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Driving Revenues

Revenue from the short-term parking lot at T.F. Green Airport increased 45 percent in 2017, funded in large part by passengers using Uber and Lyft, with drivers passing along a new $6 fee to their customers, who are now required to be picked up in the short-term lot. This week: Jim Hummel talks with the ridesharing drivers, passengers and a spokesman for the airport, who says the additional fees are need to offset a steep decline in other revenue that has been siphoned off by the emergence of Uber and Lyft.

SCRIPT:

T.F. Green is an attractive airport for many travelers because of its size and convenience: a single terminal to negotiate and easy drop-off within steps of the building. But a decision last year by airport officials means passengers arriving at Green who want to use a ridesharing service like Uber or Lyft now have to be picked up in the short-term parking lot across from the terminal - and pay an extra $6 fee to do it.

Last year the Rhode Island Airport Corporation ended free Uber and Lyft pickups right outside the terminal,  with the threat of an $85 fine for noncompliance.  It also doubled the minimum charge to use Lot D, the short-term, lot from $3 to $6. That generated 45 percent more revenue in 2017. The fee gets passed along to the customers and applies to visitors parking short-term to pick up family or friends as well.

Ransom: ``I’m probably here easy seven, sometimes eight times a day depending on which day of the week I’m actually here.’’

David Ransom is a retired National Guard sergeant who began driving for Uber and Lyft a year ago - when he could still pick up passengers in an area shielded from the elements. While arriving passengers only have a two-minute walk to get to his location in the short-term lot, Ransom says it’s still not as convenient.

Ransom: ``You’ve still got to walk across the street, in the rain, in the snow, whatever, just to get out here. And obviously this time of year it’s very, very cold, the wind is blowing, we’re in an open area and I just think it’s not smart.’’

So why the change? Airport officials say they need the additional $640,000 generated by higher rates to offset a steep decline in other revenue like car rental and parking fees - siphoned off by the emergence of Uber and Lyft. The Transportation Network Companies - TNCs as they are known - and some passengers are crying foul: saying it sends the wrong message to people visiting Rhode Island for the first time.

Michael McMullen, a businessman from Providence who often flies in and out of Green, told us: ``They talk about making Rhode Island a friendlier place to do business. That’s one of the things that is unfriendly. It’s not so much about the money but about the message it sends out.’’

Fischer: ``The days of taking exclusively the taxi to the airport  or parking your car for a week in long-term parking, they’ve changed that game and in fact it’s impacted our revenue significantly.

Airport spokesman William Fischer said federal law mandates that T.F. Green - and all airports across the country - be self-sufficient financially, receiving no taxpayer subsidies. The two main sources: airline fees and other revenues like concessions, parking and rental car fees.

Fischer: ``You’re trying to find a balance between the consumers, and the prices you’re charging and making sure that you’re in a position to be competitive and attract airlines here.  And what we’ve done in the last year and a half is attract airlines here. We’ve brought five airlines to T.F. Green, two of them international, and we also added 16 nonstop routes in a about a year.’’

A spokeswoman for Uber tells The Hummel Report that Green Airport has the highest pickup fee of any airport in the country. But Fischer said that’s not the whole story because T.F. Green does not charge for drop offs.

Hummel: ``Their assertion is that T.F Green has the highest pick up rate in the country, at $6. And your response is?’’

Fischer: ``And our response is that there are plenty of higher  rates when you combine pickup and drop off rate at other airports. We are competitively priced, there is no drop-off fee for passengers coming to the airport and I think it is common sense to assume that most folks who take an Uber here are leaving on an Uber. Because of that we have to capture the revenues that they have impacted in other areas. It’s just that simple.’’

Cleary Uber and Lyft have changed passenger practices. Rental car fees were down $450,000 last year alone. Perhaps most hurt has been the taxi company that has an exclusive contract with the airport, and in return is given a prime spot right outside the terminal.

Fischer: ``The advent of TNCs has changed market behavior. In a 10-year period we’ve seen a decrease from 70,000 taxi runs a year to $50,000, 30 percent drop.’’

The Uber drivers are assigned space in the northern end of the short-term lot. Many are in and out of the airport  eight or 10 times a day. That’s a $6 fee for every visit. Carlos Gomez says the airport should consider a compromise.

Gomez: It’s $6 for even 2 seconds - the minute you put a foot in the lot it’s $6. It does impact some of the business.’’

Hummel: ``Do you think it’s unfair?’’

Gomez: ``Yeah, I think it’s unfair, they should have at least a monthly pass that you can pay every month.’’

Hummel: ``So you can come in as much as you want.’’

Gomez: ``Yeah. And just pay one monthly fee.’’

Hummel: `` You understand the airport’s got to make their money.’’

Gomez: ``I understand. I’m not even talking about cheap money, it could be $100 or $150 a month.’’

Hummel: ``I’ve talked to some of your fellow Uber and Lyft drivers who said that it’s beginning to impact the tips a little bit.’’

Gomez: ``Yes, it does.’’

Hummel: ``In what way?’’

Gomez: ``They just charge more to the people so people just don’t give you a tip.’’

Ransom: ``The passenger now gets an extra $6 added on to their fare and there’s talk that it’s going to go up higher. So now, even with the $6 on there, there’s not a lot of tips that go on there. The passengers certainly understand that we’re here to make money, make it a little easier for their transportation needs - but $6 added on to them is $6 I’m not going to get in a tip.’’

Hummel: ``What’s the compromise here, Dave.’’

Ransom: ``I guess the compromise would be that the airport knows that we’re here providing a great service for the passengers who are coming in and out of our airport. Perhaps maybe they could give us a better rate, a monthly fare. Maybe a pass to the Uber drivers because there’s no doubt they can tell, because they collect our license plate data all the time, that we’re here all the time. The fact that we’re paying $6, sometimes $50/$60 a day is a little bit outrageous.’’

Hummel: ``Has the airport discussed a flat fee  for a day?’’

Fischer: ``Well, look, that’s some that’s being spread across their customer base. We didn’t pick $6 out of thin air. We looked at our revenue stream across the board, non airline revenue, airline revenue and we feel like we’re at an appropriate place for that right now. The entire market place has changed. Obviously these drives are doing very well. But they’re impacting other revenue streams that have supported this airport for many years and they have to be replaced somewhere, somehow.’’

Then there’s the person who parks in the short-term lot to pick up a friend or family. They are now paying double the minimum fee that they were early last summer.

Hummel: ``To the person now who has got nothing to do with Uber or Lyft, they’re coming to pick up their grandmother, or their kid has bags, and maybe they really do need to go into the airport. And they’re only here 10 or 15 minutes, maybe a half hour and they’re paying $6, what’s your answer to them when they say well why should I have to pay that too?’’

Fischer: ``I’d say that $6 is a competitive rate with other area airports. I’d say that they have a free option at the cell phone lot across the street, which is very convenient and a lot of Rhode Islanders use, but we want to make sure Rhode Islanders are aware of that. It’s a consumer-based fee and because we rely on standalone revenues, we don’t have an operational appropriate in the state budget. ‘’

Ransom says he gets an earful from passengers when they arrive in Rhode Island for the first time and are hit with a $6 pickup fee.

Ransom: `` We’ve got a beautiful state. We have people who come here all the time for business, people who are here  visiting. Come up with a compromise. We’re business people, small business people trying to earn a living. To add on this fee to the passengers, to make the drivers have to pay this out of their pocket, ahead of time, I think is a little upsetting. I think we could do a better way.’’

In Warwick, Jim Hummel, for The Hummel Report.