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

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18 The process for a TNC to begin operations is similar across most airports. First, if required by enabling legislation, the company obtains the necessary state or municipal permit. Then, the company completes an application for an airport ground transportation permit. On approval by airport managers, the TNC may legally pick up and drop off in accordance with that airport’s rules and regulations. This may include paying a one-time fee (e.g., an activation fee); requiring drivers to have adequate insurance coverage; conducting driver background checks; reporting and remitting trip fees; and adhering to roadway, curb, and hold lot pro- cedures. Drivers may need to satisfy additional conditions; for example, when a regulatory “overlap” exists, a TNC driver may need to obtain additional permits from the county or city in which the airport is located. Table 3-1 presents the trip fees and permit conditions of the airports that informed the best practices presented in Section 5 of this Reference Guide. An updated list with fees as of August 12, 2019, is included in Appendix B. Table 3-2 summarizes the principal methods airport operators employ to establish commer- cial ground access fees. • Cost recovery allows the airport operator to charge commercial vehicle operators a fee suf- ficient for the airport owner to recover the costs of providing, operating, and maintaining the roadways, curbsides, hold areas, and other facilities commercial ground transportation operators use directly. • By contrast, a market-based fee reflects the overall business benefits the commercial ground transportation operators receive, and the privileges they enjoy, as a result of the presence of the entire airport and from the operators’ access to the traveling public. Typi- cally, market-based fees are calculated based on the volume of airport-related business ground transportation operators conduct, and the fees may involve a public bidding process. • And in some cases, fee schedules must be developed as specified in state or local enabling legislation. As shown in Table 3-2, cost recovery is the prevailing TNC fee approach at large-hub air- ports, while market-based is the approach used by one-third to one-half of large-, medium-, and small-hub airports. A small percentage of airports earmark TNC revenue for specific purposes. Commercial ground transportation fees are a critical source of operating revenue for air- ports, and managers carefully monitor trends, transaction activity, and fee collection. In theory, cost recovery should result in a mode-neutral fee schedule. But in practice, airport governing boards may differentiate commercial ground access fees in pursuit of policy objectives (e.g., S E C T I O N 3 Impact on Airport Operations

Impact on Airport Operations 19 AIRPORT TNC TAX/FEE NOTES BEST PRACTICE BOS $3.25 (drop-off) increases to $6.00 total as of 10/1/19 ($3.00 pick-up and drop-off) as of 10/1/19) Trip fees increase to $4.00/$4.00 July 1, 2020. State law allows airport operator to require Criminal Offender Record Information (CORI) and sex offender checks. High-occupancy vehicle policy can be used to influence mode share. Rematch to be permitted as of Oct. 1, 2019. 50% fee discount for shared-ride trips. Conduct robust background checks. Pick-up/drop-off to be shifted from curbs to garage as of Oct. 1, 2019. DCA and IAD (MWAA) $8.00 total ($4.00 pick-up and drop-off) $5,000.00 activation fee Applies to DCA and IAD. Permits were issued to TNCs (Uber and Lyft), not to individual TNC drivers. Failure to follow MWAA regulations can result in Notices of Violation, with fines up to $250 per occurrence, applied against the permit holders. Collect both a drop-off and a pick-up fee. DEN $5.20 total ($2.60 pick-up and drop-off) Rematch is allowed—it reduces roadway traffic, reduces demand for space in hold lot, and improves customer service (shorter wait times). Pick-up and drop-off shifted in June 2019 from Level 6 to Level 5 due to curb congestion. Collect both a drop-off and pick-up fee. Allow rematch. DFW $10.00 total ($5.00 pick-up and drop-off) $600.00 annual permit fee Major recent adjustment in curb management: only active loading/unloading allowed. $3.00 of trip fee paid by company; $2.00 by driver. Collect both a drop-off and a pick-up fee. LAX $8.00 total ($4.00 pick-up and drop-off) $1,000.00 activation fee Rematch permitted. $200.00 per violation of rules and regulations. Collect both a drop-off and a pick-up fee. Allow rematch. RNO $1.00 (pick-up only) Rematch allowed only if hold lot is empty. Use rematch to manage TNC supply. SEA $6.00 (pick-up only) Tiered activation fee: $50,000.00 to $100,000.00 Trip fee is set in an attempt to “level the playing field” with taxis. Environmental fuel-efficiency goal (E-KPI) of 10.82 lbs. of CO2 per passenger trip is based on the equivalent for taxis, which have a 45 mpg requirement. TNCs can accomplish the CO2 goal using high mpg vehicles, deadhead reduction and/or pooling of unrelated passenger and any combination of these three items. Rematch permitted. TNCs have the option of paying a pick-up or drop-off fee (i.e., split the $6.00 into two $3.00 charges). All chose to pay the $6.00 fee. Set trip fee in context with other commercial ground access services. Allow rematch. Establish environmental/fuel- efficiency policy. SFO $4.50 at nearby terminal area garage Activation fee based on pre-permit trips. Transit First policy. Continuing to develop, refine, and implement interim measures. Effective June 5, 2019, all domestic TNC pick-ups moved to the central garage. Rematch disabled. MWAA—Metropolitan Washington Airports Authority SOURCES: ACRP Project 01-35: Airport Survey, June 2018, RSG. ACI-NA, Survey of Airport Trip Fees, August 2018. Airport Ground Transportation Association, 2018 Ground Transportation Vehicle Fees and Fares Survey, March 2018. Ricondo & Associates, Inc., June 2019. Table 3-1. Transportation network company fees and permit conditions at selected airports. TOPIC LARGE MEDIUM SMALL Method used to establish trip fee Cost recovery 42% 25% 13% Market-based 32% 33% 53% In accord with state, municipal, or other enabling legislation 15% 17% 20% No response 11% 25% 14% TNC revenue earmarked 16% 17% 7% Have made capital investments because of TNCs 82% 38% 40% SOURCES: ACRP Project 01-35: Airport Survey, June 2018, RSG. Table 3-2. Establishing and earmarking transportation network company fees by hub.

