New York Times: Airports Are Losing Money as Ride-Hailing Services Grow
Dec 15, 2017, 12:33 am
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New York Times: Airports Are Losing Money as Ride-Hailing Services Grow
For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?
Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.
But that’s not the case for airports. Travelers’ changing habits, in fact, have begun to shake the airports’ financial underpinnings.
Fewer people are parking cars at airports, using taxis or renting cars, according to a
recent report from the National Academies Press.
Those trend lines are hurting airports, which depend on fees from parking lots, rental car companies and taxis as their biggest source of revenue other than the fees paid by the airlines. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.
Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.
But that’s not the case for airports. Travelers’ changing habits, in fact, have begun to shake the airports’ financial underpinnings.
Fewer people are parking cars at airports, using taxis or renting cars, according to a
recent report from the National Academies Press.
Those trend lines are hurting airports, which depend on fees from parking lots, rental car companies and taxis as their biggest source of revenue other than the fees paid by the airlines. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.
Last edited by cblaisd; Dec 15, 2017 at 7:39 am Reason: Made it clear that posted text is a quote from the article
Dec 16, 2017, 10:01 am
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The airports got greedy in ways. That worked better for the airports when internet penetration level were low and smartphone use wasn't so ubiquitous. It doesn't take genius to figure out that an Uber to an off-airport car rental will save on rental car costs, that Uber/Lyft can help toward reducing transport and parking costs, and that maybe a car rental isn't even necessary for trips like it used to be.
Also, given that the airlines have been hitting up customers for baggage fees, money that used to go toward using airport shops/restaurants and other airport-located facilities is increasingly sucked up by the airlines rather than by (non-airline) rental/retail venues.
Also, given that the airlines have been hitting up customers for baggage fees, money that used to go toward using airport shops/restaurants and other airport-located facilities is increasingly sucked up by the airlines rather than by (non-airline) rental/retail venues.
Dec 18, 2017, 10:06 am
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It's not an easy time to be in the industry, is it?
Yes, some airports have got greedy, but they also get squeezed. Majors get intense competition from LCCs, who between them put the pressure on different airports to squeeze the fees down to an absolute minimum. The airports costs rise, just as the airlines' do, so the only ways to make it back are through retail, rent and parking. Be thankful if you don't have the horrendous "exit-through-the-gift-shop" retail maze immediately after security that is now the norm at LCC-dominated UK regional airports, or the £3+ fee just to drop someone off at the terminal, or the artificial restriction of security officers in the main section so you can sell £5+ premium security.
In the last few years, airports here have had to negotiate with airlines to allow a carrier bag of shopping bought in the airport to be carried on board...
Yes, some airports have got greedy, but they also get squeezed. Majors get intense competition from LCCs, who between them put the pressure on different airports to squeeze the fees down to an absolute minimum. The airports costs rise, just as the airlines' do, so the only ways to make it back are through retail, rent and parking. Be thankful if you don't have the horrendous "exit-through-the-gift-shop" retail maze immediately after security that is now the norm at LCC-dominated UK regional airports, or the £3+ fee just to drop someone off at the terminal, or the artificial restriction of security officers in the main section so you can sell £5+ premium security.
In the last few years, airports here have had to negotiate with airlines to allow a carrier bag of shopping bought in the airport to be carried on board...
Dec 18, 2017, 12:04 pm
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When ORD charges $40/day for parking in the main garage, I don't exactly have sympathy. The result is entirely foreseeable.
Dec 19, 2017, 2:00 pm
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Originally Posted by jaymar01
airports, which depend on fees from parking lots, rental car companies and taxis as their biggest source of revenue
Watched the Smithsonian Channel a couple of days ago and they had a documentary series called Airport X-Ray. The episode I caught was about airport retail operations in FRA.............very interesting indeed, especially the bit about how much of the airport's revenue comes from retail.
Last edited by KDS777; Dec 19, 2017 at 2:06 pm
Dec 22, 2017, 10:58 pm
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Dec 25, 2017, 11:19 am
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It ranges from $35-40/day for valet parking at SAN all the way to $13/day for the lot next to the Rental Car Center (5-10 minute shuttle ride depending on terminal and traffic). I admit that I've done the latter for short trips before when I couldn't find a friend to drive me to the airport; Uber is around $20-25 one way from where I live, so it doesn't make sense unless the trip is longer than a week or so.
Dec 26, 2017, 3:56 pm
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The answer is that not every Uber passenger is a former taxi passenger: When Uber comes to town, they can many more passengers than the taxis lose. That is, Uber expands the entire market for that type of transportation. To the extent that more people shift to taxis/Uber and away from parking their own cars in the terminal, airport revenue goes down.
Dec 26, 2017, 4:48 pm
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I believe the NYT is not 100% correct. Retail shopping space is the #1 revenue source for most airports from what I have read.
Watched the Smithsonian Channel a couple of days ago and they had a documentary series called Airport X-Ray. The episode I caught was about airport retail operations in FRA.............very interesting indeed, especially the bit about how much of the airport's revenue comes from retail.
Watched the Smithsonian Channel a couple of days ago and they had a documentary series called Airport X-Ray. The episode I caught was about airport retail operations in FRA.............very interesting indeed, especially the bit about how much of the airport's revenue comes from retail.
Feb 21, 2018, 7:33 am
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Agree completely. Uber has now made the equation of whether or not to park at the terminal for 3-4 day trips more simple. Airports took travelers for granted and must now re-jig their operations to find inventive ways to deliver better, more value-added services.
Mar 7, 2018, 7:56 am
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.......... Be thankful if you don't have the horrendous "exit-through-the-gift-shop" retail maze immediately after security that is now the norm at LCC-dominated UK regional airports, or the £3+ fee just to drop someone off at the terminal, or the artificial restriction of security officers in the main section so you can sell £5+ premium security....
Mar 7, 2018, 7:58 am
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The answer is that not every Uber passenger is a former taxi passenger: When Uber comes to town, they can many more passengers than the taxis lose. That is, Uber expands the entire market for that type of transportation. To the extent that more people shift to taxis/Uber and away from parking their own cars in the terminal, airport revenue goes down.
Mar 8, 2018, 3:41 am
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Mar 8, 2018, 5:58 am
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