Higher fees could be on the way for Uber and Lyft passengers at Houston’s two airports, under an agreement the companies have reached to bring the payments more in line with other Texas cities and boost revenues for the city’s airport system.
City council is slated to consider the deal at its meeting Wednesday. The agreement was struck between the two companies and the Houston Airport System, which operates the George Bush Intercontinental (IAH) and William P. Hobby (HOU) airports.
The fee will rise to $3 at Bush and remain $1.25 at Hobby for each pick-up or drop-off at the airport, though the Hobby fee later will increase to $2.75 once agreed-upon improvements at that airport are completed. Currently, the city charges only for departures, with a rate of $2.75 at Bush. The companies pass the fees onto customers
Both airport officials and Lyft said the higher amounts adhere to fees levied by other Texas cities and airports, including Dallas-Fort Worth, which charges $3 for each pick-up or drop-off at the airport.
“We’re basically matching the market here,” Mario Diaz, director of the Houston Airport System, told council members during a presentation last week.
The fees are expected to bring in $11.8 million for the airport system in Fiscal Year 2021, and $47.3 million in the remaining four years. The current fee brings in a little more than $4 million a year. Those projections do not account for the COVID-19 pandemic, which sent ride-shares at the airports nose-diving from 187,989 transactions in March to just 18,377 in June.
As part of the deal, drivers will enjoy more flexibility in how they pick up passengers at the airports. Under existing rules, drivers must wait in a staging area until they have received a pick-up request.
The deal would let drivers who are dropping off a customer pick up another without heading back to the staging area, and it would allow drivers to leave the staging area in anticipation of a request, both of which Diaz said would help limit wait times for drivers and customers alike.
The city also agreed to upgrade the staging area at Hobby. Ian Wadsworth, the chief commercial officer for the airport system, said that includes repaving and improvements to entrances and exits.
Taxi cabs pay $2.75 per IAH transaction and $1.25 at Hobby.
“This agreement, in a matter of speaking, puts the (ride-shares) at a competitive disadvantage with respect to pricing over the taxi cabs,” Diaz said. “So, that’s a good thing for taxi cabbers.”
The city has established prescribed fares for taxi trips to the airports, but cannot implement such a requirement on ride-shares because the state assumed regulatory authority of that industry, Wadsworth said.
Alejandro Henao, a data researcher with the National Renewable Energy Laboratory who has studied airport mobility, said the deal appears to be a generic agreement to generate more revenue. Many airport systems have imposed or increased fees to offset the loss in revenue from parking and other forms of transportation as ride-shares rose in popularity.
“I think they’re just trying to catch up and use it to try to keep up with the revenue they’re not getting from parking,” Henao said.
In some other cities, Henao said airports have sought to use agreements to encourage greener practices, such as giving incentives for hybrid or electric cars or “pool” rides, where multiple people share a vehicle. Wadsworth said the deal did not explicitly address that aspect.
It does, however, include an agreement from the ride-hailing companies to share real-time data on cars’ locations with the city, which could help inform future mobility priorities. The companies also agreed to help enforce the policies against drivers. Through their respective apps, the companies can offer warnings to or remove drivers who are caught breaking the rules.
Campbell Matthews, a Lyft spokesman, said the deal marked a good compromise.
"We're glad to have reached a long-term agreement with the Houston Airport System that will benefit both those who drive with Lyft and travelers at IAH and HOU,” Matthews said. “We thank the airport officials for their partnership through this process, and are eager to see city council approve this valuable agreement.”
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