PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting    September 8, 2015 
DATE:    August 24, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:    James R. Schone, Director, Aviation Business Development 
Jeff Hoevet, Senior Manager - Landside, Aviation Operations 
SUBJECT:  Airport Ground Transportation Services Briefing 
SYNOPSIS 
Ground transportation services, the method by which the traveling public gets to and
from the airport, are an important component of the airport system. During the past
several years, there has been tremendous change in commercial ground transportation
services at Seattle-Tacoma International Airport (Airport) as well as airports across the
country. As the contract for on-demand taxi service between Puget Sound Dispatch and
the Airport nears its expiration, this briefing is intended to provide information on best
practices for managing ground transportation services within the US airport industry as
well as views of the stakeholders in the Airport's ground transportation system as to what
changes should be made to improve the system. 
BACKGROUND 
During the past year, Port of Seattle (Port) staff have been preparing for the expiration of
the agreement (10/31/2015) with Puget Sound Dispatch, dba Yellow Cab, for on-demand
pick-up taxi service at Seattle-Tacoma International Airport (the Airport).  During this
period, there has been tremendous change within the ground transportation (GT) industry,
most significantly the introduction of Transportation Network Companies (TNCs), such
as UberX, Lyft, and Sidecar, as an alternative for the traveling public to existing modes
of transportation including taxis, limousines, public transportation, and drop-off and pickup
by family/friends.  TNCs utilize  privately owned and operated vehicles  for
commercial transportation services. As the vehicles are privately owned, airports around
the country have been challenged with the decision of whether to allow TNC activity on
airport property and, if so, how to assimilate TNCs into existing GT systems with
regulatory requirements including insurance coverage, vehicle standards, background
checks, and other requirements of commercial ground transportation services, that are fair
and consistent with existing GT providers.  At the Airport, TNC activity began in late
2013 and increased during 2014 and into 2015. As a result, and in conjunction with the
upcoming expiration of the taxi agreement, on May 26, 2015, Commission directed staff
to develop options for their consideration regarding how best to structure the GT system
at the Airport in light of the significant change within the GT industry. Commission's

Template revised May 30, 2013.

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direction  included evaluation of options against the following criteria or guiding
principles: 
1.  Provide quality GT service for the traveling public 
2.  Provide adequate capacity to meet demand 
3.  Allow provision of service to be manageable 
4.  Generate income for the Port of Seattle 
5.  Promote small business 
6.  Expand economic opportunity 
7.  Minimize environmental impact 
In response to the Commission's request, Port staff developed the following process to 
develop GT system options for the Commission's consideration: 
Step 1: Staff contracted with a GT consultant and industry expert, Leigh Fisher. 
The firm was tasked with developing a survey of peer airports and then an airport
GT system best practices report. 
Step 2: Staff initiated a GT provider stakeholder outreach process in conjunction
with a third party meeting facilitator/moderator, Norton-Arnold and Company. 
Step 3: Staff analyzed other considerations, including methods to charge access
fees, as well as legal and operational parameters associated with Airport facilities
within the GT system, and TNC inclusion options. 
Step 4: Staff and Leigh Fisher developed a range of options for GT system
operation at Sea-Tac based on steps one through three. 
GT System Description 
GT systems at airports across the world are complex due to the array of services that are
demanded by travelers and the various operational, legal, and regulatory parameters 
within each airport jurisdiction. Sea-Tac's GT system is no exception (see Attachment
A for a description of GT providers at Sea-Tac). A few key distinctions are described
below in order to create a better understanding of these systems. 
The first major distinction within GT systems is commercial vehicle operators vs. private
owners/drivers.  Commercial vehicle operators charge passengers for transportation
services including, but not limited to, taxis, flat-rate for-hire, limousines, TNCs, and
shared-ride operators (and for purposes of this briefing not including public
transportation such as King County Metro or Sound Transit). Private owners/drivers
typically are friends and family members transporting travelers to and from the Airport
with no fees. This distinction in operator type is important for the following reasons: 
1) Commercial operators are regulated by a variety of agencies, including local cities and
counties and the Washington State Utility and Transportation Commission, while private
vehicles are not subject to regulations;

