Politics

Threat to Revenue: Metro Airport Is Uneasy About State Bill to License Uber and Lyft

October 30, 2016, 12:20 PM by  Alan Stamm

Uber and Lyft are leading examples of "disruptive innovation." They jolt business models in a way that shakes up consumer habits, employee recruiting and the bottom line.

As popular ride-sharing apps unsettle the taxi, limousine and airport transport industries, protective reflexes bring lobbying for walls or moats to combat the invaders.

 

The latest pushback is under way in Lansing, Lindsay VanHulle of Crain's Detroit Business reports from the capital:

Legislation to create a statewide licensing system for the ride-hailing companies, which let customers summon rides through smartphone apps, has [Detroit Metro and other] airports fighting back to protect revenue streams. . . .

Airports across the state [are] lobbying for an exemption to rules they say would prevent a local government from enforcing its own ordinances. . . .

A provision that would ban local governments from imposing a tax, fee or license or imposing regulations appears in revised bill language that a Senate committee chairman said was presented less than two hours before his panel met this month to consider the bills.

Airport executives consider the language too broad. . . They believe a provision that says local governments "may" enter into an agreement with Uber or Lyft, taxis or limos would not require the transportation companies to join an airport at the bargaining table and, in essence, give them the ability to operate as they please.

A Lyft executive spoke at a Senate hearing and to Van Hulle:

The revised legislation doesn't prevent airports from making deals with ride-hailing companies, Funsho Owolabi, Lyft's public policy manager, . . . said in an interview.

Lyft has operating agreements with more than 70 U.S. airports, Owolabi said; it says the only Michigan airports it serves are in Lansing and Grand Rapids.

Brian Sadek, a vice president at the Wayne County Airport Authority, tells Crain's that the airport earns about $5 million annually from on-site ground transportation services -- Metro Cars and Metro Cab -- and from $10 access fees charged for each pickup by outside taxis and limousines.. VanHulle writes:

Sadek said the airport could lose revenue if it no longer can execute the rule for transportation companies.

"We're talking millions of dollars," he said. "Any significant decrease in revenue runs the risk of making us less competitive to airlines ... in a very competitive industry."

Delta, the airport's biggest carrier, Delta, stands with the authority, Crain's reports:

In a statement, the airline said it "fully supports the ability of Uber and Lyft to operate" at Metro and other airports, but not at the expense of an airport being able to enforce its own ground transportation rules or collect local revenue.

Delta and other airlines are required to cover the operating budget gap that remains after the airport collects all revenue from ground transportation, parking, concessions and other non-airline sources, so more ground transportation revenue collected would mean less money that the airlines have to pay.

Both Delta and Metro Airport say any decrease in local revenue, such as from ground transportation, could make the airport less competitive when it comes to such things as flight schedules, connections and fares.

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Read more:  Crain's Detroit Business


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