Lyft and Uber Car Service and Atlanta Airport Parking Fees

Atlanta is in the midst of one of it's scandals and the details of how the City and Airport are engaged in making everyone's life more difficult and expensive is a lot more interesting than the rinse and repeat saga public officials being implicated that is reported in the lamestream media.

There will be an investigation, likely guilty parties will be identified and, following a very public trial and lots of grandstanding by the District Attorney, punishment will be meted out or the indicted declared pure as the driven snow. That, however, is a just a side show, which won't make a damn bit of difference in the way the City does business; or, to put it correctly, I should say, the way the City employs "civil servants" to interefere with people attempting to do business.

Mayor Reed recently fired the Miguel Southwell, the GM of Hartfield-Jackson Atlanta International Airport, which I will be referring to as the Airport (there's a story there too).

What's all the brouhaha about? Why that would be money, of course, and actually pretty BIG money. The Airport is so far and away the City's largest generator of revenue that all else pales in comparison (The City's budget is available here.) The Airport is projected to bring in $514,980,305 in 2016. This amount is projected to decrease in 2017 to $503,715,371. The decrease is due to the City (or maybe the GM of the Airport) cutting the landing fees from the airlines by $27,371,907.

Well, well, well. Isn't that something? A $27M reduction to the airlines. I wonder what all that is about? Likely something to do with their leverage if the Airport is to stay the busiest airport in the world.

That $27M that the Airport/City is giving up has to come from somewhere--neither the Airport nor the City are likely to tolerate actual revenue reductions. So where shall it come from? According to the City's projected budget, public parking at the Airport is projected bring in $136,553,058 to the City in 2017. This is the largest line item of Non-Aeronautical Revenue from the Airport Revenue Fund. Airport concessions generate less than half of this amount for the City since the City has to share with the airlines. Further, most of the line items for Airport Revenues are projected to decrease, remain flat or experience very modest increases.

Parking revenues from the Airport are projected to increase significantly- the increase from 2016 to 2017 is more than $12M or roughly 10% from 2016-2017. [page 116 proposed budget]. So, by observing the rule that one should follow the money, we can deduce that the fight between Mayor Reed and Mr. Southwell is mostly about Airport parking revenues and tangentially about other matters.

Why are parking revenues to increase? Will the parking areas at the Airport increase in size? Will the Airport be even busier than in years past?

The parking areas will not be increasing. In fact, according to the budget (page 119) "certain pojects are on the horizon that could significantly impact our parking." I take that to mean that available parking areas will likely decrease, but still revenue is projected to increase.

Once again the proposed budget is very revealing of the true situation; it states that "additional revenues will be generated in [the Ground Transportation] Category once the pending agreements with several Transportation Network Companies are signed. (The term Transportation Network Companies isn't defined, but likely refers to Uber and Lyft). [page 121 of the proposed budget].

 

Parking revenues will increase because the City/the Airport is going to drive down the options for getting to and from the Airport and increase the cost of the ride/park options it does allow.

Think about that. By making service worse, decreasing the residents options for getting to and from the Airport and parking at the Airport, the City and the Airport can drive up their own revenue. Worse service/costs more. What a slogan.

Oh, but you say, Rose, this is just wild speculation on your part, why would you say something so bad with no basis? Maybe because, on May 2, 2016, the City Council unanimously passed an ordinance [16-O-1146] imposing a variety of new fees and requirements on Uber and Lyft drivers at the Airport. You may have read about these, the blood tests, finger prints, etc, but those are the sideshow.

The most fascinating aspect of that Ordinance is that it granted the Airport Manager the the right to "establish a maximum number of rideshare driver vehicles" that may be at the Airport at any one time. (See page 9 of 13 of the Ordinance).

 

Now, the Mayor very likely needs leverage over Uber and Lyft in those "pending agreement" negotiations to let them know he can make their businesses much more challenging by making rideshare services at the Airport both unpredictable and expensive; thereby enhancing the revenue generating potential of those giant heat sinks known as Airport parking. Who would take Uber/Lyft to the Airport if they thought they might likely face surge pricing or no availability of ride share service? In short, the Mayor (and likely the new GM) will be using his ability to make us all pay more for worse service as leverage. Some public servant, huh?

 

The City of Atlanta has a monopoly on Airport access and it is using that to drive up all of our costs while decreasing the quality of service. It's not enough that we get abused by the TSA, it now must start as soon as attempt to access the Airport.

 

If one is looking for the white knight in the dispute between Mr. Southwell and Mayor Reed, there doesn't appear to be one. Getting to and from the airport will be less convenient and more expensive no matter who wins that little tiff. That's not just my idea, that is written into in the City's budget.

 

Now, if you only want to know the facts and don't care why and how we got to this point, you can stop reading here.

 

If you care to think more deeply about this then this is the situation is worthy of further examination.

 

First, this situation reveals that we have an accounting problem when we count the work done by the government as a "good" which has a value equal to its cost. Normally, that is how government services are accounted for; however, in this instance there is no good produced at all. There is only a bad. We would all better off if the City and the Airport did nothing at all respecting Uber and Lyft's access to the Airport.

 

Secondly, there is not only the initial cost of passing the regulation and raising prices for services, but there will be on-going costs of employing civil servants to carryout the regulations created by the City and Airport. We will continually pay for people to make services more expensive and worse for us all. Now do you see how government is failing its citizens?

So, you see why I began as I did. The media is attempting to solve the wrong problem, which is to locate malfeasance in single individual, but it's a system failure that will injure all of us without respect to the wrongdoing of any single person. I always think, what can we do to make them (the government) stop? Just stop.

 


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