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2) Commercial operators must obtain permission from the Airport, usually in the form of
an operating agreement, to engage in commercial activity on Airport property. The
agreements include access fees in the form of annual amounts, per-trip fees, or minimum
annual guarantees and/or percentage of revenues. Private owners/drivers are not required
to have operating agreements and are not charged access fees. 
3) The introduction of TNCs, which is a private owner/driver engaging in commercial
activity, has forced airports to evaluate commercial vehicle operating requirements in
light of the overlap between private and commercial activity by vehicle operators. 
The second major distinction for GT systems is drop-off vs. pick-up services for
commercial activity.  This distinction is important as airports treat drop-off and pick-up
services differently, from whether and how each type is charged a fee, to location of
operating areas for each type. At Sea-Tac currently, fees are generally only assessed on
commercial pick-up trips (note: courtesy vehicle trips, including shuttles for local hotels
and parking operators, are not separated into drop-off and pick-up trips as both occur
simultaneously - i.e., travelers are simultaneously dropped off and picked up). In
addition, the location of drop-off activity differs from pick-up activity, based on the type
of service (described below). This separation is important to be able to identify types of
trips for purposes of enforcement and payment confirmation. 
The third major distinction is on-demand vs. pre-arranged for pick-up operations. Ondemand
service is requested by the traveler upon deplaning, with no prior transportation
arrangements in place. Pre-arranged pick-up service has already been established by the
customer prior to arrival. This distinction is important as airports impose different
requirements and allocate separate operating areas for each type of service. At Sea-Tac,
on-demand pick-up operations occur on the third floor of the parking garage adjacent to
the terminal. Pre-arranged pick-up trips occur both on the third floor and on the Airport
arrivals  drive.  This  distinction is also important as airports must re-evaluate the
definition of "on-demand" and "pre-arranged" as it pertains to the addition of TNCs as a
ground transportation option. Utilizing a smartphone application to request a ride from a
TNC may be considered by some to be on-demand.  However, the general consensus
within the industry is that TNC activity is considered pre-arranged. 
History of GT at Sea-Tac 
Overall, there are eight classes of GT service at Sea-Tac (see Attachment A). In 2014,
there were more than 2.3 million pick-up trips (drop-off trips are not generally tracked)
across all classes of GT service, generating more than $8 million in non-aeronautical
revenue to the Port of Seattle with associated direct operating costs of approximately $2.5
million. The most relevant history within the Airport's GT system pertains to taxi and
limousine operations which currently (and historically) have been the primary services to
accommodate on-demand pick-up trips at the Airport. Most other modes, including

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shared ride, courtesy vehicle, charter, flat-rate for-hire and more recently TNCs (not
currently permitted), have primarily accommodated the pre-arranged pick-up demand, or
have been offered on a scheduled basis. Drop-off services are open to all types of
providers, including both commercial and private vehicles, are not charged an access fee
by the Airport, and occur on the departures level of the Airport drive. 
Taxi service accommodating on-demand pick-up trips has gone through several key
changes over the last several decades. Prior to 1989, the Port allowed all individual
owners/operators with valid operating permits from King County to provide taxi service
at the Airport in what could be defined as an "open" system; however, that "open" system
led to numerous challenges including poor customer service, inconsistent availability of
taxis, poor vehicle conditions and disagreements between drivers competing for
customers. In late 1989, the Port and a few key taxi owners collaborated on a plan to
bring the owners together and create an association to provide enhanced taxi service to
the traveling public. 
Taxis are internationally understood by travelers and have maintained consistently strong
performance at Sea-Tac throughout the years. Travelers expect taxis to be readily
available and, in the Pacific Northwest particularly, there is an expectation that vehicles
will be environmentally-friendly and operated by safe drivers committed to high levels of
customer service.  As a result of the collaboration in 1989, and the expectations for taxi
service, Airport staff implemented an exclusive arrangement for on-demand pick-up taxi
service which has allowed the Airport to require high environmental, vehicle and service 
standards to meet customer demand.  These standards include:  1) 100% "green" fleets;
2) five minute maximum wait times for customers ; 3 ) timely customer complaint
response; and  4) 24/7 availability, during both peak and non-peak periods, during
inclement weather and other major events. 
The first exclusive contract, established in August 1989, was held by Seattle-Tacoma
International Taxi Association (STITA). STITA continued to provide exclusive ondemand
pick-up service until 2010, when a competitive bid process was undertaken and
the contract was awarded to Puget Sound Dispatch, dba Yellow Cab.  This contract 
expires 10/31/2015.  Yellow's contract requires a minimum annual guarantee (MAG) to
the Port of Seattle of $3.67 million, or 13% of gross revenues, whichever is greater. 
Subsequent to the formation of an exclusive on-demand pick-up taxi service, a
complementary, yet competing, product for on-demand pick-up limousine service was
introduced in response to traveler demand for a more luxurious and up-scale option for
transportation. In the late 1990's, an exclusive arrangement for on-demand pick-up
limousine service was established to allow for high customer service levels, similar to the
arrangement with taxis.  Seattle-Tacoma International Limousine Association (STILA)
was the original provider of this service. The contract was put out for competitive bid in
2011 and STILA was selected as the winning bidder. The contract expires February 28,
2016, but has two, one-year extension options available.  STILA is required to pay a

