John Wayne Airport Considers Software to Track Fee Payment from Ride-Sharing Vehicles

Kristin Vanderhey Shaw
Published in: 

When Uber burst onto the scene several years ago, using a smartphone app to arrange rides from privately owned vehicles struck a chord with select customers. Early adopters bragged enthusiastically about the money they were saving, other companies launched similar services and a new business model was born: transportation network companies (TNCs). 

It wasn't long before travelers began using TNCs for rides to and from airports - promptly triggering pushback from taxicab operators and shuttle services with established relationships and associated fee agreements to operate there. In certain markets, TNC drivers were ticketed, fined and/or summarily banned from airport property. But a portion of those airports are now adjusting their posture toward TNCs - some begrudgingly (driven by customer requests) and others more willingly (after finding potential financial upside).  

Project: Managing Transportation Network Companies 
Location: John Wayne Airport (Orange County, CA) 
Strategy Under Review: Software that tracks TNC vehicles & manages cost recovery of related fees
Software: TNC-Ops,TM  by GateKeeper Systems
GateKeeper's Aviation Partner: TransCore
Trans. Network Participants: Lyft; Uber; Wingz

Lyft and the city of Austin Aviation Department reached a one-year pilot program agreement in March of 2015. Just before Thanksgiving, Midway and O'Hare International airports began allowing Lyft and Uber drivers to pick up passengers at the terminals, joining other large metropolitan airports like Reagan National near Washington, D.C., to create working structures for TNCs. One of the country's busiest airfields, Hartsfield-Jackson International Airport in Atlanta, and others still do not allow TNCs on their property. 

In New York, the airports have established dedicated lots for Uber near John F. Kennedy International, LaGuardia and Newark International airports, where drivers wait for a ping indicting a rider is waiting. 

Is Software the Solution?

An increasing number of airports seem to be striving to find a way to work with TNCs that serve their local market. John Wayne Airport (SNA) in Orange County, CA, is turning to technology as a possible solution. Currently, it is testing software designed to track TNC traffic in specified areas on airport property and collect data about their operations. 

"Airports don't know how to appease all parties yet, but this is a service our passengers wanted," says SNA Deputy Airport Director of Operations Scott Hagen. "Frankly, the TNC model can be cheaper, and some corporations are even encouraging their traveling staff to use TNCs vs. taxis when they're on the road." 

Orange County, which owns and operates SNA, allows Lyft, Uber and Wingz to pick up passengers curbside. The airport's numbered column system makes it especially easy for passengers and drivers to find each other. The airport charges TNCs the same fee - a flat rate per pickup - it charges SuperShuttle vehicles and limousines. 

Taxicab operators pay either $.18 per deplaned passenger or a minimum annual guarantee of $883,000, whichever is greater. Taxicabs are not charged fees via SNA's automated vehicle system - a policy that might change under a new contract that will be put out for bids early this year, notes Hagen.   

TNCs provide the airport with data about their trip volume, and SNA is reviewing software programs to manage cost recovery. One of the options it is testing is TNC-Ops, a product from GateKeeper Systems that uses radio-frequency identification (RFID), license plate recognition, and/or GPS to track TNC vehicles on airport property. 

"GateKeeper software receives data from the TNCs' systems when TNC vehicles are reported on the airport roadways through the deployment of geofence technology," explains Lynn Richardson, the company's chief executive officer. "A geofence is an electronic line made up of latitudinal and longitudinal points; GPS coordinates are connected to see when a vehicle enters the circle. When it crosses that line, the device sends a message to the TNC server that says 'here I am.'" 

Airport personnel can log onto a website that lists TNC vehicles coming onto and leaving the property in near-real time (GateKeeper estimates a 5-second lag). This allows airports to charge for pickups, drop-offs or both. Either way, an agreement with TNCs to provide data is required.   

The software helps airports meet their oversight responsibilities and enhances enforcement efforts, explains Richardson. From an accounting/financial standpoint, it allows airports to audit TNC vehicle trip data and provides an opportunity to create support data for their internal invoice systems, he adds.  

One feature that appeals to Hagen is the ability to pay for a one-time automated vehicle identification (AVI) system upgrade instead of being charged per transaction for the service. "They (GateKeeper) would provide a direct data feed from TNCs into our existing AVI system, and it would show up as another account," explains Hagen.  

SNA doesn't consider software a magic bullet. "Whatever system you use, the data is still the TNCs' data," says Hagen. "Either way, we'll still do random checks and confirm against data streaming in. We get monthly reports from the company, and the data should be the same as what is in our AVI system. The manual checks can't really go away, because we don't necessarily want to be reliant on one source of data."

