It’s a bright, summerlike afternoon, and more than a hundred cars are idling in a lot near Terminal A at Reagan National Airport. Just two years ago, this was another parking lot. Now it is where drivers for Uber, Lyft, Via and other ride-booking services huddle until they are summoned by smartphone.
Each time a driver leaves the lot and heads to the terminal, that’s another $4 for the agency that manages the airport. It might not seem like much, but multiplied over the course of a day, a month and a year, it adds up to millions.
The arrival of the ride-booking services was cheered by travelers, but the companies have also proved good news for airport executives here and across the country. After a rocky start, Uber, Lyft and other transportation networking companies (TNCs) — have formal agreements in place at more than 100 U.S. airports. And it seems, for now, that both sides are benefiting.
“We work collaboratively with airports around the country to ensure that travelers can rely on Lyft for a safe, reliable and affordable ride on-demand,” Bakari Brock, the company’s senior director for business operations, said via email. “By working closely with airport officials, we’re able to create the best experience possible for both drivers and passengers.”
At National and Dulles International Airport, these services have quickly become one of the fastest-growing sources of revenue. In 2016, the airports made more than $14.5 million from ride-booking service fees. At Los Angeles International Airport, officials estimate the app-based services have brought in more $40 million since they began operating in 2015.
“Ground transportation [at airports] has changed,” said Carter Morris, executive vice president for AAAE Services at the American Association of Airport Executives.
The sheer number of airport trips now handled by ride-booking services is staggering. At the Los Angeles airport, TNCs have given more than 10.5 million rides since December 2015. In Washington, officials estimate that ride-booking services account for an average of 14,800 trips a day to and from National and Dulles. The services have not eclipsed taxis at the Washington-area airports as they have at others around the country, however.
TNCs “have become the largest segment of our ground transportation picture and the most popular form of commercial transportation,” said Doug Yakel, spokesman for San Francisco International. In July, for example, travelers made 300,000 airport trips using TNCs vs. 100,000 via taxi, he said.
At Boston’s Logan International Airport, which only recently allowed TNCs to pick up passengers, the services also are becoming serious players. A recent report found that ride-booking companies are quickly catching up to taxis. According to a recent report on the arrangement, in the six months since the airport began allowing TNCs to pick up passengers, their share of the market has grown to just over 18 percent.
Airport revenue has traditionally come from two sources: services provided to airlines, such as leases, landing fees, fuel and other aviation-related services — and non-aeronautical revenue, including rental car leases, shops, food and beverage sales, and now TNCs. In recent years, airports have sought to increase this share of their income as a hedge against the volatility of the airline business.
While they welcome the additional dollars, airport officials are quick to note that there are trade-offs. The impact of ride-booking services on the taxi industry has been well-documented, but it is the demand for parking that may be of most concern for airport officials since it is one of the airports’ biggest moneymakers. At National, where garages routinely used to fill so quickly during peak travel periods that officials created a reservation system, there are now spaces available even at busy travel times. In Los Angeles, parking revenue remains strong but has been lower than expected since the arrival of TNCs.
Jerome Davis, chief revenue officer at the Metropolitan Washington Airports Authority, said parking fees account for about one-third of the money that MWAA brings in from non-airline sources.
The math is simple: MWAA makes $25 a day when a traveler parks in the daily garage at National, but only $8 if that same passenger decides to use a TNC to get to and from the airport. That $17 difference can add up quickly.
Airport officials say it’s not time to panic, however.
“Parking will be around for a while,” Davis said. “Americans love their cars and they love owning their cars and driving their cars. But we still have to make sure we’re in the best position to reap the benefit of these new forms of transportation.”
Even so, it’s possible that future building projects might include fewer parking garages and more focused efforts to maintain roads, he said.
MWAA might get a sense of the effects on traditional transportation services later this year, when negotiations begin on new taxi and rental car contracts.
For now, though, there is the question of managing the addition of thousands of vehicles at airports that weren’t designed to handle large volumes of traffic. In some cases it involves reallocating curb space, as officials did in San Francisco, where traditional shuttles lost space to make room for pickups and drop-offs by ride-booking services. At National, it has meant deploying police officers to unsnarl traffic jams around Terminal A, the main entry point for vehicles arriving at the airport.
Given how ubiquitous they’ve become, it’s hard to believe that TNCs are a relatively new phenomenon. And it’s only in the past two years that airports have been able to benefit financially from the services, striking agreements to collect per-trip fees that are in most cases passed on to customers.
Before that, the services played a game of cat-and-mouse with airports, rallying their customers to lobby on their behalf when airports threatened to ban them.
Now the two sides talk about their “partnerships.” On their websites, both Uber and Lyft tout their airport service, offering customers the opportunity to book trips in advance.
Financial arrangements at airports vary. Some charge only when drivers pick up a passenger while others charge a set fee — between $2 and $5 — for each pickup and drop-off.
At $4 a ride, National and Dulles are on the high end. At Baltimore-Washington International Marshall Airport, the charge is $2.50.
On a recent day, Uber driver Sid Bahbah popped out of his car for a quick smoke break between pickups at National. He said the lot where drivers queue is always crowded but moves quickly. He pulled out his smartphone, which showed that he was 19th in line to be called. A few seconds later, the phone beeped. He’d moved to 14th. He’d barely reached for a match to light his cigarette when the app indicated that he was eight minutes from being summoned. No time for a smoke, he said, heading back to his car.
MWAA’s Davis thinks the changes ushered in by Uber and Lyft are only the beginning for airports.
“Today it’s Uber — tomorrow, it may be self-driving cars,” he said. “We have to be prepared for the future.”