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Ted Fick, Chief Executive Officer 
August 24, 2015 
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MAG to the Port of Seattle of $732,000 and $4 per trip for each trip in excess of 38,000
per year. The service has grown in popularity with travelers over the years with doubledigit
percentage increases in trip volume year-over-year the past three years (see
Attachment B for more details on GT operator trips, fees, and method of payment). 
Step 1: Peer Airport Best Practices 
Upon Commission's direction on May 26, Port staff contracted with Leigh Fisher, an
airport GT industry expert, to survey peer airports and develop a GT best practices report
(see Attachment C for full report and Attachment D for an executive summary of the
report).  The objectives of the survey and report were to describe how other airports
manage and operate ground transportation at their airport and to develop best practices
associated with airport GT operations. In conjunction with Port staff, Leigh Fisher
selected the following 15 airports as part of the peer outreach: 
San Francisco           Tampa                Fort Lauderdale 
Denver              Philadelphia           Minneapolis/St. Paul 
Boston               Detroit               Houston (Bush) 
Miami              Portland             Washington (Dulles) 
Phoenix              Baltimore             Vancouver, B.C. 
Leigh Fisher selected the 15 peer airports based on the following criteria: 
Similar volume of origin and destination (O&D) passengers 
Serve a passenger mix similar to that of Sea-Tac (business vs. leisure passengers) 
Employ a range of ground transportation business structures or operating models
including those considered to have best industry practices 
The report included a best practices analysis of the business structures used at other
airports focused on on-demand pick-up services. In addition, the report also described
the following: 1) available ground transportation services; 2) airport fees charged; 3) 
responsibilities of and resources available to airport staff; 4) the airport facilities used by
commercial services; and 5) the regulation of TNCs and peer-to-peer rental cars (new
types of personal/private vehicle rental and sharing). 
Leigh Fisher found that three types of models are available for managing on-demand
pick-up services at airports: 1) open access; 2) exclusive access; and 3) hybrid blend of
the two. Leigh Fisher also noted that the key differences between the models used were
a) an airport's ability to provide the desired customer experience; b) the amount of airport
staff effort required to manage and enforce day-to-day operations; and c) the degree of
competition among businesses desiring to provide on-demand ground transportation
service from an airport. For pre-arranged pick-up services, Leigh Fisher found that most
airports use an open access model and allow any properly permitted vehicle to access the
airport property.

