Ride-hail companies have quickly become a new windfall for LAX, which made nearly $22.8 million last year off fees from Uber and Lyft trips, compared with just $3.3 million from the taxi industry, according to data obtained by BuzzFeed News.
LAX, the second-busiest US airport, requires Uber and Lyft to pay a $4 fee – passed on to riders in their fares – for each pickup and drop-off. Taxis, meanwhile, add a $4 fee to airport pickups, $1.70 of which is passed along to the airport. The ride-hail companies did 2.2 million pickups last year, compared with 1.9 million taxi pickups.
The LA City Council approved a plan in December 2015 to allow ride-hail companies to pick up passengers at the airport. As part of that agreement, the airport wrote in a minimum fee requirement of $25,000 per month per company — a baseline they are far exceeding.
“I could see other airports looking at LAX ... and thinking, ‘Wow, we can charge these a surcharge and we’re going to raise some money this way,’” said David King, a transportation and planning policy researcher at Arizona State University. “Airports are trying to be sensitive to taxi operators, who have been good partners for them for a long time, and they don’t want to run the taxis out of business. But clearly the market is shifting toward Uber and Lyft.”
Bob Blumenfield, a city council member who supported the proposal to allow ride-hail companies to pick up passengers at LAX, said that “revenue-wise for the airport, it’s certainly been a windfall in some regards.”
Many airports charge Uber and Lyft fees to operate. At LAX, the money from fees is used to maintain its roads and traffic infrastructure, according to Frederick Badlissi, a spokesperson for the airport.
The weekly trip data also sheds additional light on the LA taxi industry’s steady decline. Between 2012 — the year Uber and Lyft began operating in LA — and 2015, taxi trips dropped 30%. During the week of Jan. 2, 2016, taxicabs made 51,449 pickups at LAX, compared with an aggregate of 15,527 for Uber and Lyft. The week of Nov. 26, their lowest point in 2016, taxicabs did just 25,386 pickups, compared to ride-hail’s 47,761.
Pick-ups at LAX in 2016
“When Uber and Lyft came to Los Angeles ... a lot of the drivers shifted the bulk of their business to the airport,” said Eric Spiegelman, president of the LA Taxicab Commission. When the airport began allowing Uber and Lyft to operate there, the commission attempted to convince taxi companies to reduce fares in order to better compete. But taxi drivers, worried that lowering fares would cut business even further, pushed back.
“We’ve been trying to help them adapt,” Spiegelman said.