20 Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide environmental, social, or living wage), or they may delay approving increases for other consid- erations (e.g., labor relations). The scope of this research involved (1) reviewing responses to the airport survey and (2) conducting supplemental telephone and on-site interviews with eight airports, two TNCs, TNC drivers, and several industry organizations. The objective was to develop a thorough under- standing of the current issues, policies, and practices related to TNC management to inform the development of best practices. Table 3-3 summarizes the responses to the survey questions related to pick-up and drop-off operations, hold lots, rematch programs, geofencing, and wayfinding. As a follow-up to the airport survey conducted in June 2018, the research team inter- viewed airport managers, senior TNC company representatives, TNC drivers, and airport CATEGORY LARGE MEDIUM SMALL1 Primary drop-off locations 76% designate the private vehicle departure/ticketing curb; 19% designate private vehicle/baggage claim curb. 75% designate the private vehicle departure/ticketing curb; the others have designated the private vehicle/baggage claim curb and “commercial vehicle only” locations on both departure and arrival levels. 73% designate the private vehicle departure/ticketing curb; 27% designate private vehicle/baggage claim curb. Primary pick-up locations 45% designate private vehicle/baggage claim curb; 32% designate the departure- level curb; the rest designate “commercial vehicle only” curbs or nearby parking structures/lots. 45% designate private vehicle/baggage claim curb; 31% designate the departure- level curb. 40% designate private vehicle/baggage claim curb; 33% designate a “commercial vehicles only” departure-level curb. Has TNC presence led to change in pick-up/drop-off locations of other modes? 45% 23% 13% TNC staging lot location Mean number of spaces 82% dedicated lot; 9% combined taxi + TNC lot 222 spaces 62% dedicated lot; 8% combined taxi + TNC lot 74 spaces 60% dedicated lot; 7% remote lot 29 spaces Rematch status 52% do not allow; 38% allow with some restrictions; 10% allow with no restrictions. 58% do not allow; 8% allow with some restrictions; 33% allow with no restrictions. 33% do not allow; 13% allow with some restrictions; 53% allow with no restrictions. Operational requirements Most airports designate specific pick-up and drop-off curbs, require display of trade dress, and place a limit on dwell time in staging areas; just over one-third require criminal background checks; and 9% of large hubs have a vehicle fuel-efficiency requirement. Geofences Nearly all airports have one or more geofences in place. Areas defined by geofence Large and medium hubs geofence much of the airport property, as well as specific areas (e.g., staging lot, specific terminal areas); small hubs are more likely to geofence specific terminal areas. Have TNCs impacted landside operating costs? Yes: 91% Yes: 62% Yes: 27% Has there been a TNC impact on roadways, curbs, crosswalks? Yes: 86% Yes: 85% Yes: 60% Level of TNC wayfinding 64% have signage equivalent to that of parking or other ground access modes; 23% have no TNC-related wayfinding. 54% have signage equivalent to that of parking or other ground access modes; 46% have no TNC-related wayfinding. 67% have signage equivalent to that of parking or other ground access modes; 7% have no TNC- related wayfinding. 1. Many small-hub airports have only a single-level roadway serving both departing and arriving passengers. TNC—transportation network company SOURCES: ACRP Project 01-35: Airport Survey, June 2018, RSG. Table 3-3. Airport survey results—operations and management by hub.