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August 24, 2015 
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According to Leigh Fisher, the benefits of an open access model include greater
opportunity for access to on-demand pick-up passengers by properly permitted GT
providers; however, the drawbacks of an open access model include higher capital and
operating costs and less control of customer service for the airport and lower income for
the vehicle owner/operator. An exclusive access model limits access to on-demand pickup
to the contract holder.  This allows for lower capital and operating costs as well as
more control of customer service for the airport, and higher owner/operator income. 
Leigh Fisher concluded that an exclusive access system represents the best practice for
the management of on-demand pick-up transportation service at airports. Details on the
benefits and limitations of each type of model are included in the full report and
executive summary (Attachments C and D). 
Step 2: Stakeholder Outreach Process 
Concurrent to the peer airport survey and development of the GT best practices report by
Leigh Fisher, staff contracted with Norton-Arnold and Company to coordinate a GT
service provider stakeholder outreach process. Meetings were convened in late July with
participants from five classes of operators, including 1) taxis; 2) flat-rate for-hire; 3)
limousines; 4 ) shared -ride; and  5) TNCs.  Each session lasted two hours and was 
facilitated by Norton-Arnold. Participants were asked to respond to several questions
including how they currently operate at the Airport and what changes they would like to
see with the current GT system (see Attachment E for an actual meeting agenda and 
questions). 
Upon conclusion of the five stakeholder outreach meetings, Norton-Arnold produced a
summary of the findings of the individual meetings (see Attachment F). A summary of
the findings from Norton-Arnold are below: 
The most frequent issue raised during the sessions was the demand for a "level
playing field" among ground transportation operators. 
All of the operators attested to their successes and unique attributes associated
with their customer service.  Each class of operators believed they are offering
high-quality customer service. 
Transparency and honesty were important to the operators and they asked that the
Port inform them if any changes to the system would be made, as well as the 
rationale for those changes. 
Several operators noted the importance of ongoing meetings between operators,
staff, and managers. 
Operators asked that the Port be fair in its deliberations. 
Subsequent to the completion of the individual stakeholder meetings, Norton-Arnold
facilitated a follow-up meeting with all the operator stakeholders (one meeting with all
participants) to share the results of the best practices report and each individual

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stakeholder meeting with the broader group (see Attachment G for the meeting agenda). 
The objective of the meeting was to review the Leigh Fisher best practices report and
allow all the participants to provide feedback on the report, and in general. A variety of
comments and suggestions were received and are documented in the meeting summary
(Attachment H). 
Step 3: Other Policy Considerations 
One key policy consideration is how to balance the benefits and costs of allowing an
open access system. As mentioned before, the benefits of an open system include greater
opportunity for properly permitted providers; however, the drawbacks of an open system
include higher capital and operating costs, less control of customer service and lower
owner/operator income. 
Other key policy considerations include: 
Access Fee Determination 
One component of commercial GT operations at airports is the determination of fees
associated with access to airport property. At Sea-Tac, GT fees are an important source
of non-aeronautical revenue that is used to fund a variety of Airport infrastructure
projects. In 2014, more than $8 million was paid to the Airport by commercial GT
providers. 
Airports have established GT access fees based on guidance from the FAA, and state or
local authorities. Per FAA Airport Compliance Manual Order 5190.6B chapter 17.11,
self-sustainability for non-aeronautical rates, airport rates are to be based on fair market
value. The State of Washington, per RCW 14.08.120(6), requires that rates set by
airports must be fair and reasonable. Generally, airports in the U.S. have used two rate
setting methodologies for GT access fees. The first, which is the most prevalent, is called
cost-recovery. The airport determines the overall cost of the GT system, including
capital and operating costs, and then allocates those costs to each of the GT providers. 
The airport then collects the costs allocated to each provider in the form of a per-trip
access fee, an annual permit fee, or some other form of payment. The second
methodology is to allow the fees to be set by a competitive bid process. An exclusive
contract is established for the right for on-demand pick-up for a class of service, e.g. taxi
service, and the contract is put out to bid in the market. The rate is then determined
through the competitive bid process. 
At Sea-Tac, both models of access fee determination are utilized. All pre-arranged pickup
classes of service, including taxis, limousines, flat-rate for-hire, shared ride, courtesy
shuttles, and charters are assessed fees based on cost recovery. The rates for on-demand
pick-up services, including taxis and limousines, are determined through a competitive
bid process associated with exclusive contracts.

