7b
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 7b STAFF BRIEFING Date of Meeting December 8, 2015 DATE: November 30, 2015 TO: Ted Fick, Chief Executive Officer FROM: Michael Ehl, Director Aviation Operations SUBJECT: Ground Transportation Introduction of Transportation Network Companies (TNCs) SYNOPSIS On May 26, 2015, the Port of Seattle Commission directed Aviation Division staff to conduct a comprehensive analysis of ground transportation operations at Seattle-Tacoma International Airport. This request was driven by the rapidly evolving market conditions, changes in consumer behavior, and the diversification of ground transportation modes occurring at airports across the nation. The established and growing public demand for the introduction of Transportation Network Companies (TNC) into the Airport's pre-arranged ground transportation system was reviewed during the six-month study period. As such, Port staff has initiated discussion and are currently engaged in negotiations with several TNC entities. Implementation of TNC operations will be determined by the speed of negotiations as based on the ability of the operators to satisfy the guidelines recommended herein and established by the Commission. TNC operating agreements will include stringent terms that require specific methods for the reporting of operational activity with frequent auditing. In addition, Port staff has released a Request for Information (RFI) to understand the capabilities of software that integrates tracking, enforcement, and appropriate revenue reporting compatible with the Port technology platform to enable the highest levels of transparency, accountability, contract compliance, and enforcement. The results of the impending RFI will help staff determine if and how to implement a real-time activity and revenue reporting technology for TNCs, and other ground transportation (GT) operators. Staff intends to commence a TNC agreement and if and when a technology-based tracking solution becomes available, it will be incorporated into the operation at that time. Introducing the TNC option into the ground transportation system will require several modifications to the third floor of the public parking garage and ancillary facilities which will be put in place immediately to accommodate the TNCs. Additional facility challenges must be resolved to accommodate other changes being driven by Sea-Tac's extraordinary growth and the physical relocations of existing operations made necessary Template revised May 30, 2013. COMMISSION AGENDA Ted Fick, Chief Executive Officer November 30, 2015 Page 2 of 4 by planned and future capital improvement projects. A comprehensive facility analysis of the third floor of the public parking garage, lower drive, and related vehicle staging areas will be complete by the first quarter of 2016 to inform final design requirements anticipated for future GT activities. BACKGROUND In an already dynamic market for ground transportation services, in which growth in nearly all GT services is occurring, three TNCs (Uber, Lyft and Wingz) have requested access to Airport property for the pick-up of passengers. Transportation Network Companies, which are currently authorized by King County and the City of Seattle under Chapter 46.72 of the Revised Code of Washington, provide transportation of passengers for compensation by connecting drivers of personal vehicles to passengers requesting transportation exclusively through use of mobile device application technology. Airport staff has been in regular communication with potential TNC operators throughout 2015 and are now actively engaged in negotiations. On May 26, 2015 and subsequently on September 8, 2015, the Port Commission provided guidance by which staff was to establish the framework for implementing an operating agreement with TNCs at Sea-Tac Airport. This guidance was based on a philosophy of establishing a level playing field whereby similar requirements are consistently applied to ground transportation operators at Sea-Tac Airport. Over the last six months, Port staff has facilitated several work elements intended to inform the revised structure of a strengthened and enhanced ground transportation system at the Airport. That work included a comprehensive ground transportation outreach effort of more than 30 stakeholders- conducted by Norton Arnold, an independent thirdparty facilitator. Additionally, a formal study was conducted by Leigh Fisher, an established aviation consulting firm, to provide information on best management practices at 15 peer airports. Based on this outreach and industry research, Port staff has developed key terms for an operating agreement consistent with the guidance and philosophy of a level playing field amongst ground transportation operators. Included below are the main operating agreement terms which are currently being negotiated with the TNCs: COMMISSION AGENDA Ted Fick, Chief Executive Officer November 30, 2015 Page 3 of 4 Proposed TNC terms Terms for other GT agreements Industry Comparison Similar, except for exclusive 1-year with 30 day cancellation Term agreements with Yellow and Generally one-year or less. clause. STILA. Per-trip fee, amount TBD but Per-trip fees, generally $5 or based on comparable fees for Per-trip, permit, concession less. Most are pick-up only, but On-Going Fee taxis. Charged on pick-up only fees. Varied. some charge for drop-offs as (not drop-off). well. One time fee capturing past Similar concept in San unpaid trips. TNCs will self- Francisco. San Diego charged a Activation Fee report these trips and fees N/A one-time fee for additional owed, or, if unknown, a flat fee staff costs to be incurred. will be applied. Varies between airport drives Operating Area 3rd floor of garage. Similar. and nearby operating area. Staging Area South 160th Street. Similar. Similar staging areas. Geo-fence required for 1) Geo-fence is implemented at vehicle tracking, 2) trip most airports. Month-end trip reporting, and 3) "blackout" so AVI is utilized for tracking and reporting with audit Technology drivers cannot accept rides trip reporting. capabilities. Real-time trip within the area as a way to tracking is only being done in eliminate cruising or loitering San Francisco. for ride requests. Trade Dress Required. Similar. Similar. Must fulfill ride if requested, or, provide information and Similar for most other Wheelchair Accessibility Similar. contact for an alternative agreements. provider. Very limited. San Diego is only Deadheading reduction effort On-demand taxi fleet is 100% other airport that has Green Initiatives through matching of drop-off "green". Deadheading implemented a two-tier rate and pick-up trips. reduction goals. system- lower per-trip fee for "green" vehicles. $1 million while on Port Per Senate Bill 5550, TNC Insurance property per recently enacted insurance requirements are Similar. Senate Bill 5550. higher than other GT operators. Proposed Schedule December 8, 2015 Commission briefing December 15, 2015 GT technology RFI results available January 1, 2016 TNC operating agreement commencement March 1, 2016 Ground transportation traffic study complete ATTACHMENTS TO THIS BRIEFING Map of third floor garage Ground Transportation operating area. COMMISSION AGENDA Ted Fick, Chief Executive Officer November 30, 2015 Page 4 of 4 PREVIOUS COMMISSION ACTIONS OR BRIEFINGS September 8, 2015 Briefing on Options for Structure of Airport Ground Transportation System May 26, 2015 - Airport Taxi Service and Transportation Network Companies Briefing
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