Impact on Airport Operations 21 industry staff; the interviews represent a cross-section of interests and perspectives on a range of topics. The airport managers tended to focus on themes relating to curb operations, hold lot capacity and location, and the impact of renovations and major capital improvements on curb management and customer service. The TNC representatives highlighted wayfind- ing (for both drivers and passengers), location and condition of hold lots, and a desire for reasonable data reporting and background check requirements. The TNC drivers focused on hold lot management and amenities, as well as challenges related to efficient passenger pick-up. Aviation industry organizations offered critical perspectives and information on wayfinding and trip reporting. Table 3-4 summarizes the main themes by stakeholder. Policy boards, landside managers, ground transportation planners, capital improvement program managers, legal staff, and financial officers have been challenged to respond to the burgeoning role of TNCs. Airport operators initially reacted by developing new rules for pick-up and drop-off activities, improvising hold lot locations, and engaging in negotiations with TNCs over insurance requirements, trip fees, data collection, driver background checks, and other elements that make up the TNC service. As airport staff shared their experiences with industry colleagues, and as new regulatory regimes developed, managers evolved their supervision of TNC activities and now follow a more nuanced approach to managing this new mode. This is not to say that TNCs no longer present challenges; rather, it reflects how airport managers have more experience with integrating TNC operations into their commercial ground transportation services. As evidenced by the comments expressed in the airport interviews, many key issues persist: • Managing curb congestion and enforcing permit conditions. • Supervising and managing staging areas: location, dwell times, amenities, and capacity. • Balancing changes in mode share: reassigning curbs, relocating hold lots, revising fees. • Reassigning pick-up and drop-off locations due to major terminal renovations and capital improvements. • Ensuring safe and secure customer service: driver background checks and training, and pas- senger wayfinding. • Developing constructive relationships with TNCs. • Conducting program audits and ensuring the accuracy of trip reporting. THEME AIRPORT TNC INDUSTRY Recalibrating pick-up and drop-off locations - Revising staging area locations and capacity - Enforcing rules and regulations - - Impact of renovations and capital improvements - - Safe and secure customer service: driver background checks and training; passenger wayfinding Relationships - Program audits, compliance, and trip reporting TNC—transportation network company SOURCE: ACRP Project 01-35. Table 3-4. Key themes expressed in stakeholder interviews.

22 Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide 3.1 Curb Management Airport operators designate the level (departure or arrival) and the assigned area (private vehicle, commercial vehicle, courtesy shuttle, etc.) for TNC drop-off and pick-up. Grow- ing enplanements at many airports have resulted in congested curbs and roadways at peak periods; in response, airport operators have reassigned TNC operations from congested to less congested levels. As an example, in June 2019, Denver International Airport (DEN) changed TNC operations by moving all pick-up and drop-off activity to its commercial vehicle level. This change was prompted by the growth of both enplaning passengers and TNCs, which was creating a bottleneck on the departures level.36 Dallas Fort Worth (DFW) conducted a com- prehensive analysis of curb conditions; this resulted in reallocation of curb assignments and a plan for “permanent holistic curbside signage.” Current curb signs at DFW Terminal D are shown in Exhibit 3-1. As well, airport operators have modified curb assignments and, in some cases, have relocated TNC passenger pick-up to nearby garages or surface lots. As explained by one airport executive, TNC pick-up can require more curb capacity than other modes: TNCs arrive more randomly (as distinct from taxis queuing at the curb), and drivers and passengers may need time to identify each other. As he noted, “With pick-up on the arrival level, the taxi waits at the curb; with TNCs, the passenger waits at the curb.” An effective practice is to relocate TNC activity to a nearby garage or intermodal facility. 3.2 Staging Areas Several airport operators said their initial staging lots quickly filled to capacity and that alter- native sites were soon needed. This reflects the rapid capture of market share, as well as the lack of experience in forecasting TNC demand. Accurate data and information from TNCs would help inform the sizing of staging lots. Although the airport survey found that for large-hub airports the mean staging lot capacity is just over 200 spaces, the interviews suggest 265 to 300 spaces reflects a more reasonable number. 36 Personal communication from Herald Hensley, Acting Senior Vice President of Parking and Transportation Systems, Denver International Airport, August 7, 2019. SOURCE: D. Galloway, DFW International Airport, August 7, 2019. Exhibit 3-1. Curb signs.