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Operational and Legal Parameters 
An important consideration for GT services is ensuring safe and equitable operations.
Equity requires that similar operators be in the same place and safety requires careful
design of operational areas for GT service providers. 
In addition, the GT system at the Airport utilizes the main roadway system accessing the
terminal, the parking facility adjacent to the terminal building, and vehicle holding lots 
on various parcels of land around the Airport campus.  The system is constrained by
vehicle travel flows and the availability of operating areas sufficient to accommodate
passenger drop-off and pick-up.  The Airport's physical infrastructure is an important
component in decision-making regarding the structure and layout of GT operations. 
Moreover, the financing used in the past to fund the construction of the physical assets
used for GT purposes contains restrictions which also must be considered when
determining how GT activities and operations are accommodated.  Most notably, the
parking garage adjacent to the terminal was funded with six tax-exempt municipal bond
issues. Per IRS rules, tax-exempt bonds have restrictions pertaining to private use (vs.
public use) for the assets constructed and funded by the tax-exempt bond.  The IRS
imposes limits to private use which must be managed for the life of the bonds. The Port's
earlier use of the garage for rental cars (a private use) means that the SeaTac garage is
more restricted for additional private uses than other airport garages. 
With the assistance of outside legal counsel, K&L Gates, Port staff has reviewed the GT
uses within the Airport parking garage to determine what, if any, activities were (and are) 
private use. According to K&L Gates, the two major determinants of private use include
1) the term of any contract with a GT provider, which must be less than 50 days to not be
considered private use; and 2) the nature of the contract, whether it be a qualified
management agreement or a profit share model. A qualified management agreement, or
an agreement in which the Port pays a flat, fixed fee for management of a service, does
not constitute private use. Alternatively, an agreement in which the operator or provider
shares in the profitability of a service or activity does constitute private use. Based on the
IRS rules, the current exclusive contracts for on-demand pick-up taxi and limousine
services constitute private use; however, even if these exclusive contracts remain in
place, the Port will not exceed the private use limitations. Changes to the GT system that
would increase private use activity must be carefully considered against the IRS limits. 
TNC Inclusion Options 
As described above, TNCs are currently not permitted to provide pick-up service on
Airport property; however, similar to all other modes of transportation, both commercial
and private, TNCs are allowed to drop off passengers at the Airport. A key policy issue 
is whether or not to allow TNCs the ability to pick up passengers and if so, the

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appropriate contracting mechanism for allowing this to occur.  Major areas of
consideration with the inclusion of TNCs into the Airport's GT system include access
fees, operating areas, vehicle staging areas, activity tracking and reporting, vehicle
operator proof of insurance, vehicle standards, and background checks as determined by
applicable regulatory agencies, such as King County and/or Washington State
Department of Licensing. 
Customer/Traveler Feedback 
Since 2011, Sea-Tac has participated in the quarterly ACI Airport Service Quality (ASQ)
Survey.   The ASQ Survey is used  in airports across the world and is the only
international survey measuring passengers' satisfaction while at the airport.  Within the
survey, participants are asked to rate GT to/from the airport on a 5-point scale from poor
to excellent, or to indicate they did not use GT. In the past calendar year, Q3 2014
through Q2 2015, more than 80% of survey respondents have rated GT to/from Sea-Tac
as "Excellent" or "Very Good", the two top ratings.  Ratings at Sea-Tac tend to be
slightly higher than at peer airports. Sea-Tac ratings were higher than the average ratings
at 24 peer airports in 15 of the last 18 quarterly surveys. 
Step 4: GT System Options 
After the conclusion of steps 1-3, Port staff re-engaged Leigh Fisher to craft potential
options for the Airport's GT system for Commission's consideration that 1) were based
on the guiding principles from Commission; 2) incorporated the peer airport survey
results and best practices findings from Leigh Fisher; 3) incorporated and reflected the
provider stakeholder outreach feedback and comments; and 4) were consistent with the
other considerations including access fee options, operational and private use constraints
associated with the financing of the Airport parking garage, and TNC inclusion
considerations.  Three options were identified  in addition to the current operating
structure at Sea-Tac: 
Current GT Structure 
Currently, on-demand pick-ups are accommodated through an exclusive taxi contract
with Yellow Cab, and an exclusive limousine contract with STILA. There is a small
amount of on-demand business associated with shared ride activity as well. 
All pre-arranged pick-ups are open access for taxis, limousines, for-hires, and the
majority of shared ride services. TNC access for pick-ups is not currently allowed as
there is no approved operating agreement in place. 
All GT management activities are performed by Port of Seattle staff. 
Option 1