McCarran International (LAS) in Las Vegas is also testing software to monitor TNC traffic. GateKeeper reports that Lyft and Uber recently began offering service at LAS using its software, and other TNCs are actively working with the company as part of their preparations to offer service at the airport. 

Airports across the globe are struggling to understand and quantify how TNCs will impact operations and profitability. Hagen says that it's too early to assess whether lost parking revenue is a factor at SNA, but one thing is obvious: "In the seven months we have been allowing TNCs at the airport, we are seeing double-digit monthly increases in TNC pickups." 

Taxi companies operating at the airport estimate they will see a 10% drop in business, he adds. 

On the potential upside, Hagen believes TNCs might bring a new revenue source to the airport: fees collected from TNC drivers who replace friends, family and co-workers who drop off/pick up passengers without parking. 

Why the Fuss?

As the first company to broadly launch a product for managing on-airport TNC activity, GateKeeper partnered with aviation ground transportation hardware specialist TransCore. 

"The TNC uptick happened very quickly and was surprising to everyone," explains Forrest Swonsen, TransCore's associate vice president of Airport Systems and Services. "They enter a city as a competitor to the cab companies and immediately start taking fares to the airport. However, the TNCs found that there is a very different set of business rules for working at an airport, which is a heavily regulated environment. In some instances, they were running into airports that had a closed taxi system [which limits operations to a finite number of companies] and the business models collided. The airports didn't permit the private cars in this capacity, and fines were levied and cars towed. But the thing was, customers wanted the service and the demand determined the offering."

Restricting TNC drivers from dropping passengers off at airports can prove difficult, because customers contact them from outside the airport, and it is hard to distinguish between TNC drivers and unpaid friends or family members providing the same service. Airports can more readily detect and manage TNCs picking up at the airport, because travelers are on airport property when they use an app to arrange a ride - sometimes by using the airport's free Wi-Fi network. 

"The TNC model is a disruptive technology," asserts GateKeeper's Richardson. "Customers like that they are able to use their tablet or phone to request a vehicle and have everything automated for them. However, this crosses the paths of all of the typical rules and regulations airports have. At this point, we are way beyond the feeling that this is temporary or that it will go away. Now airports have to figure out ways to make it work for them." 

With many airports expressing concern about how TNCs will impact their business, the American Association of Airport Executives and Airports Council International both began addressing the topic at their annual meetings a few years ago. As airports began sharing their positive and negative experiences with TNCs, more operators are shifting focus to finding ways to work with ride-sharing companies operating in their markets.
Ensuring that TNCs don't enjoy unfair advantages compared to taxis and other more traditional ground transportation options is a primary concern. Bakari Brock, senior director of Business Operations at Lyft, contends that TNCs often pay higher fees than other services to operate at airports. Insurance coverage for TNC drivers is another primary concern. Many airports believe that the personal insurance TNC drivers carry is not adequate, because most personal policies exclude car-for-hire usage, notes Richardson.  

As airports navigate the various challenges TNCs bring to their curbs, there's no denying that the TNC model is growing in popularity. "We'll continue to see consumer demand increase," Brock predicts. "I also think as we continue to partner with airports and information tech teams, we will continue to provide more operational data. Going forward, this data can be deployed to manage curbside congestion patterns and (be used) to provide better service to passengers."

After working with several U.S. airports, Brock believes the road ahead can be smooth. "We want other airports to know that we want to be the best possible partner," he says. "We are the only TNC that has an airport team, and we want to continue to build our list of partners. There is a misconception that TNCs don't want to follow the rules, and that's not true. We're here to offer alternate transportation modes. And if you talk to some of our customers, they will tell you that our business is all about welcoming, affordable rides."

Richardson considers information the most effective tool for understanding the impact of TNCs at airports. He advises collecting trip data on all modes of ground transportation and merging it into a single system that allows manual and automated analysis of the information. 

Swonsen counsels airport operators to look at how their ground transportation mix is going to change with the advent of TNCs. "The smart airports are planning ahead," he observes. "For instance, are we building too many parking decks? Millennials are using more Zipcar and Uber; maybe 20 years in the future we won't need as many spaces. What will revenues look like? The airports will have to take a good look at the cost recovery to ensure they are compensating for any loss of revenue."

Swonsen also advises operators not to get caught up in the details of particular TNC operations, but to think more broadly: "Airports need to reassess their total business mix and as soon as they can try to figure out the impact of TNCs, fractional rental cars, FlightCar [which helps customers parking at the airport rent their vehicles to other approved traveling members] and rental cars. How does this affect consolidated rental car facilities? They have to stop thinking about how to manage TNCs on a day-to-day basis and try to understand that this is causing a sea-level change for non-aeronautical revenue."  

(For more information about TNCs at airports, visit Our September 2014 edition discussed how Denver International and San Francisco International were addressing the issue.)


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