Impact on Airport Operations 23 Adequate staging lot capacity is also important to avoid queues from vehicles entering the lot spilling back onto adjacent access roads. Almost all staging areas have sanitary facilities and trash holders, and one has a space for prayer. Amenities such as driver lounges, canteens, or vending machines are not typically pro- vided; at several airports the staging lot is a short walk to a nearby gas station or convenience store. Many airport operators regulate activities in staging lots, including limiting dwell time and engine idling. Exhibit 3-2 presents two examples of TNC staging areas. 3.3 Balancing Changes in Mode Share As market shares change, airport operators are reviewing the location and capacity of ground transportation facilities. One airport operator interviewed is relocating the initial TNC staging area to the taxi area and relocating the taxi pool to a smaller and more remote location. Another airport operator has carved out just over 300 spaces in a parking overflow lot a 5-minute drive to the terminals. Additionally, in response to market share changes and congestion, another airport operator has split its TNC pick-up locations. The airport offers either curb pick-up or pick-up at a nearby garage, and it has instituted a two-tier trip fee: $5.00 for curb pick-up and $3.60 for garage pick-up. 3.4 Reassigning Pick-Up and Drop-Off Locations Due to Major Terminal Renovations/Capital Improvements Several airport operators interviewed are in the midst of capital improvements that have affected curb access and roadway configurations. Terminal doors may be closed, sidewalks and waiting areas may become inaccessible, and there may be temporary or long-term lane closures and diversions. Such changes require close coordination and communication with TNCs to ensure apps reflect the most current conditions. Reconstruction projects are done with some regularity, so all commercial ground transportation providers must be well briefed on planned changes to terminal access and roadway traffic patterns. DFW International Airport Boston Logan International Airport SOURCE: D. Galloway, DFW International Airport, August 7, 2019. Ricondo & Associates, Inc., September 2018. Exhibit 3-2. Staging area.

24 Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide 3.5 Safe and Secure Customer Service: Driver Background Checks, Driver Training, and Passenger Wayfinding Ensuring the safety and security of passengers is of paramount importance to airport manage- ment. Thorough driver background checks are essential, yet the adequacy of screening TNCs conduct has been a contentious issue. Massachusetts requires CORI and sex offender checks for drivers; this level and quality of reporting should be the best practice. Driver turnover is high for TNCs (relative to other providers), and airport roadways and curbs are often congested. Airport operators thus should include driver training as a require- ment in permits. Airport operators should also reserve the right to review and approve train- ing materials. TNCs train drivers through their websites and apps. Landside managers should regularly review and verify the adequacy of this training. Driver training is discussed in more detail in Section 5. Most airports provide wayfinding similar to that provided for the other commercial ground transportation services: limos, taxis, courtesy shuttles, and public transportation. Some airport operators have not installed signage specific to TNCs, while others have worked to develop way- finding terms and signs to guide passengers to designated pick-up zones. The lack of consistent signage across airports led the AAAE to recommend a more standard approach to TNC terms and icons for signs.37 Wayfinding is discussed in more detail in Section 5. 3.6 Developing Constructive Relationships with Transportation Network Companies All airport operators interviewed said senior landside managers meet regularly with repre- sentatives from the TNCs. These meetings offer an opportunity to discuss proposed changes in procedures and curb assignments, to discuss upcoming capital projects that may alter access patterns, and to identify emerging customer service or enforcement issues. Several landside managers mentioned walking terminal curbs with TNC representatives to observe operations and to discuss the rationale for the airport’s rules and regulations. 3.7 Ensuring the Accuracy of Trip Reporting and Program Audits All airport managers interviewed said their TNC permits included the requirement that the company allow an airport operator to conduct an independent audit to ensure trip fees are properly recorded. The audits also typically test whether the company and its drivers are complying with other permit terms and conditions, particularly liability insurance. While identifying any discrepancies in reported activities, underpayments, or other violations of the agreement,38 the audit can also be used to test and verify the accuracy of the geofence coordinates the company is using. 37 “Establishing a Common Standard for TNC Wayfinding at Airports,” AAAE, August 2018. 38 For an example, the Port of Seattle’s recent audit of TNCs can be accessed at https://meetings.portseattle.org/portmeetings/ attachments/2018/2018_03_19_SCM_9_TNC.pdf.