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The goal of Option 1 is to create parity of access to GT providers for the traveling public
and would include the following steps/changes: 
Allow any taxi, for-hire, or limo provider with a valid permit from local
regulatory agency access to on-demand pick-up customers 
All on-demand classes would have dedicated curb space on third floor
plaza in garage 
All pre-arranged classes of service will be provided operating area on third
floor of garage 
One year pilot program for TNC operation as a pre-arranged option on the third
floor of the garage 
Some key considerations of Option 1 include: 
Creates operational equity among GT providers 
Allows increased number of participants but likely reduces income levels for
operators 
Reduces ability to manage customer service, environmental standards and vehicle
condition 
Increases resources required to manage: either POS or third party 
Could lead to over-supply but this can be managed through caps or rotations 
Could increases difficulty to ensure adequate capacity 24/7 and during bad
weather 
Can set rates higher than cost-recovery but must be reasonable and uniform 
Requires significant capital investment to expand curb space and off-site staging
areas, must also expand operational area on third floor 
Single lane entry/exit on third floor commercial area could lead to congestion 
Potential for higher risk to customer safety and service levels due to congestion 
Option 2 
Option 2 is the same as Option 1, except that pre-arranged classes of service would
continue to operate on the drives or on the third floor, as they do currently. Some of the
changes for Option 2 include: 
Allow any taxi, for-hire, or limo provider with a valid permit issued by the local
regulatory agency access to on-demand customers 
All on-demand classes of service have dedicated curb space on third floor
of garage 
Create a one year pilot program for TNC operation as a pre-arranged option on
the third floor of the garage 
The key considerations of Option 2 are very similar to Option 1 with the following
changes:

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August 24, 2015 
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Requires less capital investment to add curb space and off-site staging areas 
Less congestion and risk to customer safety 
Option 3 
Option 3 would: 
Create a single exclusive contract that allows either taxi and/or for-hire operators
to compete for and provide on-demand service 
Maintain an exclusive contract for on-demand limos 
Maintain an open structure for pre-arranged classes of service 
Main pre-arranged classes of service ability to operate on the drives or on the
third floor 
Create a one year pilot program for TNC operation as a pre-arranged option on
the third floor of the garage 

The key considerations for Option 3 include: 
Creates best customer service due to vested interest in contract and single point of
contact 
Allows all taxi and for-hire operators ability to compete for access to on-demand
customers 
Provides adequate capacity 24/7 and during bad weather due to contract
requirements 
Provides best justification for rates above cost-recovery as rate set by competition
through RFP 
Allows better enforcement of customer service, vehicle and environmental
standards 
Least impact to staff resources required for management and enforcement 
Of all proposed options, requires least amount of investment for additional
queueing/staging space 
Current GT Services at Cruise Terminals 
The system of ground transportation at cruise operations is significantly different from
that of the airport. Please refer to the attached presentation for more details. 
ANTICIPATED FUTURE ACTIVITIES 
Staff plans to return to Commission later in September with a recommendation for their
consideration. 
ATTACHMENTS TO THIS BRIEFING

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August 24, 2015 
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Attachment A: GT description 
Attachment B: GT operator details 
Attachment C: Leigh Fisher full report 
Attachment D: Leigh Fisher executive summary 
Attachment E: Individual outreach meeting agenda 
Attachment F: Individual meetings summary 
Attachment G: All stakeholder meeting agenda 
Attachment H: All stakeholder meeting summary 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 30, 2009  Briefing on status of RFP for On-Demand Taxi Service at
the Airport. 
December 15, 2009  Authorization to award Puget Sound Dispatch, Inc., dba
Yellow Cab Taxicab Association, the contract for On-Demand Taxi Services at
the Airport. 
May 26, 2015  Briefing on Airport Taxi Service and Transportation Network
Companies.