2021/06/07/why-long-walk-salt-lake/
Although a tunnel will be added within a couple years, which will make a difference.
They could have just built an underground tunnel for electric bus service...
Avail capitulated.
ReplyDeleteSalt Lake Tribune: Car-sharing startup resumes operations at Salt Lake City airport.
https://www.sltrib.com/news/2021/08/07/car-sharing-startup/
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