Sometime in 2014, a scattering of vehicles started showing up at Austin-Bergstrom International Airport, darting in to pick up airline passengers who had hailed them via smartphone apps.
The vehicles, often unmarked and blending in with others, were being parked by drivers at random areas around ABIA and pulling up curbside at the airport’s main Barbara Jordan Terminal.
The ride-hailing firms were convenient, and they were a natural fit for the airport’s on-demand environment. They also were disruptive to the status quo, which for many years had seen most passengers use taxis and shuttles, which had longstanding partnerships with the airport.
Now, roughly four years after these firms began shaking up the ground transportation business at ABIA, the at-times contentious relationship between Austin’s airport and ride-hailing companies has reached a more settled point — one representative of the importance ride-hailing companies now have for ABIA.
The four primary ride-hailing firms that serve the Austin metro area — Uber, Lyft, RideAustin and Wingz — have all recently signed contracts with ABIA that will guide how they operate at the airport for years to come.
The agreements, which vary in detail but mostly consist of the same deal, lay out rules that include standard fees each company will pay the airport, how ride-hailing entities can engage with airline passengers and the type of data ABIA can collect from the corporations.
“What we have done is create a long-term strategy with all of these transportation companies,” ABIA spokesman Jim Halbrook said. “It’s basically the same agreement for all.”
Market leader Uber signed a one-year agreement, while the three other firms agreed to three-year deals, according to contract details provided by ABIA.
Under each contract, the ride-hailing entities will pay the airport $2 for each passenger picked up at the airport and $2 for every passenger dropped off, with those fees up for evaluation each year.
ABIA is also using a new system to track ride-hailing vehicles in order to gather data on traffic patterns and other information, and the airport will increase the number of transportation network signs that navigate airline passangers to curbside pickup areas.
Ride-hailing companies are having their drivers wait for rides at a new parking lot near Freight Lane and Rental Car Road at the airport’s north end. The area is a more official spot than a smaller space by the Hilton Austin Airport where drivers previously waited for rides, and it includes amenities such as bathrooms.
‘Airports have evolved’
Airports have become one of the primary sources of business for ride-hailing companies. Lyft, for example, said ABIA is the company’s No. 1 pick-up and drop-off location in Austin. In 2017, Lyft said it gave 375.5 million rides nationwide. Ride-hailing companies have similar agreements as the one at ABIA at other airports, according to Uber spokesman Trevor Theunissen.
“We need to be able to provide this type of service for patrons, especially with the young millennial community,” said Don Griffin, Lyft’s manager for development at airports and venues. “Airports have evolved to give quick, affordable rides — not having to carry cash.”
As much as ride-hailing companies count on business from airline passengers, airports also rely heavily on non-airline revenue generated by services such as ground transportation. In 2016, about 57 percent of ABIA’s revenue came from non-airline services, of which 51.7 percent was from parking and ground transportation, according to an annual report by ABIA.
While the airport’s revenue from parking and ground transportation has increased as ride-hailing has grown in popularity — growing by $6 million from 2014 to 2016 — the traffic from taxi services and shuttle companies has decreased.
In 2017, for example, ABIA records show taxis having 16,440 transactions at the airport during the relatively high-traveled month of June, compared to the 27,203 transactions taxis had for the same month in 2013, the year before ride-hailing companies began appearing at the airport. Use of hotel shuttles decreased by about 1,000 for the same time period.
That trend is not unique to ABIA. According to a recent report by the National Academic Press, airports have experienced a roughly 5 percent to 30 percent decrease in taxi trips and an 18 percent to 30 percent decrease in shared rides, such as shuttles. The survey was conducted at the 100 largest U.S. airports and collected publicly available transportation data. The National Academic Press is the publishing arm of the research nonprofit National Academies of Science, Engineering and Medicine.
The downturn in taxi and shared ride services led to a decrease in revenue from these transportation options to airports, the report found. At the same time, airports have had to add staff to manage new ride-hailing options and have seen added congestion caused by ride-hailing firms. The study did not measure whether airports’ revenue from ride-hailing firms matched or exceeded the revenue lost from taxis and shuttles.
“The issue could become, ‘What’s going to happen as some of this (taxi-driven) revenue continues to go down?’ It’s going to have to be replaced,” said Chandra Bhat, director at the Center for Transportation Research at the University of Texas. “Airports, as they move into the future, will have to ask different questions like, ‘In the grand scheme of things, do we need to build more parking?’ How investments are made – that’s what cities have to be concerned about.”
ABIA has benefited from Austin’s booming population and growing number of airline flights, but it has also been helped by Texas being one of a minority of states that specifically allow airports to charge ride-hailing firms to operate on their property.
Taxi companies pay ABIA the same $2 per trip, although that fee will increase by 50 cents each year until 2021. The fee that ride-hailing firms pay ABIA ties Dallas/Fort-Worth International Airport as the highest in the state, said Theunissen, the Uber spokesman.
It’s taken years for ABIA and the ride-hailing firms to settle on their current deals. The companies said negotiations have been hamstrung by disagreements on price and other details, but were also delayed when Uber and Lyft stopped operating in Austin from May 2016 to May 2017 during a fight with the city of Austin over background check rules for their drivers.
Ride-hailing companies “had a little bit of a different idea in how they operated,” said Halbrook, the ABIA spokesman. “It took some time to work together with them to integrate them with the airport and smooth out the process with the airport.”
Before signing the new agreements, ride-hailing firms since last summer were paying the airport $2.50 per trip under agreements that ABIA described as month-to-month deals. Prior to that, the companies had paid the airport $1 only for pickups beginning around 2015.
Airport and ride-hailing officials say this is only the start of a long-term partnership.
“We have had some disagreements, but we have a good relationship” with ABIA, Theunissen said. “There’s mutual respect and understanding and appreciation. We have shared customers.
“The airport recognizes that (ride-hailing companies) are a major player.”